Retail Range Planning, Merchandise Planning and Assortment Planning

Range planning, from setting the concept, purpose and direction through to selecting the products and finalising the price, distribution and sales forecast, is a truly iterative process that typically involves buying and merchandising working hand in hand, often with somewhat opposing objectives…

The ultimate aim is for the final range selected to meet and exceed the customers’ expectations. Additionally buyers will want the range to be innovative and to really shout the brand values whilst merchandisers will want it to achieve high rates of sale and deliver excellent margin. Of course, any range should be constructed such that it can be delivered to the consumers’ baskets in the most reliable and profitable manner…

Retail planning is complex – buyers and merchandisers have much to consider when developing and planning the range

Buyers and merchandisers have a lot of questions to consider when developing and planning the range, such as how to provide the customer with:

• the right depth and width of range – ensuring sufficient choice and range completeness
• the right price architecture – guiding the customer through the options available
• the right quality and value – ensuring the brand and product propositions fit your business
• great on shelf availability (with minimal stock investment) – ensuring you maximise your sales potential off the lowest possible cost base

And all whilst delivering:

• a flexible, responsive, agile supply base – to ensure you can follow consumer trends quickly
• a better return per square foot than the last range – to mitigate the ever increasing cost of property
• a better shopping experience for the customer – to secure their loyalty, repeat business and increased basket size…

So it is understandably a lengthy and involved process…

Merchandise Planning – Central to Profitable Retailing

Most world-class retail businesses have some form of range planning / merchandise planning process at the centre of all their commercial planning activities. Merchandise or range plans articulate the financial targets in terms of how the range should be built up, what proportion of the total business mix a range should take, associated store and DC space allocations, etc. Moving along the time line closer to the time of range launch, merchandise / range plans become a key document for buyers and merchandisers, a living document, that captures all key information as products are developed and data is gathered that ultimately influence buying price, selling price, store distribution and store position, promotion planning, markdown budget, supply chain flow, sourcing strategy, rate of sales etc.

Effective Range Performance Measurement – Plan vs. Actual

The Range Plan or Merchandise Plan as they are equally well known, form the basis for the development of the store / store cluster level assortment plan and in a fully integrated planning process are the trigger for both the demand planning and visual merchandising processes. A good range plan also allows the buyer and merchandiser to measure the effectiveness of their ranges against the original budgets and against plan. It allows for hard and soft constraints to be applied in operations, such as Open To Buy (OTB), management of intake, delivered margins, promotional activity and markdown / residuals planning to be undertaken via use of a WSSI.

With such criticality to the business and a dependency on such a wide set of data a quality merchandise plan / range plan with adequate roll up and drill down capability can really only be delivered from a quality tool, supported by quality business processes and well trained teams.