The most crucial function of any retail organization is buying. It serves as the foundation for all other activities. From IT and finance, every role exists to support the company’s ability to purchase merchandise and sell it for a profit. Surprisingly, many companies overlook the crucial importance of data-driven assortment planning. They prioritize e-commerce and store operations while assuming that retail merchandising is as effective. This oversight leads to outdated buying methods that rely on error-prone unconnected spreadsheets Excel rather than data-driven decision-making.
At daVinci Retail, we firmly believe that assortment planning is the cornerstone of retail, a comprehensive process encompassing the entire buying process. Accurate assortment planning involves creativity with retail analytics to guide the creative process and make informed decisions. It involves blending fashion with open-to-buy to create exceptional assortments that meet customer demand and financial objectives.
See also: What Is Assortment Planning?
Outdated Practices: The Risks and Limitations
Traditional practices like wedge planning, where clustered stores are solely based on sales volume and uniform assortment selection for all stores within a cluster, fail to consider each location’s unique characteristics and customer preferences.
Another outdated method is still widely used without much thought of selecting items for top stores only, assuming that all stores are the same. This approach fails to consider each store’s individual characteristics and customer preferences.
Believe it or not, there are companies where buyers make purchase orders based solely on guesswork. They might say, “I think I can sell 5,000 of these,” without any substantial evidence. This lack of nuance and reliance on guesswork leads to uncertainty in buying the correct quality, especially if you have an omnichannel.
Relying on guesswork for purchasing decisions without proper data analysis leads to uncertainty, excessive inventory, and missed sales opportunities. Both scenarios negatively impact the customer experience and profitability.
If your company follows these outdated practices, you take significant risks with your most valuable asset, your inventory.
Embracing Assortment Planning: A Data-Driven Approach
To mitigate risks and optimize the buying process, it is essential to eliminate guesswork and base decisions on accurate data. Assortment planning empowers retailers to make informed buying decisions by analyzing sales data, leveraging forecasting techniques, and quantifying customer preferences. This data-driven approach ensures purchasing the precise quantities for each item, reducing the chances of overstocking or stockouts.
Tailoring Buys to Meet Customer Demand
While sales volume is an important metric, it doesn’t comprehensively understand customer preferences. Data-driven Assortment planning enables retailers to go beyond sales volume and customize buying quantities for each item based on specific customer preferences. By considering the unique characteristics of each location and understanding customer demands, retailers can optimize their inventory and deliver a superior customer experience. This tailored approach is crucial in meeting the immediate needs of discerning shoppers, such as millennials, who expect brands to cater to their preferences.
See also: What is Retail Store Clustering?
The Benefits of Assortment Planning with daVinci Retail Software
daVinci Retail Software empowers retailers to revolutionize their assortment planning process. By leveraging the software’s advanced features, retailers can:
- Eliminate guesswork and make data-driven buying decisions, resulting in optimized inventory levels and reduced costs.
- Gain better insights into customer preferences, enabling the customization of assortments for omnichannel.
- Enhance the customer experience by ensuring the availability of desired products, thus fostering loyalty and satisfaction.
- Improve profitability through accurate buying, reduced markdowns, and increased sell-through rates.
- Increase operational efficiency by streamlining the entire assortment planning process and fostering team collaboration.
Conclusion:
Traditional buying methods are no longer sufficient to thrive in the rapidly evolving retail landscape. By embracing data-driven assortment planning and utilizing daVinci Retail Software, retailers can unlock the power of data-driven decision-making, optimize inventory management, and deliver exceptional customer experiences. With daVinci, retailers can gain better control over their inventory, minimize risks associated with excessive stock or stockouts, and achieve higher profitability in the competitive retail market.
Don’t settle for guesswork in your buying process. Embrace assortment planning with daVinci Retail Software and transform your retail operations today.
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daVinci Assortment Planning
daVinci’s Assortment Planning solution gives merchants the power to tailor buys by the customer to improve sell-thru and ensure each assortment is profitable from the start.
