In the world of microtrends, the aesthetic waves that appear almost overnight take over the digital conversation for a week or two, and then disappear. The trend is greatly influenced by social media, the effect of algorithms, and fast-paced consumer attitudes. Demand for a product that was previously expected to sell steadily for months might spike for only a few days and then level off before it even reaches the floor of the store.
The trend cycle is not the only thing that retailers no longer control. They frequently lack the agility and visibility necessary to keep up with it, which results in stocking products without knowing the actual demand and lost capital.
To create profitable inventory plans, retail and management professionals must have a solid assortment plan. Merchandising management software can help in this by creating product categories based on popular products and market trends. It helps to stock the right products at the right time and efficiently navigate the seasonal demand shifts and trends.
Why Traditional Assortment Planning Falls Short
A key component of successful retail is assortment planning, which is choosing the ideal combination of goods to satisfy expected consumer demand by category, price point, color, size, location, and budget.
Many businesses continue to use antiquated merchandise planning techniques that are cumbersome, hierarchical, and unduly reliant on data from the previous year. When assortment planning was based on dependable seasonal cycles, such a strategy might have been successful. However, in the fast-paced world of today, such rigidity becomes a liability.
A product that has appeal today may not count tomorrow. It is no longer possible to rely solely, or even mainly, on past performance records, annual estimates, or instinct. The pace, complexity, and unpredictability of the modern retail scene are too much for traditional merchandise planning techniques to handle.
The results of this are well-known. An overabundance of the wrong product, a shortage of the right one, discrepancies in channels, and a greater reliance on markdowns to eliminate unsaleables in inventory.
Importance of Retail Assortment Optimization for Seasonal Sales
A retailer's in-store merchandising management strategy heavily relies on assortment planning to increase profitability during the seasonal trends. In order to attain the most profitable possible conversion rate, it is imperative to create a solid assortment plan that will consider such things as customer trends, budget constraints, and seasonal variations.
As trends in customer behavior change rapidly, merchandise planning must be rapidly revamped to become more flexible and adaptable. This does not imply giving up on traditional retail methods. It entails improving them with predictive modeling and real-time data, which merchandising management software can provide.
The software can provide retailers with early indicators of new trends.
Companies can model several purchasing situations before investing in inventory.
It helps to determine the extent of a trend without going overboard.
Brands can continually modify assortments rather than only at predetermined times.
Modern merchandising management does more than keep a window on contemporary trends. It also models the behavior of those trends in various locales, distribution channels, and client groups.
The retailers will be able to make mid-cycle changes, such as moving inventories or delaying reorders, based on real-time indicators of demand such as sales velocity, social media references, or local patterns with regard to traffic. These features let teams move more quickly and without depending on guesswork by reducing the latency between trend emergence and retail response.
Retail assortment optimization with merchandising management software allows retailers to lower risk, act sooner, and change more quickly.
Retailers can better understand demand potential and trend volatility by using predictive forecasting tools in assortment design. This is especially important in trend-sensitive industries such as consumer electronics, apparel, accessories, and cosmetics. With predictive insights, merchandise planning teams will be able to more confidently determine what to stock and stock in what quantities, where, and for how long.
When companies use merchandising management software for retail assortment optimization, they can gain a number of benefits:
Increased Profitability
Increasing competitiveness is the main driving force for the adoption of assortment planning techniques. Merchandising management software helps to offer products relevant to seasonal trends, which not only keeps customers loyal, but also makes the business more well-known in its particular sector.
Reduced Stock Shortages
Learning which products often sell out and are not supplied quickly is one of the main benefits of using merchandising management software for assortment planning. It helps in identifying which products require a quicker replenishment. Maintaining adequate inventory and preventing protracted restocking cycles requires the establishment of systems to identify sales trends.
Decreased Outdated Stock
Merchandising management software also helps in deciding which products to stock in lower quantities. Obsolete inventory is a problem for businesses because it occupies warehouse space until it is liquidated through a considerable markdown, especially in trend-driven industries. Assortment optimization will assist in determining slow-moving items and modifiable ordering quantities.
Bottom Line
Assortment planning is one of the toughest and complicated components of category management. Retailers have to manage huge amounts of data, find unproductive items, and meet customer expectations of an appropriate product mix within assortments.
These problems are dealt with by assortment planning optimization utilizing merchandising management software. It combines sales and supply chain information to make recommendations for product deletions and listings that will improve product placement and inventory control inside retail locations.
With optimal merchandise planning, retail managers, buyers, and supply chain personnel may plan, coordinate, and refine their efforts to increase effectiveness and efficiency, enhancing their propensity to be flexible and responsive to market and consumer changes.
