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Naturally all of us would like to sell everyone who shows interest in our products. After all that is exactly why we are in business in the first place. But in the retail business trying to sell everyone who comes into your store or finds you on the Web would be unrealistic – and you most likely would go broke trying.
The old saying “You can’t be everything to everybody” comes to mind. All good retailers have an identity or … and target a certain demographic of likely customers as their market. You certainly wouldn’t go into a store specializing in work boots looking for women’s dress shoes just as you wouldn’t expect to find cowboy boots in an athletic shoe store. Even the broadest assortment that might be found at a family shoe store is governed to a certain extent by consumer demographics size of store or even the financial strength of the owner.
Assortment Creep
Stores that attempt to please everybody so as to not miss a single sale over time end up with a condition I refer to as “assortment creep.” The symptoms are easy to spot: lots of random inventory duplications broken sizes on popular styles markdown opportunities from past seasons that may have been missed. In other words a whole lot of nothing! This is difficult to spot on paper or just by reviewing inventory reports. You may observe that the stock levels are over plan but sales are slipping for no obvious reason.
One solution I often share with clients who are struggling with this problem is the creation of a “model stock.” The easiest way to picture this is to imagine starting from scratch. Assume you are opening a new location or that you have nothing at all in the particular category. In a perfect world you would map out exactly the way the assortment should look – what lines you wish to carry how many styles what sizes and colors a varied assortment of price points and so on. Next you would need to extend out the dollars and see how much you…
Have at Retail
Compare this number to your open-to-buy plan. If you are way over or short you may have to adjust the model by adding or deleting.
Congratulations
You have just completed step one of your assortment plan.
Compare the Model to the Store
Step two is to compare your “model” to what you currently have. This is where the process gets interesting. You will find that over time you have added lines that perhaps now are not important. You might find that you have been filling in to styles that once valid are now slow turning – and may no longer be relevant to your business. You might even discover that you have been ordering too many sizes and widths that in reality end up on the sale rack or – worse yet – are carried over from year to year.
Your goal should be to put your inventory back into balance. In essence this process is much like re-balancing your stock portfolio or 401k.
Correct and Go Forward
Once you have determined where the holes exist in your plan it is time to correct the problem. This is the final step in the process. Now that you have identified items that are not part of your model plan mark them down immediately and turn them into cash. Use the funds generated by the clean-up to reorder the sizes that may be missing from the key styles with which you wish to go forward.
Creating model stocks works very well with almost every category of merchandise that carries the possibility of being reordered or filled in. If you find your business suffering from assortment creep try this concept. You will be surprised at how many fewer customers walk out of your store empty-handed.
Ritchie Sayner
You Can’t Afford to Make Every Sale!
Ritchie Sayner
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Published in the January/February 2017 issue of Shoe Retailing Today Copyright © 2017
National Shoe Retailers Association Tucson AZ www.nsra.org. All rights reserved.
Article Summary
The article discusses the concept of “assortment creep” in retail where stores attempt to cater to everyone leading to disorganized inventory and declining sales. It suggests creating a “model stock” to streamline inventory ensuring that product offerings align with the store’s target demographic and financial goals.
“Your goal should be to put your inventory back into balance.”
Real-World Examples of Assortment Planning
The concept of “assortment creep” and the solution of creating a “model stock” can be applied across various retail sectors. Here are a few examples of how businesses have successfully implemented these strategies:
- A local boutique clothing store noticed that their inventory was cluttered with outdated and random items leading to decreased sales. By implementing a model stock approach they streamlined their offerings to focus on trendy high-demand pieces that matched their target demographic resulting in increased foot traffic and sales.
- A sporting goods retailer was struggling with excess inventory in niche sports categories that were not popular in their region. By analyzing their sales data and customer preferences they adjusted their model stock to focus on popular sports and fitness equipment reducing markdowns and improving turnover rates.
- An online electronics store faced challenges with overstocked and underperforming product lines. By creating a model stock plan they identified key products that aligned with consumer trends and technology advancements allowing them to optimize their inventory and enhance their competitive edge in the market.
