Creating a winning product mix and depth in stores is one of the biggest challenges for the modern retailer. The rise of online shopping and the explosive growth of e-commerce have made it even more challenging for traditional retailers to keep up with dynamic demand in today’s complex omnichannel marketplace. To navigate these complexities effectively, retailers are increasingly turning to advanced merchandising software and comprehensive merchandising solutions.

The rise of e-commerce has been good for consumers in many ways, offering unparalleled convenience and choice. However, a significant portion of consumers still prefer to shop in physical stores, valuing the tactile experience, immediate gratification, and personalized service. This enduring preference means that retailers absolutely need to create a winning product mix and depth that resonates with their in-store customers. At the heart of any successful retail business lies effective assortment planning software. This refers to creating and managing a carefully curated product mix and depth in stores, ensuring that each location offers products that are precisely well-suited to its target customers and specific market environment. This intricate process is significantly enhanced by robust assortment planning software.

What is product mix and depth? 

A retailer’s product mix and depth can significantly impact consumer behavior and, consequently, sales and profitability. The “mix” refers to the broad types of products you carry – for instance, apparel, accessories, footwear, or home goods. “Depth,” on the other hand, refers to the number of Stock Keeping Units (SKUs) or individual items available within each specific product category. For example, within “women’s jeans,” depth would refer to the variety of styles (skinny, straight, bootcut), washes, sizes, and brands. Getting the mix and depth right is absolutely essential to ensuring that stores can meet diverse customer needs while also maintaining efficient inventory levels. This balance is a core objective of effective merchandise planning.

What is assortment planning in retail?

Assortment planning in retail is the strategic process of creating that optimal product mix and depth for stores. Some of the critical elements of successful retail assortment planning include meticulously maintaining inventory health, significantly reducing instances of frustrating out-of-stocks and costly stock-outs, and accurately identifying top-performing bestsellers. This crucial task relies heavily on data-driven insights provided by modern merchandising software and integrated merchandising solutions.

Retail assortment planning aims to have a product mix and assortment that meets customer expectations and demand. The ultimate aim of retail assortment planning is to construct a product mix and assortment that precisely meets anticipated customer expectations and demand, aligning seamlessly with the broader goals of merchandise financial planning. To achieve this ambitious goal, retailers critically need to leverage new-age merchandising tools and sophisticated assortment planning software. These advanced tools provide integrated inventory planning capabilities and allow for the instant generation of downloadable reports at multiple stakeholder levels, from store managers to executive leadership. This technological advancement creates a comprehensive, single repository of vital inventory data consolidated from all sales channels – be it physical stores, e-commerce platforms, or mobile apps. A complete, real-time view of their product offerings’ depth and mix at the individual store level empowers retailers to make far more informed and data-driven decisions, thereby optimizing inventory management and enhancing overall profitability. This holistic approach is a hallmark of truly effective retail inventory solutions.

New-age assortment planning software also plays a pivotal role by helping retailers utilize individual style analysis tools. These tools are invaluable for accurately identifying the bestsellers among their vast array of products, allowing them to focus their efforts and resources on maximizing sales for those high-performing items. With such sophisticated merchandise planning software solutions, retailers can rapidly analyze extensive historical data to determine the true potential of each style at the granular store level. More importantly, they can identify store-specific assortments that take into meticulous account the unique characteristics, demographic profiles, and purchasing behaviors of customers in each individual location. This level of customization is what differentiates a winning strategy from a generic one and is a core component of advanced retail merchandising solutions.

Conventional excel charts, with their inherent limitations due to cumbersome manual input processes and static nature, simply will not suffice in today’s thriving, fast-changing consumer trends and competitive landscape. The speed and scale required for effective merchandise financial planning demand dynamic, integrated systems.

The Many Advantages of Effective Assortment Planning in Retail

There are numerous, tangible advantages to implementing effective assortment planning in retail, all of which contribute significantly to a retailer’s bottom line and competitive edge. It fundamentally helps:

• Maximize sales and profitability by ensuring that stores are consistently stocked with the absolute right products in the precise right quantities. This direct link to profitability is a central tenet of merchandise financial planning
• Reduce inventory levels and associated carrying costs while simultaneously lowering costly out-of-stocks and frustrating stock-outs. This dual benefit is a direct result of smarter inventory management, a key feature of reliable retail inventory solutions
• Create a more seamless customer experience by ensuring that stores always have the products that customers are actively looking for, thereby building loyalty and repeat business. This customer-centric approach is enabled by granular insights from merchandising software
• Using data and analytics to understand customer needs and preferences better, assortment planning can help retailers stay ahead of shifting trends and respond quickly to new opportunities in the market.
• By diligently using data and advanced analytics to understand evolving customer needs and preferences better, assortment planning can help retailers stay proactively ahead of shifting trends and respond quickly and decisively to new opportunities emerging in the market. This forward-looking capability is a cornerstone of strategic merchandise planning.
• The right retail product assortment solution actively optimizes your product assortment planning, enabling retailers to maintain excellent inventory health by tracking inventory levels on an ongoing, real-time basis. It excels at identifying any products that may be at immediate risk of stock-outs, allowing for timely intervention. This allows for better, data-driven decision-making about which products to keep prominently in-store and online, and critically, how to dynamically adjust the mix and depth of products to precisely meet fluctuating customer demand. This dynamic adjustment capability is a hallmark of sophisticated merchandising solutions.

The retail product assortment solution optimizes your product assortment planning enabling retailers to maintain good inventory health by tracking inventory levels on an ongoing basis and identifying any products that may be at risk of stock-outs. This allows for better decision-making about which products to keep in-store and online and how to adjust the mix and depth of products to meet customer demand.

The Strategic Imperative: Integrating Assortment with Merchandise Financial Planning

The true power of assortment planning is unleashed when it is deeply integrated with merchandise financial planning. Merchandise financial planning provides the overarching financial framework and targets within which assortment decisions must operate. It involves setting financial goals for sales, gross margin, inventory levels, and markdowns. Effective merchandise financial planning ensures that the planned product mix and depth will contribute positively to these financial objectives. Without a strong merchandise financial planning component, assortment decisions can be made in a vacuum, potentially leading to overspending on inventory or failing to meet profit targets. This is why merchandise planning software is crucial, as it integrates these two vital areas

Merchandise financial planning typically starts at a high level (e.g., company-wide or by major division) and then trickles down to more granular levels, like category, department, and even individual store clusters. This top-down, bottom-up approach in merchandise financial planning allows for flexibility while maintaining strategic alignment. Retailers use merchandise financial planning to create open-to-buy plans, which dictate how much inventory can be purchased over a given period to meet sales forecasts while adhering to budget constraints. This direct link between merchandise financial planning and purchasing is critical for maintaining inventory health and is a core function of comprehensive retail merchandising solutions

Furthermore, merchandise financial planning helps in scenario planning. What if sales forecasts are too optimistic? What if a trend unexpectedly falters? Merchandise financial planning allows retailers to model these scenarios and prepare contingency plans, which then directly inform assortment adjustments. This forward-looking aspect of merchandise financial planning minimizes risk. The most effective merchandising solutions provide robust tools for this kind of financial modeling.



Finally,  it is essential to have an assortment planning software to review and update your assortment plans regularly. This may involve regularly reviewing sales and inventory data, conducting insightful customer surveys, and organizing focus groups to stay on top of evolving trends and preferences. This continuous feedback loop is vital for successful merchandise planning. With the right assortment planning software and strategic approach, you can create a winning product mix and depth in your retail stores that will help you drive sales, enhance profitability, and boost customer satisfaction. By intelligently using new-age merchandising tools, retailers can gain a comprehensive, real-time view of their inventory, accurately identify bestsellers, and proactively prevent costly stock-outs. This enables them to create a dynamic, winning product mix and depth that truly keeps customers coming back for more, solidifying their position as a preferred shopping destination. This holistic approach, powered by advanced retail inventory solutions, is the future of profitable retail.