Look #retailfam, assortment planning is really really really important if you want to win at the retail game and not lose your shirt. We’ve compiled a humorous list of 15 assortment planning mistakes that you’ll want to be aware of when stocking your store (or virtual) shelves.
No. 15: The “We Don’t Need Variety” Fail
Some retailers believe in the old saying “less is more.” While this saying applies to minimalist home decor and haiku poetry, it fails spectacularly when it comes to assortment planning. What happens when you’re a shoe store and you only sell high heels? You alienate everyone who prefers sneakers, flip-flops, or just anything that doesn’t put their ankles at risk. The result is a spectacularly narrow customer base and some seriously missed sales opportunities.
No. 14: The “More SKUs Means More Sales” Fail
At the other end of the spectrum, there’s the retail equivalent of hoarding, i.e., the belief that if you stock more, you’ll sell more. Unfortunately, too much choice can overwhelm customers and lead to decision paralysis. Plus, it’s a logistical nightmare for inventory management. Turns out, your retail store is not a Pokemon game; you don’t need to catch (or stock) ’em all.
No. 13: The “Throw All Eggs in One Basket” Fail
Some retailers focus heavily on their top-performing items, neglecting the long-tail SKUs that often constitute a significant chunk of their revenue. Putting all your eggs in the top-selling basket can be a recipe for disaster when those trends shift – and trust us, they will.
No. 12: The “Trend Chasing” Fail
Remember when fidget spinners were the must-have item? Yes, we’re trying to forget too. This fail is all about blindly following trends without considering the longevity of those trends. Some retailers stocked thousands of units of these fads, only to find themselves with a mountain of unsellable stock when the trend disappeared overnight.
No. 11: The “No Data Analytics” Fail
In this day and age, retailers have a wealth of data at their disposal, from customer preferences to buying patterns. However, some still rely on guesswork for assortment planning. This is akin to navigating a minefield with a blindfold. You’re going to step on something explosive sooner or later. Seriously, you should take a look at AI retail merchandise planning software to help you out.
No. 10: The “One Size Fits All” Fail
This fail comes from the belief that if a product sells well in one store, it’ll sell well in all the stores. However, local market characteristics often vary greatly, and a one-size-fits-all approach to assortment planning can easily fall flat. A pool supply store in Alaska, anyone?
No. 9: The “Ignoring Seasonality” Fail
We all remember the local store that was selling Christmas decorations in February or swimwear in November. Seasonality is a key factor in assortment planning, and ignoring it can leave retailers with stock they can’t sell and a loss in customer trust.
No. 8: The “Lack of Private Labels” Fail
Private labels can offer a great opportunity for differentiation and increased profit margins, but many retailers neglect this option. The result is a sea of identical products that does nothing to attract or retain customers.
No. 7: The “Forgetting to Refresh” Fail
Some retailers think once they’ve got their assortment sorted, they can just sit back and relax. This fail is about forgetting that product assortments need to be constantly refreshed and updated to keep up with customer demands and trends.
No. 6: The “Ignoring the Online Factor” Fail
In an increasingly digital world, ignoring the online factor can be a major downfall. Customers often research online before purchasing in-store, and online sales continue to grow. This fail occurs when retailers don’t consider how their in-store assortment correlates with their online offerings. Failing to offer popular online items in-store or vice versa can cause frustration and lost sales.
No. 5: The “SKU Ratios? What’s That?” Fail
This fail comes from misunderstanding or neglecting SKU ratios. Stocking 500 units of a slow-selling item and only 50 of a bestseller is a recipe for disaster. Getting SKU ratios wrong can lead to excessive overstock or stockouts, both of which can be catastrophic for sales and customer satisfaction.
No. 4: The “No Collaboration with Suppliers” Fail
Successful assortment planning should involve collaboration with suppliers. Ignoring their input on product performance, upcoming releases, or possible shortages can lead to big surprises – and not the good kind. Retailers who forget that suppliers can be strategic partners often end up on the losing end.
No. 3: The “Static Pricing Strategy” Fail
Retailers who adopt a static pricing strategy across all products often fail to maximize their profits. Treating a high-demand, low-supply item the same as a low-demand, high-supply one can lead to significant revenue loss.
No. 2: The “Assortment Planning? Nah, I’ll Wing It” Fail
This is when retailers consider assortment planning as an afterthought rather than a strategic business practice. Winging it can lead to a hodgepodge of products that don’t cater to the target market or meet demand. We’re totally biased here, but peep out how Generative AI can help.
No. 1: The “Not Putting the Customer First” Fail
The biggest fail of all in assortment planning is forgetting that at the end of the day, it’s all about the customer. Retailers who don’t pay attention to their customers’ preferences, feedback, and shopping behaviors are bound to fail. If you’re selling what your customers don’t want to buy, you’re not going to make many sales. It’s as simple as that.
There you have it – a list of the top 15 assortment planning fails. For retailers reading this, consider it a checklist of what not to do. Remember, assortment planning is both an art and a science, and the best retailers master both. Do your research, use your data, stay flexible, and always put your customer first. Here’s to less facepalming and more high fiving in your retail future.
