Every retail business is concerned with profitability. And to be profitable, retail business owners need to stock the right category of products at the right time and locations. One proven way to achieve this is via assortment planning.
With the best assortment planning, business owners can strategically plan their inventories and manage their catalogues around alterations in sales volumes and demand across the year to maximise their profits and satisfy customers.
This article will cover assortment planning, how you can automate it via custom software development, and its benefits. Read on to learn more.
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Assortment planning in retail is a process that retail businesses use to determine products to sell during a given period. In simple words, assortment planning enables retailers to know what products to stock and where to sell them based on demand and customer preferences.
For instance, a clothing retailer may sell boots, sweaters, and fleece jackets during winter but change to sell breathable fabrics and swimsuits during the summer. It’s also vital to note that assortment planning is performed differently based on the location of the store. Your retail business should consider assortment planning when there is insufficient storage space, too much dead stock, permanent stock-outs, and uncontrolled SKU proliferation.
Assortment planning poses some challenges for businesses as they try to maintain speed with the ever-changing customer preferences, market demands, brand reputation, and inventory management. The danger of miscalculating consumer needs and desires can significantly affect the reputation and earnings of a brand.
All these challenges and wrongdoings can result in undesirable outcomes, such as a wrong inventory amount which can be costly. Businesses are then required to heavily discount and offer lots of promotions to help clear excess stock.
Doing so significantly eats into product margins while tarnishing brand reputation, with most consumers waiting for the massive end-of-the-season stock to have a better bargain. The best part is that you can avoid all these issues once you partner with the best custom software development provider, who’ll develop assortment planning software to help you automate the entire process.
At the core, retail assortment planning allows retailers to understand products to sell on an online platform or physical store and where they perform excellently. Through assortment planning, retailers can collect important sales information from previous customer purchases, which they can use to predict the demand for fresh products.
Assortment planning also makes retail replenishment and operations more efficient. Whether you’re a large, medium, or small retailer, automated assortment planning solutions will give you peace of mind. You’ll be able to make the best data-driven decisions that ensure each season is profitable. Find out more about how to automate the whole assortment planning process
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