Professional Documents
Culture Documents
PLANNING
RETAIL BUYING and CATEGORY MANAGEMENT
Objectives:
To understand the need for Assortment Planning.
To understand the components of Assortment Planning.
To understand the factors affecting an Assortment Plan.
To understand the process of Assortment Planning.
High Inventory
Costs
New lines & Products
Lead Times
Promotions
Fluctuate
demand
Excessive Inventory
New customers
Planning
Poor collaboration
between Sales,
Marketing, Demand
Management,
Operations
and with
CUSTOMERS
Sell in Vs Sell
through
Multiple
Product
attributes make Demand
Planning challenging
Annual Budget
Sales and Marketing Forecast
Demand / Supply Balancing
KPI and Management Dashboards
Optimization
Volume Planning
Funds Management
Event Planning
Trade Promotion
Management &
Optimization
Understand Demand
Assumptions Planning
POS Monitoring
Collaboration
Forecasting
Demand
Management
Openings
Replenishment
New Product Introduction
Assortment Planning
Respond to Demand
Strategic
Planning
Assortment
Planning
Location
Planning
Merchandise
Planning
Slow seller
Management
Merchandise Planning
Assortment Planning
The aim of assortment planning is to create assortments and define
which products are listed for which stores and the quantity of these that
should be allotted to individual stores.
Within an article hierarchy , the buyer can plan several levels, for
example, product (style), color (variant) or the price band.
The best test for the success of any process is time. As more parties utilize the
process and discover the benefits -- whether increased sales, margins or
customer satisfaction -- the company's culture will absorb the assortment
planning process into its daily activities, making it the normal way of
doing business.
Today's marketplace demands the right mix of products for the right customers.
Old methods for determining product assortments SHOULD NOT hinder
chance to succeed.
Defining an actionable strategy, setting financial goals early, developing
lines using appropriate breadth analysis and assign merchandise to stores
based on attribute matches. This will result in bottom line performance
growth.
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Assortment Strategies
=
Faster Turnover
Ease of Stocking
Using less room & display
area
Ease of re-ordering,
checking & receiving
Simplified counting, and
Avoidance of Markdowns
Customers are not offered a
wide selection of products
Presentation of a wide
variety of goods
A high degree of stopping
& pulling power
A slant to those customers
of discriminating taste
Frequent re-ordering is
required which makes it a
costly method of inventory
Managing Assortments
In order to satisfy customers and remain ahead of
competition, new products must be continuously added
while others must be deleted.
Stock Breadth can be increased by adding other product
lines or additional items in an existing product line but
new products may divert sales from present assortments.
Cannibalization occurs when potential sales of existing
products are lost to new items.
Merchandise Classifications
A merchandise classification system is needed to provide the means
for better planning and control of inventory.
Classification & Sub-Classification:
Classification: refers to the particular kinds of goods in a store or
department. E.g. Mens Shoe Department
Each of these broad product categories could be further divided into
Sub-Classification. E.g. Mens Dress Shoes, Casual Shoes etc.
The type/size of the store/dept. , the image , the target market and
financial resources available will affect the number of classifications
and sub-classifications needed.
Merchandise Classifications
Examples of Merchandise Classifications:
Mens Shoes
Dress Shoes
Oxfords
Slip-Ons
Casual Shoes
Oxfords
Slip-Ons
Athletic Shoes
Running Shoes
Court Shoes
Cleated Shoes
Womens Shoes
Dress Shoes
High Heels
Medium Heels
Low Heels
Evening Shoes
High Heels
Medium Heels
Low Heels
Casual Shoes
Medium Heels
Low Heels
Wedge Heels
Merchandise Classifications
Selection Factors:
Each sub-classification of merchandise can also be broken down by
various selection factors, which are product characteristics most
important for the customers as they make their purchasing decisions.
Preparing an
Assortment Plan
A Model Stock does not have to be followed rigidly during selling
season.
It should serve only as a guide because demand in regard to various
selection factors will vary during the season.
Adjustments have to be made once the selling season is underway.
Re-orders also change the nature of Model Stock.
Fashion Buyers cannot be as specific as other buyers when developing
model stocks.
Total number of
Units to be
bought
SIZE
300
XL
Total
15%
20%
45%
20%
100%
45
60
135
60
300
COLORS
White
20%
12
27
12
60
Gray
35%
16
21
47
21
105
Black
15%
20
45
Green
15%
20
45
Garnet
15%
20
45
TOTAL
100%
45
60
135
60
300