Assortment planning promises fast business results, but retailers must move past spreadsheets first

Assortment planning, typically a detailed and time-consuming process, continues to get easier and faster with automated software tools. Retail planners are often working with thousands of SKUs, and Internet buying has made assortment planning trickier as buyer behavior changes. Historically, the information needed for assortment planning is on different systems or spreadsheets, with buyers siloed as well. Assortment planning applications can pull disparate sources together for management all in one place. Automated planning systems take into account product attributes, store characteristics, space utilization and more to create collaborative tools. Even in a tough economy, assortment planning can be justified; it provides business value quickly by increasing merchandise optimization.

Assortment planning software is flexible, especially compared with historic planning methods, and may be web-based. It can let retailers pull data at critical points throughout the planning process, and it should extend past planning into assortment execution. Software tools for assortment planning should support the overall merchandising strategy and integrate with other planning processes, like merchandise allocation. Retailers can also often make in-season adjustments with software, and conduct ongoing analyses of performance to tie in with forecasting. Software may incorporate evaluation and review capabilities to analyze the effectiveness of the assortment planning strategy.

Best-in-Class Assortment Planning Features:

• Performs attribute-based analysis on sales data to create accurate assortments to meet demand, and offers metrics at every level of planning
• Help siloed groups and buyers work together with collaborative applications
• Translates assortment plans into execution with actual buys

Top Considerations before Buying Assortment Planning Products:

Integration will continue to be top priority for assortment planning software, whether it’s integration with shelf optimization systems, purchasing systems or advanced merchandising systems. Integration of disparate customer data and improved demand signal repository interfaces will also be key as adoption keeps increasing, and so will integrated product lifecycle management (PLM) software. Other assortment planning trends point to more sophisticated software that puts out granular data and detail based on predictive customer insight. More advanced analytics will use KPIs to plan assortments, and show implications of assortment decisions on service levels, inventory and more. Retailers can look for developing functionality that allows customization of assortments by store, and graphic views of products while planning.

Key Products:

1. Logility develops collaborative supply chain planning solutions; its Voyager Solutions suite offers a complete solution with a single Internet-based framework. Voyager provides the tools for organizations to become demand-driven, with advanced modeling capabilities that create a forward-looking demand plan by product, channel or geography. Their Demand Solutions provide forecasting, demand planning and point-of-sale analysis for maximizing profits in manufacturing, distribution and retail operations.

2. 7thOnline is a provider of web-centric assortment planning and optimization solutions to the apparel, footwear, and accessories community. The 7thOnline mission is to build best-in-class merchandising solutions by leveraging management's industry expertise and by incorporating the ongoing guidance of our user community. Their Assortment Execution software provides an automated execution application to translate assortment plans into buys. 7thOnline’s Assortment Planning application uses past information effectively to create optimal localized assortments for stores.

3. One Network develops technology to enable precision execution of collaborative, multi-enterprise operational processes. Designed specifically for multi-enterprise or many-to-many computing environments, One Network’s community supply networks use cloud computing technology, combining a process-centric software architecture with a highly scalable network to improve operating effectiveness, lower IT costs and accelerate system adoption rates.

4. JDA has provided supply chain management solutions for almost 30 years. Their merchandising portfolio includes JDA Assortment Planning. It removes process silos to create assortment plan visibility, enable product lifecycle planning, merchandise and assortment plan reconciliation and vendor communication. It also supports promotions and receipt flow, makes in-season adjustments and scales as companies grow. Assortment planning software also uses a consensus demand forecast to support all planning aspects.

5. SAS develops the Merchandise Intelligence product line, which includes functionality to inject intelligence into every step of the merchandising life cycle. The SAS Integrated Merchandise Planning module provides complete planning capabilities for the merchandising process, including performance analysis, financial planning, assortment planning, space planning, allocation and more. Other modules in the suite handle size optimization and revenue optimization.

Assortment Planning
Definition: Assortment planning is the process of breaking down an overall merchandise plan (MP) into discrete segments based on product attributes, such as styles, colors, and SKUs, etc.