Planning to Sales
Leading retailers plan their assortments according to the sales potential of an item. More importantly, they manage these assortments in order to ebb and flow with changes in customer demand for products. Assortment planning to sales is, in essence a method of bottom-up planning that combines historical consumer behavior with planned financial objectives to develop an optimal mix of merchandise required to achieve the assortment strategy.
This method of planning is referred to as “demand-driven planning,” “consumer-driven planning” or a combination thereof. This means that the retailer uses a product’s sales behavior (or consumer’s buying behavior) and forecasts to answer the following questions:
• Which items do they expect to sell best?
• In which styles will these items sell?
• In which quantities will they sell?
• When do they expect these sales?
In a manner similar to the example given above, this would mean that the merchant would have the same eight linear feet of display space for life jackets. But they would start planning their assortment by allowing the assortment planning system to give them a recommended number of style options – rather than relying on filling the space.
Planning to sales will allow the merchant to develop a more accurate picture of merchandise flow across time. By utilizing the average per store selling units measure in the assortment planning process, the merchant is able to determine a starting point for the product mix and determine a total number of units, by product category, to use for executing their product buy. The consideration of space is handled by the plan-o-gram team and the allocation system.