The clothing industry is growing, and so is the retail one. There are thousands of retail clothing stores all over the world, as well those offering items online. Saying this it is clear that the competition is bigger than ever, and store management has to be really wise when it comes to product placement.
A thing called assortment planning has always been one of the major keys of a successful brand/store, but now the stakes have risen, and it is not as easy as it once was. With the customer demands to change from month to month, figuring out what products and how much of the same should be merchandised is not easy. If you put too much of one product and it doesn’t get sold you are going to end up losing money, while if you put too little though more could have been sold you are going to end up losing money once again.
Saying this, it is pretty clear that if you want to be successful in the retail industry, you got to have good assortment planning. Let’s see what the basics are and how to do it the right way!
The Basics Of Assortment Planning
The first question that is posed when assortment planning is, are you going to go for depth or width? Now, what are those terms you might ask? Depth represents an amount of the various brands and products that are in the same category (shoes for example), while the width represents the variety of different categories. It is simple – classic department retail stores will go for width, while shoes or dress store will opt for depth.
Then again, it is important to see what are the limits of your retail store. When we talk limits we think of is your store situated in a city center, or it is included in a big mall that is in a city suburb. If your store is smaller, for example, one-floor, of course, you will aim to expose the best quality products and brands that are popular and profitable the most. On the other hand, if you have a larger store in a city mall, you have enough room to do assortment planning on different levels.
The mistake most of the people in the retail industry make is going for the same assortment planning for all of the stores they own. Exactly because of the reason we mentioned above, this does not work, and it is called clustering. Instead of thinking about how to save your time and money, invest in good assortment planning as it will pay off in numerous ways.
How To Use Assortment Planning To Drive Supply Chain The Right Way
By now, it is probably pretty clear that the way you plan out the assortment goes the supply chain. If you go for reconciliation and plan out on long terms, it might work for a while, but as soon as a curve in demand happens, you are not going to have enough time to react. On the other hand, there is the ad hoc method which allows you to react fast from manufacturing to retailing, but in long terms, it might cause a huge supply chain stress. That is why integrated planning combining the two seems to be the best choice. It consists of four systems – Product Lifecycle Management, Enterprise Resource Planning, Demand And Supply Management, Retail Planning. This way everything is under control during the all four steps of a products cycle – manufacturing; logistics; wholesaling; retailing.
The integrated method also allows you to reduce the cost of production while still increasing the efficiency, and that is what you call in economics optimization.
We hope that this article gave you at least a brief look at how the assortment planning works and how important is the same. When the integrated system is done right, you are sure to have good margins and satisfied customers all year long!