Merchandise assortment
planning
What is assortment planning ?
Assortment planning in retail is the process of selecting the
products that a retailer wants to sell during a particular period
to maximize profitability.
Factors affecting retail assortment planning
1. Season /Month :- This is the most crucial factor which affects assortment
planning. Every month, every season, customers need different things.
For ex. During summers the sales of deodorants talcum powder will be high, but
during winters the sales of lotion cough drops will go up while the sales of things
that were being used in summer will go down significantly.
2. Suppliers :- The retailer obviously is the last man in the retail chain. It is the
middleman for the stock list who supplies the goods to the retailer. It is the supplier
who supplied the product to the retailers, and the retailer should always know their
suppliers.
3. Shelf space :- Another important factor in case of assortment planning is the available shelf
space with the retailer. There may be multiple suppliers with a various assortment of various
products and also it may be right month to buy the product for sale, but if the retailer does not
have enough shelf space, he would always have to keep on asking for multiple deliveries.
4. Market Trends :- Another most crucial factor of retail short while planning is to keep into
consideration the market trends. The trends in the market affected by multiple factors like
current celebrities, market potential, paying capacity of the people, and liking of the people.
For ex. Take a look around you today, there are smartphones, tablets, and even watches that
allow you to make phone calls. This change in the communication market is an excellent example
of a market trend.
ACTIONS TO CONSIDER FOR ASSORTMENT
PLANNING
1. Identify Consumer Decision Trees and customer segments :- Before you select
your product assortment , you must identify the different consumer decision
trees present within a category.
A CDT is a graphical record of the thought process which any shopper goes
through process which any shopper goes through when selecting a product in a
category.
This graphical record outlines the different product attributes that make up the
purchasing decision.
ACTIONS TO CONSIDER FOR ASSORTMENT
PLANNING
2. Develop a store clustering strategy :- store clustering or store grouping is the
grouping of the stores based on similar store and demographic characteristics.
It is a critical step for assortment planning process as it helps you to create
localized assortment plans that meet the needs of local shoppers.
There are essentially two ways you can cluster your stores :-
{a} PERFORMANCE- BASED STORE CLUSTERS – these are grouped
according to how they perform. For example, store locations with similar sales
performance would be placed in the same store group.
{b} NON- PERFORMANCE BASED CLUSTERS- these are grouped according to
store characteristics such as demographics, store, size or store type.
ACTIONS TO CONSIDER FOR ASSORTMENT
PLANNING
3. Align internally around category roles :- Before creating assortment plans, it is
important to align internally around the role each category plays in the
merchandising strategy, as well as the implications those roles will have on category
space allocations and assortment decisions.
The four major consumer- based category roles are :
o Destination
o Routine
o Seasonal
o Convenience
ACTIONS TO CONSIDER FOR ASSORTMENT
PLANNING
4. Locate cross merchandising opportunities to increase sales – Cross merchandising is a
tactic that category managers use to drive additional in-store sales.
For example : instead of just buying a bag of crisps, a customer would add salsa sauce to
their basket or when purchasing paint, your customer would purchase paint brushes too.
5. Define an assortment planning strategy :- Assortment planning is a critical step of
category management. However, it is not dependent from other category management
decisions. Once the strategy has been agreed upon internally it will give direction as to
what merchandising tactics you should put in place to achieve your goals.
For example : you might choose to target a specific customer segment such as a price
sensitive segment or a convenience- driven segment.
THANK YOU
