The curiosity around analytics has peaked for major retailers from around the world. Retail analytics software solutions equip retailers with an in-depth analysis that can be used to make operations as profitable as possible while meeting the ever-evolving demands of the customers of today. Retail analytics software is an apt replacement for outdated planning solutions that cannot support the intricate planning requirements of the omnichannel environment of today.
Cutting-edge data analytics technology helps retailers understand trends, demand, price architecture, products, and differences in regional behavior. Advanced solutions also factor in volume, revenue, and pricing goals to provide automated price adjustments and other useful features.
Among the numerous retail processes that can benefit through analytics, product assortment is one of the most important ones, as it carries a noteworthy impact on gross margin and sales. Accurate assortment planning is critical for large-scale retailers, but businesses tend to find the assortment planning process difficult and off-putting.
Successful Assortment Planning
Traditionally, product assortment is an intricate, time-consuming process that includes numerous variables. The earliest retailers relied only on their judgment to make decisions related to assortment—a method that yielded mixed results.
Successful retailers strategically balance the differentiation of product assortments with the cost and complexity of the activity, ensuring that they can meet a majority of the needs of their local clientele. By choosing an advanced retail analytics solution with assortment planning capabilities, such as Manthan Retail Analytics, users will have access to reliable data as well as a means of interpreting it.
Retail analytics helps streamline and simplify the assortment planning workflow, leading to the maximization of margins and sales while decreasing planning time. This blog explains the ways in which retail analytics helps businesses achieve and maintain a competitive edge.
Advantages of Assortment Planning
Assortment planning can be defined as deciding the range of merchandise choices that should be made available to customers. Retail analytics helps users determine the merchandise assortment and variety that will maximize sales. With assortment planning tools, businesses can easily make key assortment-related decisions, such as:
- Breadth and depth of ranges
- Channel and store clustering
- Assortments according to space constraints
- Harmonized international/local product ranges
Data analytics solutions like IBM Acoustic Analytics use raw data to determine product variety, availability, and assortment while predicting customer reactions to assortment changes. Retail analytics helps procurement managers:
- Understand their customers
- Build on customer desires
- Review customer shopping patterns
- Study the past performance of procured goods
- Analyze upcoming market trends
Advanced product assortment capabilities in retail analytics software such as Oracle Retail Merchandising System leverage business data to formulate a cohesive plan for the delivery of the correct merchandise, at the optimum price & the right time, to the customers who want it most.
Assortment Planning with Predictive Analytics
Few of the numerous variables that should be considered when developing an assortment plan generally include:
- Demographic information—such as age, gender, religion, income, and family structure
- Regional data—such as temperature, culture, and local products
- Geographical info—such as whether the store is located in the city or countryside, whether it is a tourist area, and density of traffic
To identify the above variables, the following steps should be considered:
- Available data sources should be researched to help managers make informed decisions when undertaking assortment planning. Popular data sources include supplier ex-factory data, retail scanning data, shopper loyalty card data, and external market data.
- Data sources must follow a common structure to enable effective analysis.
- Available space should be studied in order to drive assortment depth and width.
- Category Management Software can be used to prepare, store, and visually represent collected data.
Retail analytics solutions like the Microsoft Cortana Intelligence Suite feature cutting-edge assortment planning that allows users to conduct the above steps swiftly and easily. Advanced solutions remove the chances of human error and base assortment planning on facts.
Choosing the Right Retail Analytics Software for Assortment Planning
If your organization sounds like it has a use case for a retail analytics solutions, here are a few tips for choosing the one that is right for you:
- Assess the availability of data
- Assess data volume requirements
- Determine whether the software being considered can be integrated into existing sources of data easily
- Study the ability of the software to identify assortments in order to meet the needs of targeted consumers swiftly
- Evaluate employee training requirements
- Determine whether the software is compatible with other Category Management tools such as floor plans and planograms