Assortment planning is an important part of any retail business. It is the key to maximize profits and better manage your inventory. In this article, we will provide everything you need to know about this process:
What Is Assortment Planning?
Assortment planning is a stage where retail businesses decide on the types of products to sell in order to maximize profits. Imagine you can’t buy a huge stock, but also can’t buy at a low quantity. The main challenge is to identify the right amount and quality of stock so that it never creates a loss.
Why Do You Need Assortment Planning?
It’s always essential to identify and quantify customers’ needs in the market to avoid losing customers or wasting stock. You need to understand the basic requirements, such as researching the niche market, choosing the best products and selecting appropriate suppliers. With assortment planning, you will be able to identify the market and plan ahead what amount of products are needed, as well as how to sell them to the target customers.
Tips For Assortment Planning Success
Have A Goal
You should always have a goal while doing assortment planning in the retail industry. Try to understand and specify what type of products customers need more, as well as what are the best retail and manufacturing unit products. You may also set specific goals regarding their price based on target customers’ affordability. All in all, the proper calculation is very important here.
For assortment planning, you should definitely make use of data. Without data, no planner can find out the approximate number of products bought and sold. Once you have a proper figure, data, quantity details (for example from your point-of-sale system), you will be able to gain more insights into your selling activities. Data analysis is very important in planning the business activities ahead.
You should also find out which particular product is well-loved and can be potentially sold with high demand, and which product will not be so popular in a store. Based on that, you can decide on how much you need to place an order for your store.
As a store owner, you must understand the product characteristics and demand. For example, how much product will be sold within one month or 6 months, or what are the conditions required to store this product? As a business planner, you should always understand your products to come up with a proper inventory plan and selling strategies. Aside from that, you also have to check the proper market demand for that particular product and place an order accordingly.
Cross-sell and Up-sell
You can make use of cross-selling and up-selling. While cross-selling is when you invite customers to purchase complementary products, up-selling occurs when you encourage customers to opt for a more expensive product. Calculating how to combine these 2 strategies in the assortment planning can be beneficial for your business to boost sales. It is also useful to keep in mind the specific type of products you sell and how they can promote each other.
Encourage Impulse Buy
You can also encourage your customer to buy a particular product directly in-store. Explaining with customers why they need it and what the benefits of those products are can be a good start. Be authentic about your advice and try to avoid forcing them is key to persuade customers.
In order to encourage an impulse buy, choosing the right type of product also matters. The impulse buy is more likely to happen for cheaper items, so businesses should keep this in mind when coming up with a strategy for this type of purchase.
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