Most people argue whether or not they should start a business, but rarely who know some important principles of business that apply to any niche.
That’s why we decided to share few articles that teach some of these principles, like rules of selling, retail buying, managing a team and finding clients.
In this article we will talk about Assortment Planning and its important uses.
Buying is arguably the most important piece of the puzzle in retail, and this is for good reason.
Everything about retail revolves around it, from purchasing great merchandise to reselling for profit.
Still, many companies fail to realize how assortment planning can help increase profitability and stay ahead of the competition.
What is Assortment Planning?
Assortment planning simply means using data to guide the creative process and make smart, customer centric decisions.
It is the process of determining customer demand, identifying emerging trends before the competition and buying the right products in the right quantity to match customer demand.
It involves forecasting consumer demand and determining how you, as the retailer, can manage the demand.
When retailers do assortment planning, they plan where each product should be placed, in the right sizes, and when they should be placed.
The act of ‘highlighting’ certain products and sizes at a particular period of time is designed to address consumer demand and drive more sales.
Why is Assortment Planning Important?
Online shopping trends today mean that when a shopper visits a brick and mortar store, they expect to easily find the product they want, and in their preferred size.
The good news is that in store shoppers spend more than online shoppers, as there are more opportunities for impulse buying, unintentional product discovery and hand on assistance while shopping.
This increased average transaction value is a result of assortment planning.
Having an assortment plan allows you gain control of inventory.
It ensures all your channels are aligned so customers can find whatever they want, no matter how they shop.
4 Tips for Successful Assortment Planning:
1. Ensure Clarity.
Who are you as a brand? Who are your customers? Do they recognize your values and its purpose? Finding answers to these questions will help you determine the right product depth for your store.
2. Set Goals.
Like every business endeavor, you must be clear about what you expect of the exercise. Setting goals will set a path for you and your team, ensure accountability, and measure progress.
3. Update Your Inventory Data.
Is a particular brand selling out? Are shoppers going for particular sizes and colors of a particular product? Observing these patterns can help you improve your stock and update your inventory data with products that customers desire.
4. Pay Attention to Shopping Habits.
Notice how shoppers behave online and in store. What questions are they asking? Which products are they searching the most? These insights can help you determine the right product mix for your store.
We hope that this small guide will help you and give you the necessary knowledge to reduce your anxieties about starting a business in retail.