The biggest challenge for retailers is to identify the products their customers will buy. The other problem is estimating the stock level. These two high stock levels can lead to excess inventory, which could cause capital to be bloated and force you into a position where the profit margin is at risk. But, not getting enough means you are missing sales opportunities.
A report by analysis found that the combined loss of out-of-stocks and overstocks was $1.1 trillion in 2015. This was a staggering amount of money, and it is estimated that this figure represents approximately. 7.5% of the total retail economy.
A term assortment planning can help retailers turn these losses to profit. Assortment planning involves choosing the right products and placing the correct quantities in inventory.
Let’s now get to the details of assortment planning.
Here’s everything you need to know about assortment planning. Assortment planning is a way to find the best product collections to sell in a specific area or time period. It will consider the seasonality as well as the functional objectivity of the products. Both you and your customers can benefit more from the outcome.
To meet customers’ preferences and needs, assortment planning includes individual product attributes.
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These attributes are:
The assortment plan will also determine products that make up segments, categories and sub-segments.
Retailers have made assortment planning a core strategy. This is because retail has become a more consumer-driven business over the years. Retailers need to be able to identify the right product mix and choose the right size inventory. Maybe assortment planning plays a larger role.
Retailers should be concerned about optimizing product selection and shelf space within their space. For shoppers’ satisfaction and the generation of demand, product selection is crucial. Offering different products and increasing customer satisfaction are two of the best ways to improve financial performance.
Planning your assortments can be a great way to optimize your assortments.
As retail channels become blurrier, assortment planning is more important than ever. It can determine if a retailer is still relevant in today’s competitive marketplace. Assortment planning is becoming more popular among retailers. This allows them to be responsive to local needs. Retailers can also offer the right products at the right time to the right customers.
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Their nature is firmly rooted in a product-centric approach. Retailers are finding it difficult to plan assortments.
The solution lies in the following primary factors:
Every factor, when combined with tangible information, can give clues to the mystery. Retailers don’t have a crystal ball to predict what products customers will prefer.
Moreover, assortment planning can involve multiple data sources from various channels. Merchandisers face constant challenges in making strategic decisions about assortments. Retailers’ teams must be able to adapt to the latest industry trends without taking any risks.
We have some tips to help you with assortment planning. This will help you get the most from assortment planning.
This is one of the best assortments plans you can use. When optimizing assortments, it is important to strike the right balance between trendy and staple products. This factor has the advantage that trend-forward products will not stay on the shelves as long.
Real-time data analysis can be a saving grace for retailers and brands. It also helps in assortment planning. This will highlight the active approach to optimizing assortments in real-time. It will also give you quick insight into the effect of increasing or decreasing certain products in the mix.
Furthermore, it is possible to manage assortments in real time. This can help you manage visibility on the market and handle discounts when they are available.
Retailers and brands may also be able to use advanced retail solutions in order to analyze SKUs in real time. It can be very helpful to spot emerging trends and respond to them with analytic solutions for assortment planning. This can be done even before your competition.
Retail is being made easier by gaining customer insight. The game plan for merchandising has changed dramatically. According to data, trend-forward retailers are one step ahead of others. Their mindsets are clear. They are also focusing on the integration and planning for assortment.
For others, it is possible to level the playing field. This can lead to a downgrading of both the brand’s identity and its position. This risk is worthwhile, however. This is because there is a huge opportunity for trend-led retailers who are just entering this market. There will not be FOMO with careful analysis and highly-desirable updates in real time.
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Assortment planning can be used to determine the types and quantity of products that retailers will need in their inventory over a given time period. If you are having difficulty managing your product inventory and buying the right products, assortment planning may be a solution. It is important to understand how to use assortment planning to its full potential.
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