What is Assortment Planning in Retail? 9 Ways to Optimize

Assortment planning is complicated. But it’s easier to understand when you look at the bigger picture, especially in the context of another planning activity, merchandise planning.

Retailers create a merchandise plan to set a budget for seasonal merchandise, the total selection for all channels. The merchandise plan works at the level of product categories—for example, women’s tops—without drilling down into the products themselves.

But fashion retailers don’t sell categories; they sell products and styles. And this is where smart retailers can gain a competitive edge. Mindful of the budget and data analysis (mostly involving current and historical sales information), they plan the fashion assortments for each store and channel.

A fashion chain will scour the wholesale market to find the best product styles for categories such as women’s tops. Long-sleeve blouses surely will be in the product mix, offered in styles such as button-down, scoop neck, and pullover. Shortly before a season kicks off, the retailer sends each store its allotment of blouses and other products in a range of sizes and colors. Naturally, higher-performing stores get more of the assortment.

Not every fashion retailer follows the same process, but the most successful ones start with a merchandise plan that guides the assortment plan. The assortments are where the higher-level plan comes to life on delivery trucks, store shelves, and bulging shopping bags.

See how Oracle solutions help fashion retailers plan assortments with ease.