Tuesday, June 16, 2009

What is Assortment Planning ?

  • Assortment refers to the number of SKUs within a merchandise category, group or department(depending on the retailers reference).

  • Assortment planning is the process to determine what and how much should be carried in a merchandise category. Assortment plan is a trade-off between the breadth and depth of products that a retailer wishes to carry.

  • Fashion categories contain lesser details in the plan.

  • Questions to be considered:

    1. Which SKU’s drive sales and profits?

    2. What criteria should be used for adding and deleting items?

    3. Is the retailer missing opportunities by not carrying certain items?

    4. Which items represent true variety, not duplication?

    5. Which items are critical to consumer loyalty or category image?

    6. Which items are not contributing to the category?

Assortment Planning-Key highlights

Apparel Non-Apparel

  • Assortment planning for apparels requires a thought in "floor sets" and can be reviewed sometimes more than 12 times per year

  • In apparel the best practice in the retail scenario stresses that the class contribution to the Department Plans and the style contribution to the class plan be broken down and analyzed

  • Vendor Classification which is another important aspect when it come to assortment planning must be incorporated as a part of the process. Federated & Jones Apparel are the international players who classify vendors extensively

  • Some companies provide data on current trend, fashion direction, style etc. These kind of results act as a trigger to start the assortment planning

  • The best practices in assortment planning state that it must start 9 months before the start of the next buying season

  • Shelf space is a major considerations while doing assortment planning for non-apparels

  • Assortment planning for non-apparels usually follows a category management-style planning approach that requires determining the role of each category

  • When retailers introduce grocery products, they do so one item at a time after careful analysis of each product, and even then, they will want to mitigate their risk with the help of vendor support funds


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