Assortment Planning Strategies

Mastering Assortment Strategy in Retail: 8-Step Approach to Customer Delight The secret to retail success?  It's not just about having products, it's about having the right products for the right customers at the right price.  This is where a robust assortment strategy comes into play. Trying to summarize the assortment strategy through my 20+ years of retail and e-com experience. We will dive deep into how a retailer should tailor assortment to meet the needs of diverse customer cohorts.  This goes beyond simple demographics! 1. KYC (know your customer) - Customer Segmentation (Cohorts) : It can never be a one-size-fits-all strategy.  Analyse data to segment customers based on location (metro vs. tier 2/3 towns), demographics (age, gender, region), lifestyle (high-rise dwellers vs. independent houses), and even pincode-level analysis for e-commerce to deliver personalized experiences. 2. Value for Money (VFM):  Pricing is king! leverage EDLP (Every Day Low Prices), large pack savings, and strategic entry-level priced assortment (think 49/-, 99/- deals) to deliver exceptional value. 3. Seasonality & Festivals:  India's vibrant festivals and seasons are key drivers of demand.  Proactively plan relevant assortment well in advance, ensuring customers find exactly what they need when they need it – building trust and loyalty. 4. Brand Strategy:  A balanced portfolio is crucial.  Strategically incorporate national, challenger, and regional brands to offer diverse choices.  Regional brands, often offering incredible VFM, make an instant connection with the customers. 5. Private Label (PL) Power: In categories where branding is less crucial, private label products offer significant value, driving strong customer stickiness.  This is particularly evident in staples like pulses and dry fruits. 6. Evolving Trends:  The world of retail is constantly changing. monitor emerging trends, innovations & global selection through social media, market research, and supplier insights, ensure to include the latest and most sought-after products into assortment.  Be agile and adapt quickly! 7. Supply Chain Efficiency: Assortment strategy cant be just about marketing; it's about operational efficiency also. Carefully consider supply chain costs, warehousing, and logistics to ensure products are readily available. Availability is the Key 8. Continuous Improvement: Assortment planning is an ongoing process.  conduct quarterly reviews, analyzing velocity, profitability, and emerging trends to continuously optimize offerings.  Consider "assortment modules" for faster scaling and roll-out. This 8 step comprehensive approach will allow to offer a tailored shopping experience that truly resonates with diverse customer base. What are your key strategies for optimizing assortment? Share your insights in the comments! #retail #assortmentstrategy #supplychain #FMCG #ecommerce #merchandising #categorymanagement #omnichannel #indiaretail #valueformoney #privatelabel

Depth vs. Breadth in Apparel Retail :– Getting the Balance Right One of the most important decisions in merchandising is whether to go deep or broad with your assortment. Both approaches have their place and the right balance can make or break your retail strategy. What is Depth? -Depth means you carry more pieces per style. For example, if you launch a black polo shirt and buy 2,000 units of it, that’s depth. Pros: Lower design and development costs, better volume discounts, easier to manage supply chain. Cons: High risk of overstock if the style does not perform. What is Breadth? -Breadth means you carry more styles but fewer pieces per style. For example, instead of buying 2,000 black polos, you may launch 200 units each of 10 polo variations (different colors, fabrics, fits). Pros: More choices for customers, higher chance of meeting varied tastes, reduces risk of one style failing. Cons: Higher complexity in planning and replenishment, smaller volume per style means weaker price negotiations with suppliers. How do retailers decide? It depends on the business model, category and consumer behavior. -Fast Fashion (e.g., Zara, H&M): They lean more on breadth because their customers want freshness and variety. -Basics Retailers (e.g., Uniqlo, Hanes): They lean on depth because their customers want consistency and trust in core products. Example: Let’s say you run a tshirt line with a budget of $100,000. -If you choose depth, you may buy 20,000 units of one hero style at $5 each and sell at $15, betting big on volume. -If you choose breadth, you may buy 2,000 units each of 10 styles, also at $5 each, giving your customers more options. The Smart Play: -Most successful retailers strike a hybrid balance. -Go deep on your proven winners (black pants, white shirts, basic jeans) while going broad on fashion forward or seasonal items to capture trends. Key Takeaway: -Depth builds efficiency. -Breadth builds excitement. Apparel retailers need both, but in the right proportion for their brand DNA and target customer.

Assortment Planning in Footwear Retail: (A Simple Framework That Actually Works 👟) Footwear retail looks glamorous from outside… but on the inside, one wrong size curve can send half your inventory straight into “50% off” mode. Here’s a distilled version of the assortment planning framework used by leading retailers worldwid 1️⃣ The 4D Cycle: The Backbone of Smart Buying Here’s the simplest way to understand it: Deconstruct: Look at your past performance honestly. What sold? What died? Which sizes broke? Which stores overperformed? This is your “truth check.” Diagnose: Find the real gaps. Wrong size depth? Too many tail SKUs? Weak price ladder? This is where problems become visible. Develop: Build the new range. Decide options, depth, size curves, price points, and store clusters. This is where the season actually takes shape. Deliver: Allocate, replenish, monitor, course-correct. Broken sizes? Move fast. OTB slipping? Fix it. This is where execution meets planning. This 4D cycle is used widely across global retailers (McKinsey, NRF, Bain) — because it simply works. 2️⃣ Size Curve: The Real Profit Maker Industry benchmarks (USRA & FDRA 2024): Women typically peak at 37–39 Men peak at 41–43 But your own 26-week data > any global curve. Because broken sizes = broken sales. 3️⃣ Option vs Depth: Balance or Bleed Insights from Bain’s SKU Productivity Report: Fashion: more options, lighter depth Core: fewer options, deeper units Seasonal: tight buys, short lifecycles Too wide = clutter Too deep = markdown festival Find the middle. 4️⃣ Cluster Stores Properly Tourist stores behave like impulse buyers. Residential stores behave like value shoppers. Outlet stores behave like detectives. (Deloitte GCC Footfall Study 2024) Match the assortment to the customer—not the building. 5️⃣ Broken Size Index: Your Weekly Truth Teller Retail benchmarks: 0–15% Healthy 16–30% Risk zone 31%+ Action now If you’re not reviewing this weekly, you’re leaving easy money on the table. 6️⃣ Newness vs Repeat: Keep It Moving Harvard Retail Study 2022 recommends: 25–35% newness to keep floors fresh 65–75% core to drive margin Newness brings footfall. Repeat winners pay the rent. 7️⃣ Seasonal Calendar = Zero Surprises Ramadan → Summer → BTS → Singles Day → Super Sale → Festive The retailers who win are the ones who prepare before the season, not during it. 8️⃣ KPIs That Actually Matter From NRF Retail Excellence 2024: Weekly ROS/ SKU Sell-through Size efficiency Weeks of cover Top 200 SKU contribution Markdown cost OTB discipline Review these weekly. Review them honestly. Final Thought Assortment planning is not magic. It’s structure, data, and a bit of instinct. When done right, it reduces firefighting, increases margins, and makes your stores look sharp even on a busy Saturday. 👟📈 Smarter assortments = stronger retail.

Most value retailers tend to focus on width of assortment (variety) to attract footfall, but don't double down on the top 20% SKUs that actually drive 80% of the sales — the classic Pareto principle. Here’s why this happens — and what can be done about it: Why value retailers overlook the 20/80 logic: Fear of missing out (FOMO) on customer choice — they want to offer something for everyone. Old-school buying practices — often driven by intuition or vendor influence rather than data. Planogram pressure — store shelves are filled to look “full,” not “smart.” Fragmented inventory systems — no clear visibility into what's actually selling. Focus on margins — many low-selling items have higher margins, so they're kept despite slow movement. Why this is a problem: Dead inventory blocks capital and space. High carrying costs with little return. Replenishment delays on top-sellers, leading to lost sales. Customer dissatisfaction due to stockouts on high-demand SKUs. What smart value retailers should do: Deep-dive SKU analytics — identify the real 20% driving the business. Trim the tail — reduce or eliminate the slow-movers. Double down on winners — ensure 100% availability of the fast-movers. Localized assortments — tailor the 20% top SKUs to each store’s catchment. Smart planograms — blend visual appeal with sales logic. here's a practical framework and dashboard idea to help value retailers track and act on the 20/80 sales logic at the store level: SMART SKU PERFORMANCE DASHBOARD (Focus: Maximizing Sales from High-performing SKUs) 1. Core Metrics Section Metric Description Total SKUs Total number of SKUs in the store Top 20% SKUs No. of SKUs contributing to 80% of sales Sales Contribution (%) % of total sales from Top 20% SKUs Stock Availability % availability of top-performing SKUs Dead Stock Ratio % of SKUs with <1 sale/month 2. ABC SKU Classification Category Definition Action Plan A (Top 20%) SKUs contributing 80% of revenue Always in-stock, replenish frequently B (Next 30%) SKUs contributing 15% of revenue Monitor, test promotions, trim if needed C (Bottom 50%) SKUs contributing 5% of revenue Review weekly, markdown, phase out 3. Store-Level SKU Heatmap (Visual Dashboard) Color-coded SKU performance (Green = Top Performer, Yellow = Moderate, Red = Low Performer) SKU-wise: Sales last 30 days Inventory aging Replenishment status Suggested Action (Retain, Review, Remove) 4. Action Triggers Trigger Suggested Action SKU not sold in 30 days Review for phase-out Fast-mover OOS > 2 days Expedite replenishment High-selling SKU below min. stock Raise auto reorder Excess inventory with low sales Trigger promotion/markdown 5. Reports You Need Weekly Top 50 SKUs by Sales Volume SKUs with 0 Sales but Positive Inventory SKUs Near Expiry / Aging > 90 days Stores with Highest OOS on A Category SKUs

📦 SKU Proliferation **More options ≠ more sales.** As Category Managers, we’ve all felt the pressure to expand assortments—more flavors, colors, sizes. But this pursuit of choice often backfires: 🎯 Demand gets diluted across too many products 📉 Forecasting accuracy drops 🏭 Production complexity increases 🛑 Higher chances of stockouts AND overstocks 💸 Inventory holding costs shoot up ⚠️ The Reality Check: Imagine scaling from **3 chopping boards to 12**. Suddenly: • 12x forecasts • 12x shelf spaces • 12x packaging/logistics setups …while 80% of sales come from just 2 core SKUs. Result: Excess inventory, wasted capital, confused shoppers. 🚀 The Fix? **Strategic SKU Rationalization:** ✔️ Ruthlessly cut low performers (ABC analysis is key) ✔️ Collaborate with Supply Chain & Sales teams ✔️ Empower store feedback—they know what sells ✔️ Optimize shelf space for clarity, not clutter ✔️ Focus on *quality* of assortment, not quantity #### 📌 Remember: **Winning supply chains aren’t defined by SKU count—but by knowing what *not* to carry.** #CategoryManagement #SKURationalization #RetailStrategy #SupplyChainOptimization #InventoryManagement

Selling to U.S. Retailers? Understanding Store Segmentation Is Critical 🇺🇸🛒 For international manufacturers entering the U.S. market, here’s what often comes as a surprise 👉🏼your American retail partners don’t operate the same way across all their stores. Store segmentation means the same retailer will stock different products, brands, and SKUs depending on location—and this fundamentally changes your U.S. approach. 🔑 The U.S. Retail Reality 📊 American retailers segment stores based on demographics, geography, income levels, and local preferences. 🛍️ A Target in affluent suburban Connecticut carries different products than one in rural Texas. 🛒 A Safeway in a Hispanic LA neighborhood has a completely different assortment than one in Asian areas of San Francisco. This isn’t the exception—it’s standard for major U.S. retailers. ✅ What This Means for Manufacturers ⚠️ Your product won’t automatically go to all locations, even if a retailer agrees to carry it. Retailers make SKU-level decisions based on store segments: • Premium products may only go to affluent-area stores 💎 • Certain flavors assigned to specific demographic segments 🌶️ • Package sizes vary by urban/suburban/rural locations 📦 • Pricing strategies differ across store segments 💰 Real-World Implications 🌍 Volume expectations: Getting a “yes” from Walmart doesn’t mean nationwide distribution. Your initial placement might be limited to specific store segments for testing. Product development: Consider creating different SKU assortments for different U.S. segments rather than one universal product line. Marketing support: Retailers expect manufacturers to understand their segmentation strategy and provide targeted marketing materials for different store types. Supply chain complexity: You’ll need distribution capabilities that can handle varied order patterns across segments, not uniform shipments to all locations. How to Adapt Your Strategy 🧭 🔍 Understand how your target retailers segment their stores and which segments align best with your products. 👩🏻🎨Design your product portfolio with segmentation in mind. Offer retailers options they can deploy strategically across their store base. 📍Success in the U.S. often means customizing products for regional tastes, whether that’s flavors, package sizes, or formulations. 🤝Work closely with category managers who understand segmentation and can champion your products for the right store segments. The Opportunity 🚀 While store segmentation adds complexity, it creates opportunity. Manufacturers who embrace this reality can position products strategically and build sustainable growth across America’s diverse markets. The U.S. market isn’t one opportunity—it’s many. Store segmentation is how retailers navigate complexity, and understanding it is how you win. 🏆 #Manufacturing #USMarketEntry #CPG #RetailStrategy #InternationalBusiness #StoreSegmentation #SupplyChain HRS Global LLC

Last week, I spoke with a VP of Merchandising from a large brand. They shared their struggle with increasing average transaction value 💰 Their strategy: Daily sales report analysis to craft promotions and bundles. The goal? Boost transaction value. The result: Smaller purchases, no significant progress 😮 My advice: Dive deeper. Beyond conventional tactics, explore seasonal patterns, basket analysis. Differentiate. Here's the reality 👇 - 2023 has shifted consumer spending habits - Overused discounts are losing impact - Traditional strategies are outdated - Promotions matter, but they're not the complete answer It's time for a new playbook in fashion retail 📕 1. Get Smart with Stock: Look at what sells best in combinations with other articles. Ensure your stores carry these gems in sizes that combine well with other assortment. This way, you are not just selling single items, you are increasing overall transaction value. 2. Match Winners with Demand: Focus on the combos and sizes people love the most. Plan these assortment mixes according to the stores’ demand. Your goal is to have these ready and waiting in the stores that need them. 3. Fill the Gaps Creatively: If some stores are missing combos, get creative. Introduce combinations that not only fill the space but also make you more money where there's a real want for them. We're talking high-margin, demand-driven combinations. Pro Tip When customers can't find what they're looking for within their budget, let's turn that moment into an opportunity. Offer them an exclusive, one-time discount on a higher-priced combo. This strategy not only moves our overstocked, high-margin items but also keeps our profit margin healthy. It's a win-win: customers feel valued with a deal just for them, and we increase the sale's value. Manual methods can't keep pace with today's demands, but the right technology can transform challenges into opportunities. Leverage data, automation, and customer insights for a real change.

Fewer products. Better products. That’s how you build a stronger, more profitable brand. As you know - the industry is struggling. Many brands are doing really badly right now - losing sales, losing customers, losing factories, losing trust. So a lot of brands that we talk to think the solution to GROWTH is to add more stuff. More styles. More colors. More options. More drops. More products “just to be safe.” NOOOOO!!! That’s totally the wrong strategy. What you need is to nail your priorities and FOCUS. You AND your customers need CLARIY! - Clarity to understand why they need to pick you over others - Clarity to understand your offer. - Clarity to “get” your products and clearly understand which outfit and products they should buy from you. That’s why the actual assortment logic is crazy important right now. In a tighter saturated market, with slow growth and maximum pressure on margins, weak collections are exposed really really fast. You can’t just keep piling on products and hope volume will save you. - You need fewer products. - Better products. - Products with a clear role in the collection. - Products that deserve to be there and have a strong unique selling point. - Products that either drive the business now or help build where the business needs to go next. - Not nonsense stuff. - Not dupes that you saw your competitor drop last year and now you have it too. - Not ten versions of the same average idea. (like a brand we talked to a couple of years ago - they offered 142 products, not SKUs, in the section “black tights”. If you want to turn your revenue around - you’ll not gonna do that with the biggest collection, but with the CLEAREST one. Where you edit and drop. Keep what is carrying the business. Change what’s blocking the growth. And look at openings that needs investment and innovation, even if it is not the “safest” choice in the room. That is exactly why we run our Collection Clarity Workshop. A 1-3 day workshop (depending on collection/team size). We help brands look at the range properly - what is strong, what is weak, what is driving the business, what is holding it back, what belongs, what needs to go, and where the real opportunities are. So the collection gets clearer. The decisions get sharper. And the brand stops wasting time and money on products that should not be there in the first place. More clarity for the internal team and your customers. And eventually more profit. The smarter way to build a collection. DM me for more info and to book your workshop

Michael Bender steps into the Kohl's CEO role at a moment where the mechanics matter. Inventory has been reduced. Receipts are lower. Clearance is being moderated. Margin has improved. Comparable sales remain under pressure across much of the business. That shifts the burden to merchandising and store execution. When a promotional department store tightens receipts, the work is not simply reducing SKUs. It's deciding which SKUs come out without weakening traffic-driving density. In categories like women’s, home, gifting, and impulse, perceived abundance still shapes value perception. Editing requires precision at the department and subcategory level, not broad cuts. The merchant function therefore has to manage: • SKU rationalization that preserves visual density in high-traffic zones • Private brand elevation without disrupting promotional cadence • Allocation models built around revised depth assumptions rather than legacy volume assumptions • Receipt planning that protects key size curves and replenishment speed If allocation continues to push product based on outdated floor assumptions, customers feel inconsistency immediately. Store operations carry the parallel execution test. Lower receipts should result in cleaner adjacencies and faster floor turns. That requires: • Presentation standards tied directly to revised assortment depth • Back room to rack flow that reduces linger time • Field leadership capable of enforcing layout discipline consistently across more than 1,100 locations • Shrink controls that protect inventory without interrupting customer flow If edited inventory still looks congested, or edited departments look underpowered, the issue is coordination between buying, planning, allocation, and field execution. In this phase, the success profile narrows. Merchandising leadership must operate inside competing pressures at the same time. Protect margin while protecting momentum. Reduce receipts while sustaining perceived value. Simplify the floor without flattening energy. Store leadership must translate that thesis into repeatable standards that show up physically, not just in dashboards. The layer beneath them matters just as much. Planning assumptions, allocation rules, and district-level enforcement either reinforce the operating logic or quietly undermine it. In constrained retail environments, progress depends on coherence between what is bought, how it is allocated, and how it is presented to the customer. Defining that coherence clearly, and ensuring the bench is built to execute it, determines whether discipline translates into clarity and renewed demand.

“𝙂𝙚𝙩𝙩𝙞𝙣𝙜 𝙖 𝙥𝙧𝙤𝙙𝙪𝙘𝙩 𝙤𝙣 𝙖 𝙨𝙝𝙚𝙡𝙛 𝙞𝙨 𝙜𝙧𝙚𝙖𝙩. 𝙂𝙚𝙩𝙩𝙞𝙣𝙜 𝙞𝙩 𝙢𝙤𝙫𝙞𝙣𝙜 𝙞𝙨 𝙖𝙣𝙤𝙩𝙝𝙚𝙧.”   ~John Maly John is someone I consider one of my greatest mentors in the beauty industry, and I LOVE this quote.  Shelf space is a milestone. Velocity is the business!  The PO isn’t the win, it’s simply the start. The real test is sell-through. Too many brands are focused on what they sell TO a distributor, but never look at how the brand/sku/promo is performing. Some tips: ➡️ 𝗛𝗲𝗿𝗼-𝗳𝗶𝗿𝘀𝘁 𝗮𝘀𝘀𝗼𝗿𝘁𝗺𝗲𝗻𝘁 & 𝗼𝗽𝗲𝗻𝗶𝗻𝗴 𝗼𝗿𝗱𝗲𝗿𝘀. Don’t flood the DC. Curate hero SKUs + good/better/best bundles and a backbar-to-retail regimen. Provide opening order templates, and shipping rules so reorders are easy. Selling in sku's that don't move does nobody any good! ➡️ 𝗪𝗶𝗻 𝘁𝗵𝗲 𝗹𝗶𝗻𝗲 𝗿𝗲𝘃𝗶𝗲𝘄 𝘄𝗶𝘁𝗵 𝗲𝗰𝗼𝗻𝗼𝗺𝗶𝗰𝘀 𝗮𝗻𝗱 𝗴𝘂𝗮𝗿𝗱𝗿𝗮𝗶𝗹𝘀. Clean price ladder, MAP policy, promo guardrails, margin math the buyer can defend, and a 90-day launch calendar. ➡️ 𝗣𝗶𝗹𝗼𝘁 𝗳𝗶𝗿𝘀𝘁, 𝘁𝗵𝗲𝗻 𝘀𝗰𝗮𝗹𝗲. 8–12 week regional pilot with hard KPIs such as: ✅ ROS (units/SKU/door/week) ✅ Reorder ≥50% of doors by weeks 6–8 ✅ Training coverage ≥80% of DSC's and stylists ✅ OTIF ≥95% into the DC Only expand when the numbers say “go.” ✅ Train-the-trainer that actually sticks. Certify distributor reps and educators with micro-modules. Make certification the gate to launch spiffs. ✅ MDF that earns 2x. Co-fund education events, sampling, and content tied to local doors, not random discounts. ✅ Salon merch that answers questions. Planograms, shelf talkers with one bold benefit + “how to,” and minis/GWPs. ✅ Operational basics that aren’t basic. Rolling 13-week forecast, launch wave planning, EDI-ready, compliance packs/UPCs/SDS. ✅ Data, dashboards, and QBRs. Weekly report: sell-through by SKU/region, inventory health, promo lift, training coverage. Quarterly JBP/QBR with actions, not vanity graphs. ✅ Governance that protects everyone. MAP monitoring and marketplace takedowns, differentiated assortments by channel, and clear returns/defect policies. Protect the brand, protect the distributor’s margin, protect the salon’s trust. ➡️ S𝗵𝗮𝗿𝗲 𝗮 𝘀𝗰𝗼𝗿𝗲𝗰𝗮𝗿𝗱 𝘄𝗶𝘁𝗵 𝘁𝗵𝗲 𝗱𝗶𝘀𝘁𝗿𝗶𝗯𝘂𝘁𝗼𝗿 𝘁𝗵𝗮𝘁 𝗶𝗻𝗰𝗹𝘂𝗱𝗲𝘀: ✅ Sell-in vs. sell-through, ROS, reorder %, training coverage, promo/MDF ROI, OTIF, forecast accuracy, and returns/defects. ✅ Shelf space is a milestone. Movement is the business. Celebrate the PO, then go earn the reorder together. If you’re a distributor serving salons and want a pilot with real gates and shared dashboards, let’s talk. What’s the most underrated tactic you’ve used to turn product on a shelf to movement?  I’ll start: The most underrated tactic I use with distributors is converting a retail SKU into a 5-minute signature add-on at the bowl, with easy verbiage the stylist can use at the bowl and station! Your turn. 🫵 🤔