What are the benefits and challenges of using the assortment planning framework?

1 What is the assortment planning framework?

The assortment planning framework is a systematic approach to creating and managing a product portfolio that meets the needs and wants of your target customers. It consists of four main steps: defining your assortment strategy, developing your assortment plan, executing your assortment plan, and evaluating your assortment performance. Each step requires different tools, data, and skills to achieve your merchandising objectives.

3 What are the challenges of using the assortment planning framework?

Despite its benefits, the assortment planning framework also poses some challenges for retailers. One of the main challenges is to collect, analyze, and integrate relevant data from various sources, such as customer feedback, sales history, market research, and supplier information. This can be time-consuming, complex, and costly. Another challenge is to balance the trade-offs between variety, depth, and breadth of your assortment. This can be difficult, as different customers may have different preferences, and different products may have different profitability and demand. A third challenge is to coordinate and communicate your assortment plan across your organization and your supply chain. This can be challenging, as different stakeholders may have different roles, responsibilities, and expectations.

5 What are some examples of using the assortment planning framework?

To illustrate how the assortment planning framework works in practice, here are some examples of how different retailers use it to achieve their merchandising goals. One example is Zara, a fast-fashion retailer that uses the assortment planning framework to offer a wide and fresh assortment of trendy products that appeal to its fashion-conscious customers. Zara defines its assortment strategy based on its brand image, customer feedback, and market trends. It develops its assortment plan based on its sales data, store location, and seasonality. It executes its assortment plan based on its agile supply chain, frequent deliveries, and flexible distribution. It evaluates its assortment performance based on its inventory turnover, sell-through rate, and customer satisfaction. Another example is Costco, a warehouse club retailer that uses the assortment planning framework to offer a narrow and deep assortment of high-quality products that offer value to its loyal customers. Costco defines its assortment strategy based on its membership model, customer trust, and competitive advantage. It develops its assortment plan based on its supplier relationships, bulk buying, and category management. It executes its assortment plan based on its efficient logistics, limited merchandising, and consistent layout. It evaluates its assortment performance based on its gross margin, renewal rate, and customer retention.

6 Here’s what else to consider

This is a space to share examples, stories, or insights that don’t fit into any of the previous sections. What else would you like to add?