What do you offer your customers? Does your products and services reflect the businesses overall goals and objectives? Does the products and services complement each-other? Do you have data to support past revenues? Is it your target market who are actually buying your products and services? Are there external factors to think about? If you have thought about all of the above questions you are in good shape to get a solid plan up and running.
Assortment planning is when a buyer determines the specific quantities and characteristics of each product that they will be purchasing in relation to specific factors such as the brand, colours, sizes and materials. The goal of the assortment plan is to have a balance of merchandise that meets the needs of as many customers as possible. (Highlighting the importance of understanding your customer).
When evaluating what merchandise to carry, a buyer needs to think about the type of merchandise, store policies and variety of merchandise.
Types of merchandise needs to be groups into fashion or basic categories. Fashion merchandise sees high revenues and turnover in a short period of time, usually a season, and demand can end abruptly. Basic merchandise is what customers expect to see year in and year out. Basic merchandise is limited to what space is available, and historic sales gives insight into sales forecasts. There is also seasonal basics are products that consumers buy only certain times of the year, and is consistent year to year.
Convenience or Speciality Products are those that customers expect stores to have, and speciality products usually need to have a brand name association (hello licensing opportunities).
Store Policies are guidelines for products and are focused around quality and price range, exclusivity and brands. These need to be adapted for the target markets, and the expectations around image with exclusive offerings and a mix of national and private brands.
Variety of Merchandise Available is an investment in inventory in a variety of merchandise carrying a number of different product lines. A product line is a broad category of products having similar characteristics. One must also consider the stock of breadth, number of product lines carried or the number of brads carried within a product classification, and the stock depth, the number of choices offered to customers within each brand or product classification.
Narrow and deep assortment plans are those where there is a large stock of few product categories and brands, Walmart does this. There is also broad and shallow assortment plans, with a large number of product lines with limited choices within each brand. Man's clothing stores is an example. A balanced assortment is one where the breadth and depth meet the demands of customers.
For better planning, classifications and subclassifications need to be implemented for better planning and inventory control. Classifications are particular kinds of goods in a store or department store and subclassifications is groups of products that can be further divided into categories. These groupings are then given codes, such as 1000 and subclassifications are given more specific numbers, like 1100 is outwear and 1111 would be winter jackets. These makes inventory management easier and makes for better planning decisions.
So now we know how to decipher products within an assortment and policies to consider, and the number of products to consider, but how do we know the selection factors? You need to think about your target market and customer and think what are the factors to consider? Such as brand, price, size, colour and material.
A model stock is the desire assortment of stock broken down according to factors important to your target market, such as brand, price, material, colour and size. Trends and past sales help to determine a model stock and will allow a business to maximize profit from the investment.
There you have it, a bit of insight into how to pick the products for your retail location or what services to offer your customers. Remember, it really is all about your customer.
Light & Love,