AssortmentManagement

Assortment management is the process by which a retailer determines the mix of products to offer across stores and channels. It aims to balance breadth and depth, align with consumer demand, supplier capabilities, space constraints, and profitability. The goal is to maximize sales and margin while minimizing stockouts and excess inventory.

Key activities include defining an assortment strategy for categories, segmenting the customer base, selecting SKUs, rationalizing underperforming items, planning space allocation, and coordinating with suppliers. Store-level and channel-level differences are considered, with clustering of stores by demand patterns and constraints.

Methods commonly rely on data and analytics. Historical sales data, trends, promotions, and market research feed demand forecasting and scenario analysis. Optimization tools can suggest SKU sets and allocation across stores. The process is iterative, with pilots and rollouts, and involves governance with category management, merchandising, and supply chain functions.

Metrics used to assess success include sell-through, gross margin return on investment, stock-out rate, assortment coverage, planogram adherence, and revenue per square foot. Effective assortment management requires cross-functional collaboration and clear governance to manage changes, vendor relationships, and allocation decisions.

In practice, assortment management supports both physical retail and e-commerce, enabling a coherent product strategy across channels. It is closely linked to category management, inventory management, and demand forecasting, and has become increasingly data-driven in omnichannel environments.