Every business has one goal: to optimise sales and maximise profit. There are several tactics to increase profitability, but one of the more essentials is assortment planning.
Assortment planning is carefully selecting products and placing them in a specific area of the store, at a particular period. The purpose is to drive the most sales. This is done by anticipating demand and understanding the ways to manage that demand. It is in your best interest to take this into serious consideration. A study by First Insight has shown that the percentage for consumers spending more than $50 or more, is higher in shoppers that shopped in-store (71 percent) compared to shoppers that bought their purchases online (54 percent).
Well, you’re in luck because we’ve compiled the tips for assortment planning success!
Utilise your data
Data is imperative to your business. The data collected will make it easy to keep track of inventory, anticipate and determine benchmarks and growth trends. The data will allow you to set a realistic goal for the next period, weekly, monthly, quarterly or yearly.
With the data collected, it will be easier to analyse the successes of other stores. You can emulate the techniques they’ve implemented, into your own business.
You may want to store this data into your POS data for better organisation and accessibility. A particular system you may want to look into is the EPOS Point of Sale (POS) System. This POS software is handy in the sense that it will track your inventory for you and give you access to the data of the products and goods that have been received well by the consumers, and vice versa. You will not need to fuss over making your decision, as EPOS will also calculate the number of products you need for the next order according to the data it has calculated. In the world of sales and numbers, make data, your ally.
Spontaneity is your best friend
Do not dismiss the significance of emotional satisfaction one gets after purchasing an item. According to a survey from Clicktail, 74 percent of shoppers have ‘stressed-shop’ before, and 40 percent used shopping as a form of therapy.
Impulse buys increase your average transaction value while you put in little to no effort for such results. You may want to include promotions to spur the interest amongst consumers or have limited-time-only products and sales. Most consumers will not want to be excluded from such deals. You can push this even further by coming up with a promotion solely for those under a customer loyalty program. The exclusivity and loyalty perks (membership discounts or points) will arouse consumers to purchase an item.
Invest in a retail point of sale system that offers more than a mere efficient checkout experience. The POS System not only reduces the possibility of error in a transaction, but it can also manage your customer membership system. It does so by keeping track of your customer’s purchases, updating their reward points and even sending them marketing emails.
Similar but different
Cross merchandising is the practice of displaying products of different categories together. These products will need to be complementary to each other to entice consumers with the various options of interconnected products. Think bread and jam, or toothpaste and toothbrush.
If you are still not sure what are the types of products to pair up, you may want to look at your POS data and see what products are often in the same transaction.
The essential product hierarchy
Product hierarchy, also known as consumer decision tree (CDT), is the categorisation of a product into its essential components. There are several categories of these components that are taken into consideration by a consumer. Depending on a consumer’s need, objective and circumstances, the hierarchy differs.
In the instance where a consumer is looking into buying a camera, they might look into the camera specs, its weight, durability and even appearance. With these different factors to consider, consumers will use their product hierarchy to make their decision. As a retailer, you can then help them come to a sound conclusion with assortment planning.
Assortment planning’s ultimate aim is to drive profit but avoid adopting a tunnel vision. Do not merely promote products based on the data that you’ve accumulated. To do so, you will be limiting the range of products your business has to offer, and this will neglect another group of consumers.
It is crucial to remember that the essential ingredient in attracting and retaining customers is the ability to create an enjoyable customer experience. That should always be your priority, and if done correctly, it will translate to more purchases and profit on your end.