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Mastering the Art of Assortment Planning: A Comprehensive Guide for Fashion Retailers
Mastering the art of Assortment Planning is a crucial aspect of the success for both E-commerce and department store fashion retailers.
Assortment plans need to be comprehensive and agile. This means they have to adapt to ever-changing customer preferences. They must drive sales with reliable data. And they have to foster brand loyalty by offering a personalised experience.
Assortment plans need to be comprehensive and agile. This means they have to adapt to ever-changing customer preferences. They must drive sales with reliable data. And they have to foster brand loyalty by offering a personalised experience.
Fashion retail is an extremely dynamic and ever-evolving industry. If a retailer has any chance of competing, they have to take a strategic approach to merchandise management.
And one of the most crucial aspects of this approach is fashion retail Assortment Planning.
But what exactly is Assortment Planning and why is it so important for fashion retailers?
In the simplest terms, Assortment Planning is the process of figuring out the right mix of products, sizes, colours, and styles to offer customers in a retail store or online.
And one of the most crucial aspects of this approach is fashion retail Assortment Planning.
But what exactly is Assortment Planning and why is it so important for fashion retailers?
In the simplest terms, Assortment Planning is the process of figuring out the right mix of products, sizes, colours, and styles to offer customers in a retail store or online.
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The ultimate goal of an Assortment Plan is to maximise sales and profitability while giving customers an engaging and memorable shopping experience.
And that well-crafted Assortment Plan is down to an excellent Assortment Planner.
These professionals are responsible for working with both the retailers and suppliers to ensure that the right mix of products is available to customers at all times, and they help retailers to respond quickly to changes in the market.
Assortment Planning can be the difference between retail success and failure for both e-commerce and department store fashion retailers.
And just like creating the products that make up the assortment is an art, so is curating it.
So, whether you're a seasoned fashion retailer or just starting out, this article will provide you with a comprehensive overview of fashion retail Assortment Planning and the key elements you need to consider to master the art of Assortment Planning.
And that well-crafted Assortment Plan is down to an excellent Assortment Planner.
These professionals are responsible for working with both the retailers and suppliers to ensure that the right mix of products is available to customers at all times, and they help retailers to respond quickly to changes in the market.
Assortment Planning can be the difference between retail success and failure for both e-commerce and department store fashion retailers.
And just like creating the products that make up the assortment is an art, so is curating it.
So, whether you're a seasoned fashion retailer or just starting out, this article will provide you with a comprehensive overview of fashion retail Assortment Planning and the key elements you need to consider to master the art of Assortment Planning.
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Assortment Planning in Fashion Retail
There aren’t a lot of universal industries that have innovation and forward-thinking built into its actual concept like fashion does. Retailers must continually keep on top of what is best, brightest, and what’s coming around the corner.
And that requires a lot of effort.
Having the right mix of products on the shelves or online is essential to success, which is where impactful Assortment Planning comes in.
It’s a very intensive process that involves constantly analyzing consumer demand, market trends, and sales data to make the best and most informed decisions about what merchandise to stock, when to stock it, where to stock it (in the case of brick-and-mortar retailers), and in what qua ntities.
A well-crafted Assortment Plan both allows and enables retailers to respond quickly to shifts in consumer demand. This is important because it helps avoid overstocking or understocking, stays on top of the latest trends, and makes customers happier.
There aren’t a lot of universal industries that have innovation and forward-thinking built into its actual concept like fashion does. Retailers must continually keep on top of what is best, brightest, and what’s coming around the corner.
And that requires a lot of effort.
Having the right mix of products on the shelves or online is essential to success, which is where impactful Assortment Planning comes in.
It’s a very intensive process that involves constantly analyzing consumer demand, market trends, and sales data to make the best and most informed decisions about what merchandise to stock, when to stock it, where to stock it (in the case of brick-and-mortar retailers), and in what qua ntities.
A well-crafted Assortment Plan both allows and enables retailers to respond quickly to shifts in consumer demand. This is important because it helps avoid overstocking or understocking, stays on top of the latest trends, and makes customers happier.
Struggling with Assortment Planning?
Discover how by scrutinising sales data and trend insights you can handpick the perfect blend of products for your customers.
Understanding the Customer
As a fashion retailer, you must understand your customer if you want to create a successful merchandise assortment plan.
Knowing your target demographics and customers’ preferences, needs, and ever-changing buying habits is absolutely crucial to making informed decisions about what products to stock and in what quantities.
And this involves differentiating between classic items and trendy items. After all, most customers have a closet that’s filled with pieces from both types of offerings.
For the most part, classic items like a crisp white shirt are timeless and enduring, while trendy items like a red fringed metallic jacket might only be usable for a limited time.
That means that retailers are expected to cater to lovers of both sets of offerings on any given day. Failure to do so can have serious consequences, such as decreased sales and a loss of market share.
As a fashion retailer, you must understand your customer if you want to create a successful merchandise assortment plan.
Knowing your target demographics and customers’ preferences, needs, and ever-changing buying habits is absolutely crucial to making informed decisions about what products to stock and in what quantities.
And this involves differentiating between classic items and trendy items. After all, most customers have a closet that’s filled with pieces from both types of offerings.
For the most part, classic items like a crisp white shirt are timeless and enduring, while trendy items like a red fringed metallic jacket might only be usable for a limited time.
That means that retailers are expected to cater to lovers of both sets of offerings on any given day. Failure to do so can have serious consequences, such as decreased sales and a loss of market share.
By staying on top of trends and understanding what customers want, retailers can ensure that they are offering the right products at the right time.
One of the most effective ways to collect customer data is through surveys, monitoring social media, and looking at purchase history data.
This information can be used to inform Assortment Planning decisions because they help retailers better understand both what their customers want and what they are likely to purchase.
Retailers can also use data analysis tools that streamline their market research and customer data collection processes, making it easier to make informed decisions about their merchandise Assortment Plan.
One of the most effective ways to collect customer data is through surveys, monitoring social media, and looking at purchase history data.
This information can be used to inform Assortment Planning decisions because they help retailers better understand both what their customers want and what they are likely to purchase.
Retailers can also use data analysis tools that streamline their market research and customer data collection processes, making it easier to make informed decisions about their merchandise Assortment Plan.
Market Analysis
Market Analysis is the foundation of the best Assortment Plans. What makes market analysis so difficult is the breakneck speed at which the industry evolves. And capitalising on any opportunities that come from market analysis requires resources and the time for creativity.
It’s a huge challenge to stay ahead of the curve, and most Assortment Planners lack the resources they need to get the best possible outcomes.
That means the brand risks falling behind their competitors and losing customers.
Market Analysis is the foundation of the best Assortment Plans. What makes market analysis so difficult is the breakneck speed at which the industry evolves. And capitalising on any opportunities that come from market analysis requires resources and the time for creativity.
It’s a huge challenge to stay ahead of the curve, and most Assortment Planners lack the resources they need to get the best possible outcomes.
That means the brand risks falling behind their competitors and losing customers.
Essential 3 Things in Impactful Market Analysis
- 1Researching the fashion industry and current trendsTo craft an assortment plan that resonates with consumers, retailers must stay informed about the latest local and international fashion trends. This helps them curate dynamic, exciting merchandise that appeals to their target audience.
- 2Analysing retail competitors' assortmentsThis is very important for retail success. Retailers must assess strengths and weaknesses in competitors' assortment because this information will give insights into what works and doesn’t work.
- 3Identifying gaps in the market and opportunities for differentiationWhen retailers can spot gaps in the market and devise strategies to fill them, they strengthen their unique value proposition. And, it can lead to developing unique and innovative products that set a retailer apart.
Assortment Optimisation
Assortment Optimisation is a key component of a great Assortment Plan for both E-commerce brands and department stores.
The problem is that the processes involved in this optimisation can burn up significant resources, time, and money. In fact, achieving an optimised assortment may be impossible without the proper tools and resources necessary to both deliver the best results and maintain a competitive edge in the retail industry.
So what are the most important factors that an optimised assortment strategy has to consider?
Assortment Optimisation is a key component of a great Assortment Plan for both E-commerce brands and department stores.
The problem is that the processes involved in this optimisation can burn up significant resources, time, and money. In fact, achieving an optimised assortment may be impossible without the proper tools and resources necessary to both deliver the best results and maintain a competitive edge in the retail industry.
So what are the most important factors that an optimised assortment strategy has to consider?
Balancing Depth and Breadth
One of the core challenges for any assortment planner is striking the right balance between depth (the number of SKUs within a category) and breadth (the number of categories).
Getting this balance right requires careful analysis of sales data, customer feedback, and market trends to ensure that each category and SKU contributes to the overall success of the assortment plan.
A well-balanced assortment enables retailers to cater to a diverse range of customer needs and preferences without overwhelming them with excessive choices. And in the case of department stores, it stops the store by becoming overwhelmed with too much stock.
One of the core challenges for any assortment planner is striking the right balance between depth (the number of SKUs within a category) and breadth (the number of categories).
Getting this balance right requires careful analysis of sales data, customer feedback, and market trends to ensure that each category and SKU contributes to the overall success of the assortment plan.
A well-balanced assortment enables retailers to cater to a diverse range of customer needs and preferences without overwhelming them with excessive choices. And in the case of department stores, it stops the store by becoming overwhelmed with too much stock.
Removing Low-Performing SKUs
Low-performing SKUs must be removed from the plan. Given the current economic circumstances of post-pandemic instability and inflation, two-thirds of fashion executives are changing assortment structures, reprioritising, and cutting and streamlining assortments.
They need to save money and maximise profit margins wherever possible.
This means that the best decisions about which products should be cut is now more important than ever. Regularly reviewing sales data and customer feedback enables retailers to find them and figure out if they need to be simply removed, or replaced as well.
This helps retailers avoid getting stuck with obsolete inventory, and reduces carrying costs. It also frees up valuable resources for investment in more exciting and higher-performing products.
Low-performing SKUs must be removed from the plan. Given the current economic circumstances of post-pandemic instability and inflation, two-thirds of fashion executives are changing assortment structures, reprioritising, and cutting and streamlining assortments.
They need to save money and maximise profit margins wherever possible.
This means that the best decisions about which products should be cut is now more important than ever. Regularly reviewing sales data and customer feedback enables retailers to find them and figure out if they need to be simply removed, or replaced as well.
This helps retailers avoid getting stuck with obsolete inventory, and reduces carrying costs. It also frees up valuable resources for investment in more exciting and higher-performing products.
Implementing Customer Segmentation
Customer segmentation impacts fashion retail assortment optimisation. It allows them to create a more personalised and appealing product assortment to segments based on their unique preferences and behaviours.
And segmentation allows retailers to set prices that are more competitive and profitable, and most suitable to the target demographic. Luxury brands have customers that are willing to pay more. And fast-fashion brands tend to attract younger customers who want more affordability.
Customer segmentation impacts fashion retail assortment optimisation. It allows them to create a more personalised and appealing product assortment to segments based on their unique preferences and behaviours.
And segmentation allows retailers to set prices that are more competitive and profitable, and most suitable to the target demographic. Luxury brands have customers that are willing to pay more. And fast-fashion brands tend to attract younger customers who want more affordability.
Still using Excel to create Assortment Plans?
Learn how to reduce the nightmare of inventory overstock or understock by using planning solutions for Fashion Retail
Streamlining the Assortment Planning Process with Technology
Developing an Assortment Plan is a big ask.
And it eats up a lot of resources.
The problem is that once again, most Assortment Planners aren’t given anywhere near the resources they need. So they struggle to keep up. That means mistakes are made and opportunities are lost.
But when an Assortment Planner is given help, the opportunity for success is unmistakable.
And that’s where technology comes in.
Whether a fashion retailer is an E-commerce or a department store brand, technology has become a tool for simplifying the end-to-end process.
Through advanced algorithms, AI-driven solutions, and user-friendly interfaces, technology enables retailers to automate key aspects of the planning process, such as analyzing sales data, identifying trends, and determining the optimal product mix.
By streamlining these tasks, technology frees up valuable time and resources, empowering retailers to focus on other critical aspects of their business.
Developing an Assortment Plan is a big ask.
And it eats up a lot of resources.
The problem is that once again, most Assortment Planners aren’t given anywhere near the resources they need. So they struggle to keep up. That means mistakes are made and opportunities are lost.
But when an Assortment Planner is given help, the opportunity for success is unmistakable.
And that’s where technology comes in.
Whether a fashion retailer is an E-commerce or a department store brand, technology has become a tool for simplifying the end-to-end process.
Through advanced algorithms, AI-driven solutions, and user-friendly interfaces, technology enables retailers to automate key aspects of the planning process, such as analyzing sales data, identifying trends, and determining the optimal product mix.
By streamlining these tasks, technology frees up valuable time and resources, empowering retailers to focus on other critical aspects of their business.
Improving Decision-Making through Data-Driven Insights
Tech provides excellent data-driven insights. And these insights help retailers make the best decisions possible about their merchandise assortment plans, ensuring that their product offerings align with customer preferences and market trends.
By leveraging data analysis, retailers can identify high-performing SKUs, spot emerging trends, and optimize their assortments for maximum impact.
Tech provides excellent data-driven insights. And these insights help retailers make the best decisions possible about their merchandise assortment plans, ensuring that their product offerings align with customer preferences and market trends.
By leveraging data analysis, retailers can identify high-performing SKUs, spot emerging trends, and optimize their assortments for maximum impact.
Adapting to Changing Consumer Trends and Market Conditions with Technology
Adaptability is THE crucial trait for E-commerce and department store fashion retailers.
Technology plays a pivotal role in helping retailers stay agile and responsive to these changes by providing real-time data on customer behavior, preferences, and purchasing patterns.
This information enables retailers to identify shifts in the market and make timely adjustments to their assortment plans. Product offerings remain up-to-date and appealing to customers.
Adaptability is THE crucial trait for E-commerce and department store fashion retailers.
Technology plays a pivotal role in helping retailers stay agile and responsive to these changes by providing real-time data on customer behavior, preferences, and purchasing patterns.
This information enables retailers to identify shifts in the market and make timely adjustments to their assortment plans. Product offerings remain up-to-date and appealing to customers.
Benefits of Using Assortment Planning Software
In recent years, Assortment Planning solutions have become a popular choice for fashion retailers seeking to harness the power of technology for their Assortment Planning needs.
Besides the obvious benefits of an automated end-to-end Assortment Plan that saves time and drives profits, there are other excellent benefits that Assortment Planning software can bring.
In recent years, Assortment Planning solutions have become a popular choice for fashion retailers seeking to harness the power of technology for their Assortment Planning needs.
Besides the obvious benefits of an automated end-to-end Assortment Plan that saves time and drives profits, there are other excellent benefits that Assortment Planning software can bring.
- ScalabilityAssortment Planning software can easily scale to accommodate retailers' changing needs, providing a flexible solution that grows with the business. It also provides opportunity to implement in stages.
- Easy IntegrationMany solution providers offer seamless integration with retailers' existing systems and processes. This ensures a smooth and hassle-free transition that starts automating everything right away.
- Updates and SupportSoftware provides regular and reliable updates and ongoing support, so that retailers don’t ever feel lost and have access to the best features and functionality.
Success Story: ABOUT YOU
How to solve scalability challenges and eliminate wasted time and resources with automated assortment planning
ABOUT YOU digitizes the classic shopping stroll by creating an inspiring and personalized shopping experience on the smartphone. At ABOUT YOU, the focus is on the customers, who are supported in expressing themselves individually through fashion.
On the website aboutyou.com and the multi-award winning ABOUT YOU app, customers find versatile inspiration and more than 500,000 items from over 3,500 brands. With more than 45 million unique active users per month, ABOUT YOU is one of the largest fashion and lifestyle stores in Europe. It is currently active in 26 European markets.
With SCAYLE, the fashion tech company also offers its own E-commerce infrastructure as a licensed product.
Despite all this success, at a particular point ABOUT YOU hit a roadblock. Something then stood in the way of ABOUT YOU and their mission.
On the website aboutyou.com and the multi-award winning ABOUT YOU app, customers find versatile inspiration and more than 500,000 items from over 3,500 brands. With more than 45 million unique active users per month, ABOUT YOU is one of the largest fashion and lifestyle stores in Europe. It is currently active in 26 European markets.
With SCAYLE, the fashion tech company also offers its own E-commerce infrastructure as a licensed product.
Despite all this success, at a particular point ABOUT YOU hit a roadblock. Something then stood in the way of ABOUT YOU and their mission.
The Problem
ABOUT YOU’s mission to revolutionize the E-commerce fashion and lifestyle retail industry with a personalized shopping experience led to very rapid success and growth.
With high volumes, complex processes, and a need for speed and flexibility for a growing assortment, their outdated Excel spreadsheets were no match for the challenges they faced.
If ABOUT YOU had any hope of meeting its present and future goals, it needed a new system that was flexible, efficient, and integrated into all their data systems. It needed to be automated, low-maintenance, and carry through the end-to-end process.
ABOUT YOU turned to KIVALUE, to work together known for a planning solution that seamlessly integrated business intelligence and eliminated the need for additional data sources. It would solve ABOUT YOU’s growing pains and create an assortment plan with confidence, ready to continue changing the retail game.
This would then allow ABOUT YOU to focus on what they do best: providing a unique and engaging experience for each customer.
With high volumes, complex processes, and a need for speed and flexibility for a growing assortment, their outdated Excel spreadsheets were no match for the challenges they faced.
If ABOUT YOU had any hope of meeting its present and future goals, it needed a new system that was flexible, efficient, and integrated into all their data systems. It needed to be automated, low-maintenance, and carry through the end-to-end process.
ABOUT YOU turned to KIVALUE, to work together known for a planning solution that seamlessly integrated business intelligence and eliminated the need for additional data sources. It would solve ABOUT YOU’s growing pains and create an assortment plan with confidence, ready to continue changing the retail game.
This would then allow ABOUT YOU to focus on what they do best: providing a unique and engaging experience for each customer.
ABOUT YOU turned to KIVALUE, to work together known for a planning solution that seamlessly integrated business intelligence and eliminated the need for additional data sources. It would solve ABOUT YOU’s growing pains and create an assortment plan with confidence, ready to continue changing the retail game.
This would then allow ABOUT YOU to focus on what they do best: providing a unique and engaging experience for each customer.
This would then allow ABOUT YOU to focus on what they do best: providing a unique and engaging experience for each customer.
The Solution
ABOUT YOU’s assortment planner needed a fairly wide project scope that included three main areas - Admin, Buy Plan and InSeason Forecast.
The plan would require constant comparison between the BuyPlan and the InSeason forecast to keep things running. All while meeting the planning and forecasting levels of: StyleGroup, ProductGroup, Brand, Season, Merchant, and Month.
The plan would require constant comparison between the BuyPlan and the InSeason forecast to keep things running. All while meeting the planning and forecasting levels of: StyleGroup, ProductGroup, Brand, Season, Merchant, and Month.
Admin
VAT, logistic cost rates, and global planning parameters
Buy Plan
Automating net revenue, markdowns, retail price, returns, margins, order, assortment width and assortment depth
InSeason Forecast
The most agile part, handling net revenue, markdown, retail prices, returns, margins, receipts, and stock projection
The Impact
ABOUT YOU implemented KIVALUE’s solutions to enjoy concrete results. Process efficiency was increased which meant a reduction in preparation time, less data processing and more data analysis, and implication of collaborative work through a single point of truth. Because of this they saved time and headaches.
But that wasn’t all. There was also a substantial improvement of planning quality. More data was accessible in procurable form which meant easier access to the various planning dimensions.
The brand spent less time on data processing allowed time-investment in more advanced analysis. Improved qualitative exchange with buying teams. And more flexible customisation options enable insight gain through ad-hoc simulations.
Because of the new, automated, streamlined assortment plan, ABOUT YOU was back on target to expand its operations and offer a vast assortment of clothing, footwear, and accessories.
ABOUT YOU implemented KIVALUE’s solutions to enjoy concrete results. Process efficiency was increased which meant a reduction in preparation time, less data processing and more data analysis, and implication of collaborative work through a single point of truth. Because of this they saved time and headaches.
But that wasn’t all. There was also a substantial improvement of planning quality. More data was accessible in procurable form which meant easier access to the various planning dimensions.
The brand spent less time on data processing allowed time-investment in more advanced analysis. Improved qualitative exchange with buying teams. And more flexible customisation options enable insight gain through ad-hoc simulations.
Because of the new, automated, streamlined assortment plan, ABOUT YOU was back on target to expand its operations and offer a vast assortment of clothing, footwear, and accessories.
"We wanted a solution where right from the start we could focus not the technology itself, but on what the team does best - planning - end-to-end process bottom-up and top-down where everything is synchronised and linked together"
MARTIN WALTER
Head of Merchandise Planning at ABOUT YOU
The plan also harmonises with the E-commerce platform’s use of machine learning and artificial intelligence. This means the platform can collect data on algorithms and present and past customer behaviour to not only make personalised recommendations, but to help with forecasting and stock replenishment to maximise that customer personalisation that is unique to each and every customer.
And ABOUT YOU is on track to become the world’s no. 1 fashion platform. They’re now present in 26 markets serving 45 million active customers per month.They bring additional revenue for Fashion brands (~600,000 products ~3,500 brands).
And ABOUT YOU is on track to become the world’s no. 1 fashion platform. They’re now present in 26 markets serving 45 million active customers per month.They bring additional revenue for Fashion brands (~600,000 products ~3,500 brands).
DOWNLOAD SUCCESS STORY
WHAT'S INSIDE
- How ABOUT YOU team transitioned from Excel spreadsheets to fully automated Retail Planning
- What was the impact of collaborative work through a single point of truth for 80+ users
- How the planners achieved bottom-up and top-down planning process synchronisation
At KIVALUE we cover end-to-end
fashion retail processes
fashion retail processes
From connecting merchandising, buying, and planning processes to omnichannel inventory and markdown management
We offer FREE assessment of your current solution requirements.
We offer FREE assessment of your current solution requirements.
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