What is assortment planning?

Assortment planning entails evaluating customer demand, sales data, and market trends to select the best products that are most likely to sell at high rates. This consists of selecting the ideal combination of products, colors, and sizes to put on offer in specific store locations, and then identifying the right amount of product to stock.

Assortment planning also indicates which products should only be sold at certain store locations or specific channels, and which products should be offered at all store locations or channels. This lets retailers differentiate their product offerings and helps to provide customers with a unique shopping experience, whether in a store or online.

Some of the factors that go into the decision-making in assortment planning include:

• Customer needs and preferences

• Product costs

• Inventory levels

• Available shelf space

To help balance all of these constantly changing variables, retailers often employ the use of software programs and analytical tools. These are used to automate assortment planning activities and make decisions that are based on hard data. Assortment planning is critical for retail companies because it can have a significant impact on sales volume and profits.