Assortment Planning: Products, Goods, and Effective Management Methods
What Is Assortment Planning and Why Is It Important
Assortment planning is…
Assortment planning is a comprehensive process of forming, structuring, and regularly updating the range of products a company offers its customers. Assortment planning is not just a list of SKUs but a well-thought-out system that takes into account demand, seasonality, sales strategy, and business objectives.
The focus differs by industry: assortment planning in manufacturing relates to developing and updating the product mix, while in retail companies and stores it focuses on selecting the optimal range of goods for customers.
Why businesses and stores need assortment planning
Without a clear strategy, the assortment quickly turns into a chaotic mix of items. As a result, businesses face issues such as:
- lack of popular products;
- excess stock and frozen working capital;
- declining customer satisfaction.
Assortment planning helps avoid these risks. For stores, it ensures shelves are stocked with the right products and customers always have choice. For manufacturers, it ensures efficient allocation of resources for production.
Key benefits of proper assortment planning
- Increased sales and profitability thanks to an optimized product mix.
- Reduced costs by eliminating overstock and improving inventory control.
- Higher customer loyalty when the right items are always available.
- Business agility through the ability to quickly react to demand and market changes.
Learn more about automation in our assortment management system.
Key Stages of Assortment Planning
Market and competitor analysis
The first step is analyzing and planning the assortment based on demand, seasonality, and customer preferences. Category managers assess sales dynamics, study competitors, and identify gaps or overlaps in the current product range. This analysis creates the information base for further decisions.
Building an assortment matrix
The next stage is developing an assortment matrix, where products are structured by categories, brands, price tiers, and other criteria. The matrix helps balance assortment breadth and depth, and identify core versus supplementary items.
Learn more about the principles in our assortment matrix.
Assortment management: monitoring, replacement, and expansion
Assortment requires constant control. Assortment management includes ongoing sales monitoring, identifying weak SKUs, replacing outdated items, and introducing new products. This cycle ensures the assortment remains relevant and meets evolving demand.
Stock optimization and cost reduction
The final stage is assortment optimization. This includes controlling stock levels, calculating minimum and maximum thresholds, and eliminating duplicate or low-margin SKUs. This approach reduces costs, minimizes frozen capital, and increases business efficiency.
Methods and Technologies of Assortment Planning
Types of assortment: breadth, depth, and novelty
Assortment is defined not only by the number of items but also by its structure:
- Breadth — the number of product categories offered.
- Depth — the variety within each category (e.g., brands, pack sizes).
- Novelty — the share of new products in the overall assortment.
The right balance of these parameters helps satisfy current demand while stimulating new purchases.
Assortment planning in manufacturing
In manufacturing, assortment planning relates to production output and managing the product mix. It considers production conditions, technology, equipment capacity, and market needs.
The technology of assortment planning in manufacturing includes:
- Demand analysis and sales forecasting.
- Development and launch of new products.
- Determining optimal production cycles.
- Monitoring quality and KPIs required for efficient sales.
This reduces the risks of overproduction and helps focus resources on high-demand items.
Assortment planning in retail stores
In retail, the focus shifts. The main objective is to create a product mix that satisfies customers while ensuring store profitability.
Assortment planning in a store considers:
- regional specifics and target audience;
- store format (supermarket, specialty store, convenience store);
- seasonality and demand dynamics;
- competition in the segment.
The product range must be both comprehensive and manageable to avoid shelf chaos and unnecessary costs.
Developing an assortment strategy
Creating a matrix and selecting SKUs is just the foundation. To achieve real efficiency, companies need an assortment strategy.
It includes:
- defining goals for categories and key product groups;
- choosing priority development directions;
- planning the optimal sales assortment;
- allocating resources for new product launches and promoting existing SKUs.
This strategy enables long-term assortment management and adapts to market and demand changes.
Using Big Data and analytics
Modern assortment planning is impossible without technology. Big Data, BI systems, and specialized tools analyze huge volumes of data — from sales history to customer behavior.
They help companies:
- forecast demand more accurately;
- tailor assortments to regions and store formats;
- automate routine tasks and speed up decision-making.
The result is flexible assortment management and greater efficiency, all driven by data.
Goals and Objectives of Assortment Planning
Driving sales and profit growth
The primary goal of assortment planning and management is to improve financial performance. An optimized product mix increases average basket size, stimulates cross-sales, and drives overall profitability.
Increasing customer loyalty
Assortment directly shapes customer perception. When products are always available and selection matches expectations, loyalty grows, encouraging repeat purchases. In retail, this is a key success factor.
Improving competitiveness
Proper assortment planning helps companies stand out. With strategic positioning and timely new product launches, retailers respond faster to market shifts and offer relevant solutions.
Optimizing inventory and reducing costs
A balanced assortment reduces expenses and minimizes risks. Supply chain and category managers use forecasts and KPIs such as turnover, margin, and shrinkage levels to optimize stock cycles and resource use.
Measuring Assortment Planning Effectiveness
Key KPIs and metrics
Effectiveness can’t be assessed subjectively — clear data is needed. Core metrics include:
- inventory turnover;
- category margin rates;
- on-shelf availability (OSA);
- share of dead stock and write-offs.
These KPIs form the basis for evaluating how well the assortment meets goals.
How to evaluate results
Assessments should be regular and based on sales analytics. In large companies, a dedicated department manages the information base for assortment decisions. If sales increase while costs decrease, assortment planning is effective.
Tools for analysis and automation
Retailers increasingly use BI systems, Big Data, and automation. These tools allow managers to:
- quickly identify weak SKUs and replace them;
- control stock and forecast needs;
- measure assortment effectiveness across stores and regions.
The outcome is full transparency and data-driven decision-making instead of intuition.
Examples of Assortment Optimization with Automation
Assortment planning in grocery retail
In grocery stores, assortment must reflect daily customer needs. Automation helps build the right mix — from staples to specialty categories. The system analyzes demand, seasonality, and behavior trends, ensuring shelves are filled with relevant items. This boosts customer satisfaction and minimizes overstocks.
Assortment planning in wholesale
In wholesale, the main challenge is maintaining a wide product portfolio for diverse clients and reacting quickly to demand changes. Automation helps manage product nomenclature, generate forecasts, and adjust supplier orders on time. This reduces costs and ensures reliable service for partners.
Assortment planning for new products
Launching new products is one of the toughest tasks. Without automation, companies risk underestimating demand or overstocking. Forecasting and analytics tools help define the right launch volumes, test items in pilot markets, and then scale. This minimizes risks and increases the success rate of product introductions.
Automating Assortment Planning with ABM Assortment
Category managers spend countless hours on reports and spreadsheets to understand which SKUs generate profit and which take up shelf or warehouse space. Manual matrix updates, constant stock checks, and SKU replacements make the job routine and inefficient.
ABM Assortment solves these challenges. It is an assortment management system that automates routine tasks and empowers managers to make decisions based on data, not intuition.
What managers get with ABM Assortment:
- Dashboard — clear analytics by products, categories, and stores. Managers see which SKUs drive profit and which drain budgets.
- Assortment matrix — instead of complex Excel files, managers get a flexible tool to manage categories and clusters. The system highlights where assortment is excessive or insufficient.
- Warehouse matrix — automated distribution control. Stock statuses are synchronized across stores and warehouses without manual checks.
- Classification & clustering — smart grouping of SKUs and stores eliminates chaos and ensures better assortment management.
- Strategy — a digital tool for creating assortment policies. Algorithms guide where to expand depth and where to cut back.
- BI module — advanced analytics and ready-to-use reports. Managers can access plan vs. actual, supplier analysis, and category performance instantly.
Business results:
- fewer errors and less chaos in assortment matrices;
- significant time savings for category teams, with more focus on strategy;
- full transparency in category management;
- higher sales and profits by better matching customer demand.
FAQ
What does assortment planning mean?
Assortment planning is the process of selecting and structuring SKUs to balance customer demand with business goals. It’s not just a product list but a data-driven approach to assortment management.
What are the key stages of assortment planning?
The typical cycle includes:
- Demand and market analysis.
- Building the assortment matrix.
- Ongoing assortment management and adjustments.
- Stock optimization and cost reduction.
This approach creates an effective assortment aligned with customer expectations.
What’s the difference between assortment planning in stores and in manufacturing?
In manufacturing, it’s about product mix planning, production cycles, and resources.
In retail, the focus is customer satisfaction, assortment breadth and depth, and competitiveness in specific markets.
How do you know assortment planning is effective?
Effectiveness is measured through KPIs such as turnover, category margins, shrinkage, and on-shelf availability. Evaluations are run dynamically — across stores, categories, and time periods.
How does automation support assortment planning?
Automation streamlines routine tasks, eliminates errors, and enables data-driven decisions. Solutions like ABM Assortment help managers analyze markets faster, build matrices, create strategies, and track effectiveness. This saves time and boosts profitability.
