What is the merchandise planning process?
Merchandise planning is a method of selecting, managing, purchasing, displaying, and pricing the products in a manner that brings in maximum returns on investment, value addition to the brand name by satisfying the consumer needs while avoiding the creation of excess inventory.
What are the 5 steps in preparing an assortment plan?
In our last article on assortment management, you might read about 5 core stages of this process:assortment strategy development;assortment planning;current assortment update;assortment policy analysis;inconsistencies elimination.
What is the goal of assortment planning?
What is the goal of assortment planning? Is to maintain a balanced assortment of merchandise that will meet the needs of as many customers as possible.
What is the meaning of planning concept and write the merchandise assortment planning concept?
Assortment planning is about making the right product picks and ordering the right quantities to match market demand. These decisions affect both retailers and manufacturers supplying them. In the apparel and fashion sector, these challenges are also more complicated, because of limited time windows.
What are the 4 characteristics of product assortment?
Characteristics of Product Assortment. There are important characteristics that a company's product assortment should consist of. The key characteristics are Breadth, Length, Depth, and Consistency.
What are the key characteristics of an assortment plan?
Assortment planning entails evaluating individual product attributes, including Brand, Size, Style, Colour, Function, Price and Stock Keeping Unit (SKU) performance during selection to address the preferences and needs of your customers.
Why is product assortment important?
They are important because they determine the goods that a customer interacts with, which leads to a purchase decision. Assortment can vary according to seasons – an ice cream store may offer different flavors in the summer and different flavors in a monsoon season.
What is an example of assortment?
An example of assortment is the filing of papers into categorized folders. A collection of varying but related items. This box has an assortment of chocolates, there's a picture on the cover so you know which is which. Assortment is defined as a group of things that vary in type.
Why do we need product assortments?
Product assortment, also known as product or merchandise mix, is the variety of merchandise that a business offers to customers. In the eyes of a customer, this assortment defines a retailer's image and why they shop there. Product assortment will also determine a company's dependence on particular inventory.
What is the importance of merchandise planning?
The purpose of merchandise planning is to fulfill consumers demand by making available right merchandise at the right place, time at right prices, and in the right quantities.
What are the benefits of merchandise planning?
Key benefits of implementing Merchandise Planning Software include:Reduced Stock holding. ... Reduction in manual effort. ... Quicker reaction to trends & faster decision making. ... Strategic & Detailed view. ... Data integrity. ... Focus of the open to buy in the right areas.
Why is assortment planning important in retail?
Why is assortment planning important? Assortment planning is important because when businesses increase stock, they only have so much space available for stocking. Planning allows the business to choose the most beneficial product options for their business and avoids wasting time.
How you prepare your assortment plan?
Have a look at the following steps.Research and build a plan. ... Store clustering. ... Decide the breadth and depth of assortments. ... Create a visual merchandising plan. ... Double-check and execute the plan. ... Retain your loyal customers. ... Control inventory spending. ... Stand out from competitors.More items...•
What is the first step in developing an assortment plan?
What is the first step in developing an assortment plan? Determine the amount of planned open-to-buy. Identify the selection factors that are most important to the customer.
How do you build an assortment?
Optimizing your merchandise mix: 6 product assortment tipsGet clear on your store's image and purpose. ... Analyze your inventory data. ... Observe shopping habits and patterns. ... Pay attention to local and national trends. ... Remember that seasonality is important. ... Use the right tools.
What is an example of assortment?
An example of assortment is the filing of papers into categorized folders. A collection of varying but related items. This box has an assortment of chocolates, there's a picture on the cover so you know which is which. Assortment is defined as a group of things that vary in type.
What is assortment planning?
Assortment planning is about using data to guide the creative process. It’s about determining customer demand and ensuring decisions are made with the customer in mind. It’s about seeing plans through and learning from results. And it’s about making smart decisions that have a positive impact on the bottom line.
How does success depend on fashion?
For fashion retailers, the company’s success depends on the strength of the assortment. Yet many are content to stay with the status quo when it comes to the way they plan and buy.
What is the merchant's responsibility?
As concepts take hold and styles are mapped out, it is the merchant’s responsibility to buy products in just the right quantity to match customer demand. This means making decisions early in the buying cycle about which styles are appropriate for which locations, and buy basing quantities on those decisions.
Who is responsible for product mix?
Traditionally merchants are responsible for the product mix and allocation worries about individual locations. But it’s at this point in the buying cycle, before buys are committed, that customer demand has to be assessed and matched. This creates a partnership between the merchants and allocation.
What happens after a buy is quantified?
After buys are quantified and committed, the assortment planning process continues as results are measured. Merchants should be constantly reviewing previous buys to learn from their successes and failures. Results inform future buys, making assortment planning a cyclical process.
What is the responsibility of merchandise planning?
Another key responsibility of Merchandise Planning is to rank stores by sales performance and other factors to determine their assortment level. All stores might not receive every item in your assortment.
Who is the author of Merchandise Assortment Options?
Merchandise Assortment Options. Authored by: Robert Danielson. Provided by: Lumen Learning. License: CC BY: Attribution
What is the process of determining product in each merchandise category?
What: Assortment Planning is the process of determining product in each merchandise category.
What do different retailers stand for?
Different retailers will stand for different things: exclusive products, lowest prices to beat competition, designer goods, highest quality products, etc.
What is assortment planning?
Assortment planning is about making the right product picks and ordering the right quantities to match market demand. These decisions affect both retailers and manufacturers supplying them.
How do retailers plan their assortment?
First, they must adapt their category and product choices to the potential, but also the limitations of their outlets. Busy stores in city centers might do better with one type of assortment, perhaps further adapted to suit smaller floor and shelf space. Larger outlets in suburban malls may need a different assortment, and so on.
How does PLM help in apparel?
Gains come from stopping repetitive data entry, closing gaps in communication, and avoiding human error. With the right PLM system, for instance, apparel designers can enter designs into the system straight from their design applications, such as Adobe® Illustrator. Manufacturers, wholesalers and retailers get enhanced visibility across the supply chain. Seasonal and fashion items sell within their window of sales opportunity, without having to cut prices. Buffer stocks and bullwhip effects go down. Sell-through, customer service, and inventory turns go up. Accurate assortment planning can turn reliably into profitability for the different actors in the supply chain.
How to determine the assortment of a product?
The first step in assortment planning is understanding the basics. Retailers define the range of products to be sold by width and depth: 1 The width is the number or variety of different product categories. 2 The depth is the amount of product and brand variation within an individual category.
What is the first step in assortment planning?
The first step in assortment planning is understanding the basics. Retailers define the range of products to be sold by width and depth:
What is integrated planning?
Integrated planning involves four key IT systems: PL M, ERP, demand and supply planning, and retail planning. We describe each of these systems below for a supply chain environment that spans brand merchandising, design and development, sourcing and production, supply chain management (SCM) and logistics, wholesaling, and retailing.
What is the importance of a fast changing product?
It lets them guarantee customer delight while ensuring good margins. An integrated planning approach makes customer satisfaction and profitability real, using PLM, ERP, demand and supply management, and retail planning. The right products are then available in the right quantities at the right time, which is everybody’s goal, supply chain actors and end-customers alike.
What is assortment planning?
Assortment planning is all above driving the most sales, but that doesn’t mean you should only stock up on your top sellers and complementary products. It’s important to vary your product offerings across category, type, color, price point, and even trendiness.
How to plan an assortment?
Consider these tips when planning your assortment: 1. Begin by setting goals to hold yourself and your team accountable, as well as evaluate progress over time. 2.
Why is assortment planning important?
On average, in-store shoppers spend more than online shoppers. In fact, 40% of in-store customers spend more than they had planned compared to just a quarter of online shoppers.
What goes beyond inventory purchasing and seasonality?
Like we mentioned above, assortment planning goes beyond inventory purchasing and seasonality. Other considerations include:
Why is it important to optimize your store?
It’s always important to optimize your store for a better experience and more conversions. Staying stagnant is the quickest way to falling behind the competition. There are tons of ways to increase profitability, from in-store events to influencer marketing and everything in between. One tactic you might not have heard of: assortment planning.
What is cross merchandising?
Cross merchandising is when you use complementary displays to cross-promote similar products in a shared category. This is an effective tactic because it’s a way of targeted in-store promotion based on product affinity.
What is product hierarchy?
Also known as the customer decision tree (CDT), product hierarchy is the process customers use to evaluate products of a shared category.
What is assortment planning?
Define an assortment planning strategy. Assortment planning is a critical step of category management. However, it is not dependent from other category management decisions. Assortment plans should always take into account the greater business strategy and the set of goals that you pre-define.
Why is assortment planning important?
In the long term, adopting an assortment planning strategy effectively will help you to better retain the loyalty of their shoppers.
Why is localised assortment planning so dependent on effective software?
Planning localised assortments is highly dependent on effective software because of the highly data-intensive nature of category management. DotActiv’s assortment planning software works from an SQL data platform and is integrated with shelf and floor planning software.
What is store clustering?
Store clustering or store grouping is the grouping of stores based on similar store and demographic characteristics. Store clustering is a critical step for the assortment planning process as it helps you to create localised assortment plans that meet the needs of local shoppers.
How can retailers improve their financial performance?
One of the main ways a retailer can increase the financial performance is by increasing the level of customer satisfaction through the variety of products on offer. An important factor to consider during the assortment planning process is that assortment variety increases inventory costs. Therefore it is important for assortments to be optimised.
Why is it important to determine the role of each category beforehand?
It is important to determine the role of each category beforehand as this will determine and direct the merchandising strategy that will be put into place to deliver on the category role. Ultimately, it will affect the product selection and space allocation.
How to measure shopper demand?
The factors can be measured by the analysing internal point of sale data and external market data.
What is assortment planning?
Assortment planning in retail involves selecting the collection of products which will be on offer in particular locations and during a specified season. It considers the financial objectives and seasonality of the product selection in a way so that both you and your customers gain from the outcome. Making the right product picks and bringing in the right quantities of supplies to match market demand are decisions that collectively make an assortment plan.
Why do we cross merchandise?
Cross merchandiseshould be performed for better shopping experience of customers at a time to gain customer loyalty, attract more foot traffic and increase sales.
What is shelf space planning?
Shelf Space Planning through planogram creation maximizes space and efficiently executes demand-driven category and assortment management. Planogram creating software helps to create cluster and assortment optimized individual store planogram. After a complete assortment planning process, planogramming is done that results in a single picture of the assortment plan including new, ongoing, and leftover product that can be assigned to planograms to align with space plans and constraints.
Why do retailers distribute products on shelves?
Product distribution on shelves in a retail store are done to support instore visual merchandising efforts which helps to improve store sales. A planogram implementation is only complete after it is read and understood , and then arranged on the shelf according to that planogram.
Why use clustering in store?
Use clustering for store grouping based on both performance (e.g. sales volume) and non-performance (e.g. store size) parameters. The store clusters support assortment planning and allocation as well as maintaining a customer-centric merchandise approach
