What is Assortment Planning?

Assortment Planning

Assortment planning is a strategic retail process that helps retailers decide on the optimal mix of products and stock the right products at right time to meet customer demands.

Key Components of Assortment Planning

• Breadth/Width refers to the variety of product categories offered. A diverse breadth caters to different customer preferences and increases foot traffic, allowing retailers to manage their SKU count effectively.
• Depth focuses on the variations within each product category, such as sizes, colours, and styles. This component helps retailers maximize sales opportunities by providing options that meet diverse consumer needs.
• Consistency is about how well different product lines relate to each other. By doing so you create a cohesive shopping experience and encourage cross-selling opportunities.
• Allocation involves distributing products across various locations and sales channels based on demand. With proper inventory alignment with local market demands, you can reduce the risk of stockouts or excess inventory.
• Price Positioning is to determine how each product is priced within the assortment. A well-thought-out pricing strategy can attract different customer segments and enhance profitability.

Benefits of assortment planning

Boosts Customer Satisfaction: By having the right products on hand, customers feel valued, leading to loyalty and repeat visits.

Increases Sales and Profit Margins: Focusing on popular items means more sales and better profits.

Cuts Down Inventory Costs: Retailers can save money by identifying and eliminating low-performing products, which will help decrease excess stock.

Maximizes Store Space: Strategic placement of products maximizes available space, enhancing the shopping experience.

Tailors to Local Preferences: Offering products that cater to local tastes creates a more favourable and enjoyable shopping experience for customers.