Más contenido relacionado La actualidad más candente (20) Similar a Introduction to Category Management And Assortment Planning in the Retail Industry (20) Más de KINDUZ Consulting (11) Introduction to Category Management And Assortment Planning in the Retail Industry1. Enabling Sustained Business Excellence
Category Management & Assortment planning
Aartee Roy
Senior VP, Retail Industry Consulting
KINDUZ Business Consulting
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
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Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
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3. Contents
What is a Category ?
What is Category Management ?
Key areas of Category Management
Identifying Product Groups
Space Planning
Assortment Planning
Visual Merchandising
Inventory Management
Complete Process Flow
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
4. What is a Category ?
A Category is a group of similar or related items which the
customer would ideally like to find together in a store.
Categories are mainly used as organizational aids to better
manage and monitor predefined groups of products.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
5. What is Category Management ?
Right product
At right price
To right location
At right time
To meet projected sale
Generate required Margin
And maintain defined stock cover
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
6. Key Areas of Category Management.
Category Managemnent includes :
• Space Planning to ensure desired display space.
• Assortment Planning to facilitate the achievement of required
financial objectives.
• Visual Merchandising to optimize display efficiency and aid
walkins/conversions in a store.
• Inventory Management to ensure required stock cover and avoid
being out of stock.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
7. Identifying Product Groups
Product Groups/Categories should be defined based on the
consumer’s needs and purchasing habits.
Home Fashion
Lighting
Decor Acc. Jewellery
Aroma Watches
Wall décor Perfumes
Flowers Leather Bags.
Garden Jute Bags.
Decorative Acc. Travel Bags
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
8. Space Planning
Considerations for Layout
Decisions :
High margin items should be
placed in high traffic areas.
Home Decor
High demand items should be
placed in low traffic areas.
Complementary items should be
placed near each other.
Seasonal needs should be
considered.
Leather Acc.
Niche Products
Items needing frequent restocking
should be placed near storerooms
Perfumes
or cash registers.
Larger departments should be
placed in lower traffic areas.
Impulse items should be placed in
Jewellery
closer to billing.
Shopping behavior and
Cash Till
operational considerations should
be recognized.
Impulse items
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
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9. Layout Options
Straight Floor Plan Geometric Floor Plan
Angular Floor Plan Mixed Floor Plan
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
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10. Benefits of Space Planning
Inviting store layout improves walkins into the store.
Improved circulation space within the store allowing for
accessibility to all products.
Improved conversion rates by better product visibility and
display.
Reduction in shrinkage.
The store layout can impact the customer’s perception of
the store’s positioning.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
11. Assortment Planning
Competition Analysis
Assortment Plan Forecasting/Trends Analysis
Revenue & Margin Projection
Demand Planning
Customer Analytics
Assortment Plan or the Merchandise Mix is rated around the globe as the second
most important factor for a store, after its location. The assortment plan
defines the revenue stream, impacting not only the top lines and bottom lines
but also the working capital locked in inventory.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
12. Key Deliverables of an Assortment Plan
Required Average Revenue/sft.
Required Gross Margin
Required Average Ticket size
Required Stock cover based on demand forecast
Suitable product as per catchment analysis and target
customer profile.
Based on competition study, merchandise mix should
define the store’s USP.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
13. Assortment Planning
Process • Customer & Catchment
Centric Assortment Plan
• Benchmarking
• Category composition which will deliver
• Customer Profile
• Sub Group Planning required financial
• Financial Projections
targets.
• Sourcing strategy
• Store Layout
• Pricing strategy
Input Output
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
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14. Benchmarking
Fashion
Boutique
Department Stores
Volume--- Volume +++
Department Stores
Mass Discounters – Coupon, Brand Factory
Hypermarket
Mass
Incorrect market positioning results in wasted resources by competing with players that are not the
right match. Define your focus market segment, key competitors and identify where YOUR
opportunity is.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
15. Customer Analytics
Age-wise Spending Power Category-wise Spend
3500 4000
3500
3000
3000
2500
Spending Amount
Spending Amount
2500
2000
2000
1500
1500
1000
1000
500
500
0
0
18-25 26-30 31-50 50+ Books Entertainment Toys Stationery Gifts
Understanding of customer buying patterns is critical for all retailers. Defining the target customer’s
buying power, age, category preferences and regional influences can positively impact your top-line
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
16. Store Layout
The store layout clearly defines the stocking capacity of the store and hence enables detailed SKU qty ordering.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
17. Category Composition
Once the Broad categories are defined, the finer details need to be planned. The above example summary is based on a
detailed subgroup level plan, both in terms of space allocation and sale projection.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
18. Sub- Category Planning
Within a category, shelf displays are planned product wise and supplier/brand wise. Based on past sales experience or
market figures, a sales projection is created which confirms the inventory requirement and hence the investment required
for the first fill.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
19. Sourcing Strategy
Based on:
Lead-time to store launch
Margin requirement
Stock availability
Working capital availability
Highest Margin Lower Margin Lowest Margin
Wholesaler/
Factory Distributor Retailer
Importer
Longest lead-time Shorter lead-time Shortest lead-time
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
20. Pricing Strategy
• Whether to buy outright or on consignment ?
• Is it better to get the products as a Shop in Shop ?
Purchase
terms
• To what extent will the price be competitive for exclusive products ?
• Should some products carry a promotional discount ?
Pricing
• To what extent can the credit period be renegotiated ?
• Will bigger volumes help in improving the credit period ?
Credit Period
• Will the supplier accept returns of ageing stock ?
• Who will bear logistic cost of returns ?
Returns
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
21. Visual Merchandising
“Visual Merchandising”, the art of attracting patrons with visual cues,
is central to a retailer’s ability to generate sales. Visual
Merchandising got its start at the turn of the century, when
department stores began using theatrical set design and lighting to
create exotic displays. Today, the way the departments are
arranged, the location of the escalators, the lighting--all are
carefully planned to earn the store more sales per square foot.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
22. Store Display Decisions
1. Fixture Types
1. Shelving 1. Value/fashion
image 2. Merchandise
2. Hanging
Presentation Planning
2. Angles and
3. Pegging
sightlines 3. Selecting Fixtures
4. Folding
for Merchandise
3. Vertical color
5. Stacking blocking 4. Visual
6. Dumping Merchandising
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
23. Visual communication
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
24. Planogramming
Inventory Control and merchandise display technique which enables the
retailer to maximize shelf space utilization.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
25. Planogramming Benefits
Improved sales presentations & closure results
Increased consumer appeal of product displays
Better brand awareness through consistency
Improved efficiency of shelf space allocations
Improved financial performance of assortments
Faster, more accurate replenishments
Quicker inventory resets
Much better marketing through targeted displays
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
26. Inventory Management
S2
S2
S1 S3
S1 S3
DC1 DC1
Corporate
Supplier Corporate
Supplier
S4 S4
DC 2
DC 2
S5 S5
S6 S6
Inventory in a PUSH system is managed at the corporate Inventory in a PULL system involves store
level where all buying decisions are made and then pushed requirements to be consolidated at the corporate
to the distribution centers for allocation to stores. level via the DC and then procured.
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
27. Ageing Inventory Liquidation Routes
Transfer to
Tieups with
Instore Return to
stores
Mass
where
Discounting vendor
Discounters
required
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
28. Complete Process Flow
Assortment Assortment
Planning Planning
Realign Mix close
Sourcing
to Best Sellers
Identify Top
Ordering Performers
Delivery to
Monitor Margins
warehouse
Delivery to Store Monitor Sales
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ Business Consulting - All rights reserved
29. Contacts
Aartee Roy Sundeep M
Principal Consultant, Retail Vertical
Senior Director,
Customer Relationships
Website: http://www.kinduz.com/ Website: http://www.kinduz.com/
Email: aartee.roy@kinduz.com Email: sundeep.m@kinduz.com
India Mobile: +91-924685184
India Mobile: +91-9246085180
India Office: +91-40-40165594
India Office: +91-40-40165594
US Phone: +1-312-473-9767
US Phone: + 1-312-473-9767
Category Management & Assortment Planning in the Retail Industry | KINDUZ Business Consulting | http://www.kinduz.com/
© 2009 KINDUZ - All rights reserved 29