In this final blog post highlighting findings from the EKN 2016 Assortment Management and Optimization report, I’ll shed light on the recommendations it offers to help retailers create balanced assortments that drive sales while aligning with financial and merchandising goals.
Sponsored by JustEnough Software and based on survey responses from about 50 North American retailers, the report concludes that for more than one-third of retailers, assortment management is yet to be connected to allocation in a real-time process or at a user level. Roughly the same percentage of retailers cite that their assortment planning process is not integrated with financial and merchandising plans. Additionally, shortcomings related to a lack of accurate demand forecasts, consumer insights and a multi-attribute based planning process hinders the development of precise assortments that boost both traffic and margins.
Retailers can circumvent these challenges by transitioning out of legacy systems, opting instead for a single, unified and integrated merchandising process-based platform guided by four strategic pillars: customer science, digital user interface and experience, integrated workflow and functional collaboration. They can further reduce the silo effect by adopting a series of user-level integrated workflows supported by best-in-class solutions that generate targeted and balanced assortments.
The EKN 2016 Assortment Management and Optimization report offers specific recommendations to help retailers improve their assortment planning and execution process over a short-, medium- and long-term period of time. A few examples include:
- Over the course of the first six months, retailers should set benchmarks and KPIs to measure targeted pre-season and in-season assortment progress – i.e., shorter lead times, on-time orders, inventory accuracy, lower lost sales, higher full-price sell through and reduced markdowns, for example.
- Within the first 12 months, retailers should migrate to a multi-attribute based assortment planning system, enabling them to create attribute-based assortments based on common product specifications (i.e., size, color, styles, etc.) and customer segmentation attributes (i.e., preferences and affinity).
- At the six-month mark, retailers should ensure full functional and organizational integration between merchandise planning, assortment management and allocation for strategic planning. At this time, they should also add a consumer insights module within the merchandise and assortment management system for seamless access to customer behavior data at the end-user level.
- At the halfway point of the transition and through to the end, retailers should use investigative and predictive data insights to identify and resolve gaps in assortments through a phased evaluation of pre-season, in-season and end-of-season assortment plans.
To read the full list of recommendations or to download the EKN Assortment Management and Optimization report, click here. Be sure to check out how JustEnough Assortment Planning fully integrates with an innovative suite of retail planning solutions to help organizations create differentiated, customer-centric assortments that drive sales, reduce markdowns and increase margins.