Assortment planning in retail – Introduction
In recent years, customer needs and retailer expectations have grown faster than ever. Therefore, you need a sound assortment planning or retail planning strategy to provide the best customer experience and achieve your sales goals.
When a store optimizes advertising strategies, store layout, and promotional strategies for the maximum conversions, it is said to be doing assortment planning. Planning for product availability is done on a periodic basis, whether it be daily, weekly, monthly, quarterly, or in a different approach.
Article Content-
- What is Assortment Planning in Retail
- The assortment planning process in retail
- Best practices for retail assortment planning
- Benefits of assortment planning in retail
- Conclusion
What is Assortment Planning in Retail
The act of identifying the commodities retail desires to sell during a fixed timeframe to increase profitability is known as assortment planning in the retail sector. In other circumstances, it means that retailers choose the items they should buy expensive and promote them to their customers. It all comes down to having the appropriate products at the correct time and location.
A retailer’s capacity to provide a wide selection of goods has a significant impact on customer satisfaction. If the products they want are out of stock or if the color they wish is not provided, your consumers can be disappointed. They will consequently visit your opponent’s store instead.
It is crucial to understand that displaying all of your products at your store would be impractical due to the increase in operational costs. So, to eliminate costs while maximizing profit, you should optimize the selection and give designing your retail strategy first attention.
The assortment planning process in retail
Are you confused about the assortment planning process? How and where to start? Let’s explore this completely,
Make a strategy based on a study
- You must first evaluate the previous sales performance of each subsidiary and retailer before developing an assortment strategy or plan, and then you must determine the most recent trends.
- You will research the necessary components, like value, typical selling price, and batch longevity, to mention only some. Marketers can create a strategy based on facts and relevant materials.
Grouping of stores
- The technique of combining stores with comparable characteristics, such as locality, earnings, retail space, buying behavior, marketing materials, and so on, is known as “Store grouping”.
- You may then apply a comparable assortment strategy to stores that are part of the same group. Additionally, by performing this step, you may personalize your product selections and marketing strategies to better serve your consumers.
Determine the range and volume of assortments
- Stores must choose whether products will be supplied in each group. The Product range is the variety of categories, whereas product richness is the diversity of designs and products inside a given theme. For maximum customer appeal, it’s crucial to achieve a balance between breadth and depth
Design a realistic marketing strategy
- In this strategy, things are displayed using the most pleasing manner possible. This makes you consider the items that are positioned in the middle of the store and the choices that are closely located to the service counter.
- Remember that the goal of visual merchandising is to encourage customers to buy by emphasizing the advantages of each product. Once more, you should personalize your plan for various retailers and refine it in light of historical data.
Verify again and implement the strategy
- Once you have accomplished the aforementioned steps, you must ensure that everything is in good condition. Verify that the numbers, designs, and colors are being distributed to the appropriate stores and that the plan is in line with the cost limits.
Best practices for retail assortment planning
Prioritize client desire
The following describes the standard purchasing procedure.
- Planning executes the fully accessible, retailers purchase inventory following their budgets, and allocates distribution of goods in response to market demand. We consider this hazardous.
- After committing to a purchase, it is difficult to alter your mind. The allocation department must decide what to do with merchandise that a merchant purchases in excess or inadequate quantities. Dynamic allocation makes the best of the funds offered to them, yet ultimately they are powerless.
Bring the team’s combined experience into using
- The natural inclination of many shops is to entrust planners with the specifics. The product planning team creates a remarkably precise; fully accessible that specifies buying items and cash for each specific genre. Then, retailers purchased merchandise to comply with the blueprint that was given to them.
- This status compared aids top management in maintaining tight guidelines on how budgets are used.
Assist in establishing decision–making authority
It’s extremely inefficient if your procedure calls for everyone to stop what they’re doing once a week to submit their updated buy plan for a management roll-up. Managers must wait for information to arrive and attempt to make sense of the data they are provided, in addition to forcing purchasers to stop what they are doing to concentrate on data entry.
Benefits of assortment planning in retail
Keep your clients engaged
Rather than speculating, you are evaluating the past demand activity of each store and creating a plan in accordance. As they may have purchased comparable things last year and presume that you are still carrying them this year, your devoted consumers will be able to find what they’re looking for in your business in this manner.
Budget your stock items
Once you thoroughly prepare your marketing plan, you will have an accurate estimation of the assortment required. Thus, retailers will end up spending the inventory under budget and won’t go overboard. As an outcome, we will cut back on wasteful spending and inventory costs. Due to careful planning, you can avoid reallocating items and getting rid of unnecessary inventory.
Distance yourself from your opponents
When you have a sound assortment plan, you can identify the most popular items and stock your shelves with them. You can outperform your rivals and maximize the number of visitors if you can introduce the current trend first.
Assortment planning steps
- Create a plan based on your findings.
- Gathering of stores.
- Choose the length and breadth of the assortment.
- Make a plan for your marketing communications.
- Verify again and carry out the plan.
- Keep your devoted clients.
- Manage your supply costs.
- Stand out from your opponents.
Conclusion
The previous method of planning transactions simply isn’t sufficient anymore because of how drastically retail has evolved in current history. Budgets and profitability have become too constrained to allow for any degree of supposition during the purchasing process. You need assortment planning if you frequently buy too much or not bought less, or if you just lack the visibility you require.
