assortimentplanning

Assortment planning is the process of deciding which products to offer, in what quantities, and in what mix, to meet customer demand while optimizing sales and profitability. It aims to balance breadth (the number of product categories) and depth (the number of variants within a category) and to align product choices with space, supplier capabilities, seasonality, and the retailer’s strategy. The approach is commonly embedded in category management, bringing together merchandising, marketing, supply chain, and store operations.

Key elements include understanding customer needs and market trends, analyzing historical sales data and seasonality, and assessing constraints such as shelf space, budgets, and lead times. The planning process typically involves generating alternative assortments, evaluating them using metrics such as sell-through, gross margin return on investment (GMROI), stock-out risk, and fill rate, and selecting a final assortment. Implementation covers supplier contracts, pricing, and in-store or online presentation, followed by monitoring and adjustments based on performance and changes in demand.

Levels of planning range from macro-level assortment strategies for the entire business to category-specific and store- or channel-specific adaptations, including online and offline differences and promotional periods. Tools used in assortment planning include data analytics, ABC analysis, clustering, and specialized assortment optimization software.

Outcomes of effective assortment planning include improved product relevance for customers, higher inventory turnover, and fewer markdowns. Challenges can involve data quality, forecast accuracy, space constraints, supplier reliability, and balancing competing goals such as turnover versus margin. When aligned with the broader merchandising and supply chain strategy, assortment planning supports sustainable profitability and customer satisfaction.