Does this sound familiar? A retailer’s merchandising team is preparing to present their plans to key executives at an assortment-line review meeting. In preparation for the review, the team spends countless hours building their line plans. The team is ready to go and excited for the opportunity to present their carefully crafted plans to the executives.
One of the team leaders kicks off the assortment-line review, painting the picture of product collections that will wow customers and shape the success of the organization. The creative overview creates a buzz of excitement.
Unfortunately what happens next derails the meeting. Following the creative overview, the agenda calls for a review of the financials. Suddenly, all of the momentum and excitement around the creative process redirects into individual styles and individual plans – the very definition of failing to see the forest for the trees. When a high-level meeting devolves into nitpicking individual plans, an organization has been struck by the curse of “future actuals.”
Presenting plans as “future actuals” is the wrong approach. At this stage in the assortment planning process, the plan represents a best guess. Experienced planners understand that the important takeaway isn’t whether a specific item is going to sell a specific number of units per week, but rather how the overall assortment strategy comes together to have the best chance of achieving the financial objectives of the organization.
The planner needs to be able to create guardrails around what can and cannot work and maintain financial responsibility and discipline without letting the “future actuals” syndrome get in the way of actually achieving a healthy sales outcome. Six months before a style is on offer, how much is being invested in the item matters; what it will do the third week of March in a certain store does not.
An assortment planning solution with the proper functionality build around a best practice workflow could enable the strategic vision of the team. We believe teams should focus their efforts on strategies related to what’s important at each step in the process. Here is how the JustEnough solution workflow supports the assortment planning process.
At the beginning of a season, the team needs a starting point. We leverage a blend of plan, financial and historic data to recommend an option count for each grade of store and give the user a sandbox in which to arrive at a style and choice count that they feel confident in using to kick off the plan.
Starting with a universal assortment plan containing all the possible products that can be a part of the assortment, we leverage the power of an integrated system to facilitate the art of assortment planning. This allows the team to put together a compelling assortment with transparency into the financial outcomes of their decisions.
Once the team has a great assortment, we move onto making sure the style buys are as good as possible by managing material and fabric commitments, as well as building clear action roadmaps with trigger dates to ensure that the focus is on the correct level of granularity at the correct time.
Finally, once ready to deploy, the tactical view of the near-term horizon comes into play. The team starts making decisions about individual styles and channels and how best to use the inventory they’ve purchased and the styles they’ve assorted.
There is no crystal ball to assist an organization in planning their business. Developing assortments that deliver results requires a balance between art and science. Yes, the numbers on a piece of paper are important, however what’s more important are the strategies that are developed and executed against in order to set the organization up for success.