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Beyond Product Planning: Assortment Planning (Part II of Series)

Terry J. Donofrio, President
Retail Systems and Services (RS&S)

Our first article explained why retailers must go beyond basic product planning and outlined what those important additional planning capabilities are.  This article addresses in detail the first of these additional capabilities—Assortment Planning and its related aspects.

 What Good Assortment Planning Does

Assortment planning breaks the Merchandise Plan down into the components that enable the planner to address customer preference and need.  These components are product attributes, styles, colors, and SKUs.  By addressing these components, the assortment plan becomes the transition to the customer by way of the store. 

 In developing a good assortment plan, the retailer hopes to:

	Manage inventory while addressing customer need and demand
	Develop a complete range of merchandise for presentation
	Enhance and maintain the company philosophy and image
	Support and execute the overall merchandising strategy
	Integrate with other planning processes, such as merchandise allocation

The assortment plan, then, provides the most effective way to balance the presentation of merchandise to the customer.  The properly assorted presentation ensures enough selection without overstocking and strikes the right balance between breadth (e.g. number of styles) and depth (quantity of each style).  In addition, the good assortment plan considers seasonality, to provide the right merchandise flow.   

 Because assortment planning addresses the most detailed element of merchandising to the customer—the items for sale—the process is often very detailed and time-consuming.  Automation is therefore a must in building effective assortment plans.