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•Guest Column: Assortment Planning: The Science Inside The Retail Store

By Wayne Usie, Senior Vice President, Retail, JDA Software Group, Inc.

The pressure's on. Constantly expanding product choices, multiple selling channels and escalating consumer expectations pose daunting challenges to retailers' ability to efficiently build profitable consumer-centric product assortments. In today's dynamic merchandising environment, the commonly utilized hierarchical and territorial buying strategies often prove more burdensome than effective when it comes to offering savvy consumers the optimal combination of brands, colors, styles and sizes. To maximize profitability, a growing number of retailers recognize they must knowledgeably integrate the traditional art of buying with the innovative science of product selection. Aligning the art and the science means that assortment decisions now have to be made in a harmonious, organizationally consistent manner. Meaning that disparate spreadsheet supported processes must be examined, with only the most useful parts being blended into updated software applications.

A fundamental shift in consumer decision-making has dramatically influenced buying patterns. With the ability to research and purchase a virtually unlimited selection of products via the Internet, consumers are no longer content to simply choose from a given selection in a particular store. At the same time, evolving local needs and nonintuitive preferences also make it more difficult for retailers to satisfy customer requirements. For example, it may not seem logical to stock summer footwear in a Snow Belt shoe store – unless a large percentage of customers take warm weather vacations. Or, a desert climate might not automatically be considered a prime source of ski equipment sales – except for the popularity of numerous ski resorts within easy driving distance.

The first challenge for retailers is to identify consumer preferences as accurately as possible. This can be done by capturing decision-making data from a variety of resources, ranging from historical in-store product performance to the newest social networking options. Retailers can then utilize these insights to create differentiated, customer appropriate and profitable assortments – which in turn require a fundamental shift in assortment planning strategies.

Click Here To Download:
•Guest Column: Assortment Planning: The Science Inside The Retail Store