Attribute Goal Setting in Assortment Planning helps Prevent Cannibalization in Retail

To understand the importance of setting attribute goals, we first need to define what an attribute is. In retail, product attributes are the characteristics of a product, such as size, color, material, style, or brand. These attributes form the foundation for pre-season planning, helping retailers make informed decisions about what products to stock, how to position them, and how to meet customer demand and generate the highest GMROI.

Attributes guide production and distribution by ensuring that the right products are manufactured and sent to the right stores. They also help create a diverse and balanced product offering, avoiding redundancies while ensuring variety to appeal to a broader customer base.

The Three Types of Attributes

1. Location Attributes

Location attributes enable retailers to tailor assortments for specific locations or customer segments. They ensure the assortment reflects regional and cultural preferences. For example:

• Size Range: Offering a full-size range based on customers’ preferences in a specific region.
• Climate Adaptations: Warmer climates may require lightweight fabrics, while colder regions prefer heavier materials.
• Cultural Preferences: Some areas may favor modest styles, while others lean toward bold designs.
• Store size or other physical characteristics

Retailers can meet localized demand more effectively by aligning products with location attributes.

2. Product Attributes

Product attributes focus on the identification and differentiation of styles, helping retailers stand out in a competitive market. Examples include:

• Differentiation: Attributes like color, material, and style distinguish one product from another.
• Enhancing Online Shopping: Well-defined attributes make filtering and searching easier for customers, saving time and improving satisfaction and margins.
• Sustainability Goals: Attributes such as “organic cotton” or “recycled materials” appeal to environmentally conscious consumers and align with retailer sustainability objectives.
• Pricing Strategies: Material quality, design complexity, and brand reputation influence perceived value and pricing.

3. Customer Attributes

Understanding the customer is key. By analyzing shopping habits, retailers can define customer types and create personalized assortments and recommendations. For example:

• A youthful, trend-focused customer might seek “on-trend colors” and “fashion-forward silhouettes.”
• Sustainability-focused customers might prioritize products with eco-friendly attributes.

Why Set Attribute Goals?

Setting attribute goals ensures the assortment aligns with business objectives, design, and optimizes the product offering to meets customer expectations. Here’s how it helps:

1. Aligning with the Target Customer

Attribute goals ensure the assortment reflects the preferences and needs of the retailer’s target audience. For instance:

• A trend-focused brand may prioritize “on-trend colors.”
• A sustainability-focused retailer might set a goal for 50% of products to feature eco-friendly materials.

2. Creating Differentiation

Attribute goals help retailers stand out by offering unique or distinctive products. This might include exclusive patterns, materials, or fits, making the assortment difficult to replicate.

3. Balancing the Assortment

Setting goals prevents overemphasis on one category while neglecting another. For example:

• Color Balance: Ensuring a mix of neutrals, bolds, and seasonal colors.
• Price Tiers: Offering a range of entry-level, mid-tier, and premium products.

4. Supporting Brand Values and Objectives

Attribute goals ensure alignment with the retailer’s overarching mission, such as:

• Inclusivity: Aiming for 100% of the assortment to include extended sizing.
• Sustainability: Committing to a percentage of products made from eco-friendly materials.

5. Avoiding Cannibalization

Perhaps the most important reason to set attribute goals is to prevent product cannibalization. Cannibalization occurs when the sales of one product reduce the sales of another within the same assortment resulting in a loss of margin. This often happens when products overlap in terms of target audience, price, or features, leading to internal competition rather than market expansion. Properly attributing the assortment helps ensure products complement rather than compete with each other.

Measuring Success with Attribute Goals

Attribute goals create measurable benchmarks for success:

• Performance Metrics: Did “floral prints” achieve the targeted 15% of total sales?
• Customer Satisfaction: Are customers responding positively to size-inclusive products?

By setting and tracking these goals, retailers can refine their assortments, avoid wasted resources, and better serve their customers.

Conclusion

Attributes are the backbone of a successful assortment plan. By setting clear attribute goals, retailers can align their products with customer demand, optimize inventory, and create a competitive edge in the market. Whether addressing location-specific needs, differentiating products, or understanding customer preferences, attribute goals ensure the assortment meets both business objectives and customer expectations, all while avoiding pitfalls like cannibalization. Ultimately, a well-attributed assortment plan is essential for driving margin, customer loyalty, and long-term success.