Drawing assortment matrix
One of the features of the development of any competitive market is the reduction of marginal income received from the sale of one unit of product or service. Retail is a great illustration of this phenomenon. With the increase in the number of stores, price competition inevitably develops, which leads to a significant decrease in the profits of each of them. Against this background, many entrepreneurs who could not make the restructuring of their business under the new realities, making it effective, simply have to leave the market, giving way to more far-sighted.
Assortment policy is the thing on which the prosperity of any store depends. Even if an entrepreneur has a well-functioning HR management system, experienced accountants and talented administrators, they will not be able to have the same effect on the end result as thoughtful work with the assortment.
Work “in the old way”, when the assortment is formed and maintained on an intuitive level, still has the right to life, but if you want to build a highly profitable, growing business, then you cannot do without analytics and planning in the field of assortment management.
A well-planned assortment will allow you to:
increase gross profit;
increase the average amount of the check;
stimulate the growth of customer loyalty and, as a result, in the medium term, an increase in the number of checks per day;
efficient use of cash. It is no secret that retail chains have not invested their money in goods for a long time – it is all in the interest-free commodity credit offered by suppliers. With their own money, networks open new stores and buy equipment.
Assortment matrices, planograms
Drawing up an assortment matrix Almost always, when it comes to assortment, this word means “assortment matrix”. The assortment matrix is a list of all stock items (SKU – stock keeping unit) presented in a store for sale. On its basis, planograms are subsequently compiled, which are used for displaying goods on the shelves.
As a rule, its own assortment matrix should be compiled for each product group from the store classifier. Firstly, it is convenient, and secondly, products from different assortment groups may have different consumer properties and have different delivery conditions, which will not allow applying a single assortment building model to them.
For example, we will create an assortment matrix for a grocery store in the “milk preservation” group. Before compiling it, we will need the following input:
the number of SKUs in which the group should be represented. It is calculated using the formula: length of the shelf space (m) / average width 1 SKU. In our case, 770 mm is allocated for the dairy preservation group, and the average width is SKU = 76 mm. Total: 770 mm / 76 mm = 10 SKU;
The usual picture for any store when generating sales reports for a long period of time, when for a store with a capacity of 10,000 SKU a report of 30,000 falls out. This means that the assortment has been constantly changing during this time. From this, in most cases, it is necessary to move away.
Many people use only ABC analysis when building assortment matrices, cutting off the assortment from the bottom to the required number of SKUs. This approach has only one plus – speed. In the minuses, there is a decrease in turnover in the group and negative buyers.