The Assortment Plan Framework
Once I’ve finished my financial planning, I know I need to bring in x thousand pounds of stock for a certain period of time, but I need to know how many lines I need to buy, what quantity I should buy of each, which shops need the most lines. As we know, all stores in a chain can’t possibly need all lines. They’re different sizes, they take different levels of sales, they may have different customer profiles. I need to be able to give clear direction to the buyer.
There must be a logical way of getting myself a nice shopping list. Of course there is. Planning an Assortment provides you with a clear direction as to how to break up the spend to give each and every store a meaningful range, which supports their sales, fits in their space and works to their strengths.
It’s not rocket science. Grading stores/ channels lets you group like selling channels together, then you can create an option plan to tell you how many options stores in each grade need and what quantity, on average, of an option. This becomes my assortment plan, a framework I can build the range against. The framework is going to keep me on the straight and narrow. It’s so easy to over option, although under optioning isn’t unheard of! At least now, if I deviate, I can see what I’m doing and I know why. If I’m finding it difficult to stick to the option plan, does it mean my plan is too low and I should cut down in another area? I now have a context to make those kinds of decisions.
Let’s talk Grading. It’s important I get my store groupings right. I want as few exceptions as possible. Most people think about grading to sales but that’s not the be all and end all, I might need to consider space as well, or I might want to consider the type of customers I get in different towns. Are my stores in market towns where I get great customer flow on market day but it’s not so great the rest of the week? In those stores I won’t need as much depth as I have the same customers coming in all the time – great they’re loyal, but I won’t sell them the same style twice. Are some of my stores in larger malls, with lots of footfall, where I can sell more volume of an option?
There are many ways to grade, use the most appropriate for your business. If space is important, don’t necessarily try to break down the stores to exact linear. The more granular the information we grade on, actually the less likely it may be flawed and, if I’m setting a grading for a planning season, the space is going to fluctuate over time. Consider generic size groupings, an extra large, large, medium, small split is giving you delineation. Don’t go wild on the groupings! The more grades there are, the more work to do. Think carefully about how many grades are manageable and how many you can actually create different ranges for. It’s the extremes, which are going to force a higher number of grades.
Once the grades are in place, you can create the all-important option plan. Option planning based on a linear is great for fixed footage products, but there are other methods too. Again, it’s about understanding your business and what’s the most appropriate for it. You can break the planned intake down to a number of required options to meet the that plan or use sales to establish how many options you need to range to fulfil that plan.
Once you’ve set a clear process, everyone has a clearly defined direction. Why sample 20 options when my range plan says I need 5? It’s not only stores which will benefit from a considered planned number of options. If completed early enough, it gives focus for the whole buying cycle. And hey, you’re bound to deviate from the plan, but that’s what it is, a plan, a framework. We don’t need to stick to the letter. After all, we’re commercial buyers and merchandisers at the end of the day! But we need a start point and that’s why the Assortment Plan is important.
About Roz Greaves
For over 20 years Roz has worked at Merchandise Head / Controller across many different retailers she now uses that deep retail expertise to assist in her current role as Senior planning consultant at Island Pacific, where she has worked for over 9 years working with many retail global brands consulting and implementing the Island Pacific SmartPlanning suite such as Superdry, All Saints Altar’d State, Dune Group and Primark. Roz brings both practical application retail acumen to any project she is involved in.
Find out more about the key benefits of Island Pacific Assortment Manager, our dedicated module for Assortment Planning.