The Assortment Strategy Playbook

“Next-generation retail assortment planning will be mastered by creative scientists and scientific artists. With AI as a copilot, assortment planning will continue to become easier and we will see retailers leverage the enormous amounts of collected data into meaningful financial outcomes.”

—IDC Retail Insights

Finding the right mix of localized products that keep up with ever-evolving consumer trends and demands is a challenge that spreadsheets and siloed, disparate systems simply can’t meet. These outdated approaches are neither sustainable nor scalable for long term growth and profitability. Read on to learn:

• How to drive profits with intelligent consumer-centric assortments.
• The key roadblocks to assortment strategy success and how to overcome them.
• How to plan intelligent, consumer-centric assortments that drive profits—the first time

Plus, read on for real-world stories about how Centric Software® customers leverage AI-driven solutions for assortment management success.

• Introduction
• Assortment strategy and planning challenges to watch
• Plan a smarter assortment the first time
• Business benefits with measurable impact
• Increase profitability with assortment strategy and planning
• About Centric Software

Finding the right mix of localized products that keep up with ever-evolving consumer trends and demands is a challenge that outdated tools like spreadsheets and disconnected systems simply can’t solve at scale. Legacy methods lack the agility, granularity and collaboration today’s dynamic retail landscape demands.

Managing diverse product portfolio ranges and architectures across channels, regions and collections requires brands and retailers to maximize agility and adopt innovative assortment planning and strategy solutions to maximize sell-through and minimize reliance on discounting.

In fact, “Next-generation retail assortment planning will be mastered by creative scientists and scientific artists. With AI as a copilot, assortment planning will continue to become easier and we will see retailers leverage the enormous amounts of collected data into meaningful financial outcomes,” says Ananda ‘Andy’ Chakravarty, VP of research for IDC Retail Insights [1]

The following in-depth article outlines how to drive profits with intelligent consumer-centric assortments. Read on to learn how cross-functional collaboration – across merchandising, retail strategy to operations, finance, IT and C-level leadership – enables data-informed assortment planning that reflects the brand, focuses on a bigger picture strategy and delivers curated consumer-focused assortments that fulfill their brand promises while driving profitability.

Assortment Strategy

Assortment strategy is the high-level strategic framework that guides how retailers and brands structure and balance their product offerings across categories, channels, geographies, and consumer segments. It aligns business goals with market demands to define the ideal breadth and depth of assortment, ensuring profitability through the right mix of core, fashion and seasonal products.

Assortment planning

Assortment planning is the process of developing tailored product ranges or collections aligned with financial objectives and merchandise seasonality. The goal is to ensure proper receipt flow supporting timely deliveries to stores, through a balance of creativity and data-driven decisions.

Assortment optimization

Assortment optimization—also referred to as curation—is the science of refining product ranges based on data. Optimization cycles typically occur pre-season and in-season, with Centric tools supporting ongoing mid-season re-optimization to respond quickly to shifting demand or supply chain changes. Merchants evaluate the current assortment to determine what to add, drop, or keep (also known as “keep, drop, swap”). By leveraging real-time insights, teams make more precise decisions to meet consumer demand across all channels and improve sell-through performance.

Before retailers and brands can implement their optimal strategies, it is first essential to call out industry-specific challenges that assortment planning and strategy solutions need to address.

Within assortment strategy & optimization:

Most retailers and brands often operate across a wide network of stores, partners and physical channels. This scale makes data processing extremely complex, time consuming and nearly impossible to manage manually. Reconciling buying decisions becomes challenging and data often arrives too late to inform timely action.

The result? Inaccurate or outdated insights that hinder timely decision-making—especially as the number of stores and outlets grows. In the face of this complexity, many planners resort to standardized assortments across locations rather than tailoring to local market needs. This reduces localization effectiveness and negatively impacts conversion and margins.

In addition, sales data in multiple currencies and fluctuating exchange rates make it even harder to reconcile data quickly, gain insights and accurately track margin. As channels, locations and partners multiply, managing this manually—especially through spreadsheets—becomes virtually impossible.

This complexity is exactly where Centric Software solutions offer distinct advantages that enhance profitability and margins while enabling streamlined retail operations for retailers and brands.

Within assortment planning & buying:

First, inaccurate data leads to the wrong assortments and subsequently, excess inventory, which requires heavy reliance on discounting to clear stock, cutting into profits.
In 2024, IHL reported that the total cost of inventory distortion was projected at $1.7 trillion. Of this estimate, out-of-stocks accounted for $1.2 trillion and overstocks totaled $554 billion[2]. These costly inefficiencies are the direct result of fragmented planning processes and a lack of unified, real-time visibility into assortment performance.

Perhaps HBR [3] sums it up best when it says ‘stock-outs cause walkouts, ’ when consumers cannot find the products they want or expect, they go elsewhere – sometimes for good.

Centric Software’s Assortment Strategy & Planning capabilities within Centric Planning™, directly address the challenges mentioned earlier, enabling retailers and brands to accurately meet consumer demand, boost margins and avoiding discounting.

Centric Planning replaces disconnected spreadsheets and legacy tools with a unified, cloud-native platform that streamlines end-to-end assortment planning and buying. With AI-driven insights and seamless integration with PLM, retailers can confidently plan smarter assortments the first time.

Key capabilities include:

• Placeholder management
• Assortment selection
• Assortment planning and buying
• Sizing the buy
• Pre-season initial allocation

The objective for assortment planning and buying is to select the right product mix for specific markets, channels and locations—and buy the optimal quantities in order to maximize sales, margins and brand consistency. This includes taking a holistic, unified and synchronized approach to planning that considers wholesale, direct-to-consumer (DTC), brick-and-mortar and ecommerce.

The assortment strategy and assortment planning capabilities empower the following processes:

• Assortment strategy/range plan
• Store clustering
• Option in-season analysis
• Item Planning

Best practice assortment planning is highly connected and holistic—bringing together upstream demand planning, merchandise and financial planning, channel plans and space information with downstream variables such as supply chain, retail stores, allocation and warehouses. This integrated approach enables brands and retailers to overcome article placeholder management and disconnected assortment selection.

Assortment strategy and optimization aim to align financial goals with consumer needs through clearly defined KPIs. This includes aligning financial targets to the assortment strategy, grouping store locations based on performance and key attributes, and allocating the right share to each product category or subcategory by defining the ideal product mix.

Store clustering helps teams balance assortment width and depth using intelligent, AI-powered clustering and seasonality modeling. Centric’s AI analyzes store performance, geographic demand patterns and consumer behavior to dynamically group similar locations into clusters. This ensures that the most appropriate mix of products is offered to each cluster—delivering the right option count by channel, location and consumer segment.

Option in-season analysis empowers teams to continuously refine assortments during the season. Supported by Centric’s mid-season re-optimization capabilities, merchants can evaluate current performance to determine which products to keep, drop or swap—helping to respond quickly to shifting demand or supply chain changes.

Item planning can be applied across key items or the broader assortment, with planning cycles varying significantly by product category or sales channel. This flexibility enables teams to tailor plans to unique market dynamics and consumer demand patterns. These processes align to the product lifecycle:

• Pre-season, planning is informed by historical data and AI-driven recommendations.
• In-season, teams execute reorders, revisions and markdowns.
• End-of-season, planning includes clearance decisions.

Founded over 40 years ago, Guess has grown from a denim pioneer into a global lifestyle brand with over 1,600 retail stores worldwide offering apparel and accessories for men, women and children.

Guess operates an omnichannel business model, selling via multiple touchpoints such as e-commerce, retail and 4,000 wholesale customers in Europe.

Before leveraging a planning solution, Guess was using large, very intricate and disconnected spreadsheets. It was experiencing excessive markdowns and slow-moving products between channels.

“We needed a planning tool to have everything in one place and to get alternate views of the same picture. We deal with different currencies, different customer tastes, different trends by country. Having all the geographical variables plus the wide assortment and number of SKUs made the life of the planners here very, very tough,” according to Daniel Botey, Vice President of Global Inventory Management at Guess Europe Sagl.

By adding Centric Planning,  Guess now adapts plans by country, resulting in assortments that meet local needs and market trends. It has greater agility and flexibility to better serve consumers and can also now focus on more strategic goals since planning time and workload have been reduced.

Other benefits include easily updating range or assortment planning all the way up the merchandise plan and having local country managers work directly within the solution to select their preferred collections.

“Without Centric Planning our jobs would be impossible today. It is an enabler for us to get the product to the right channels on time. This is huge for us.”

—Daniel Botey, Vice President of Global Inventory Management, Guess Europe Sagl

Similarly, Ethnicity and Style Union, the two fashion brands by Nexon Omniverse, have adopted Centric PLM™ and Centric Planning, to empower their rapid growth in India’s fashion and apparel market.

Previously, the company lacked detailed and granular planning capabilities, relying on spreadsheets. It had collaboration challenges between planners and buyers, which restricted its ability to scale.

The design sourcing and buying teams create part of the brands’ assortment in-house, while the rest is co-created with vendors in India, Bangladesh and China. Therefore, finding a platform that can link seamlessly with external teams is essential. Today, close to 80% of Style Union and Ethnicity’s vendors/suppliers use the PLM portal to exchange real-time information such as sampling statuses.

“We used to manage assortment planning and MFP using spreadsheets, but this limited us to high-level plans. Centric Planning allows us to get to a more granular level and create data-driven plans and assortments. It will also standardize and rationalize planning as we scale up.”

—Alok Dharadhar, Head of Planning, Analytics & IT, Nexon Omniverse

Assortment planning & buying benefits snapshot

• Build assortments that are aware of selling channel uniqueness
• Automate tasks that were time-consuming
• Share plans and collaborate efficiently to improve decision-making process
• Improve inventory turnover through actionable insights and buy plans

Assortment strategy & optimization benefits snapshot

• Develop a cohesive, balanced product assortment, which not only meets consumers’ demands but also achieves financial objectives and respects capacity constraints
• Reflect the buying strategy by setting a blueprint for a new collection and the overall direction of the collection
• Limit the risk of overbuying/understocking to increase profitability

Retailers and brands can now optimize assortment width, depth and localization to match consumer demand while meeting financial goals.

Build assortments with products consumers really want and accurately balance predicted trending products without overstocking to maximize profitability.

Plus, save time with high-performance omnichannel assortment planning: Process and reconcile data across multiple stores, partners and channels to gain accurate insights to quickly define complex assortments.

Finally, stronger inventory control means reduced markdowns by ensuring a better mix of core and seasonal products.

[1] Ananda Chakravarty, “Worldwide Retail AI-Driven Assortment Planning Solutions 2025 Vendor Assessment” IDC

[2]  IHL, “Fixing Inventory Distortion – Are We There Yet?”

[3] Daniel Corsten and Thomas Gruen, “Stock-Outs Cause Walkouts” HBR

Centric Software® (centricsoftware.com)

From its headquarters in Silicon Valley, Centric Software provides an innovative and AI-enabled product concept-to-commercialization platform for retailers, brands and manufacturers of all sizes. As experts in fashion, luxury, footwear, outdoor, home, food & beverage, cosmetics & personal care as well as multi-category retail, Centric Software delivers best-of-breed solutions to plan, design, develop, source, comply, buy, make, price, allocate, market, sell and replenish products.

• Centric PLM™, the leading PLM solution for fashion, outdoor, footwear and private label, optimizes product execution from ideation to development, sourcing and manufacture, realizing up to 50% improvement in productivity and a 60% decrease in time to market.
• Centric Planning™ is an innovative, cloud-native, AI solution delivering end-to-end planning capabilities to maximize retail and wholesale business performance, including SKU optimization, resulting in an up to 110% increase in margins.
• Centric Pricing & Inventory™ leverages AI to drive margins and boost revenues by up to 18% via price and inventory optimization from pre-season to in-season to season completion.
• Centric Market Intelligence™ is an AI-driven platform delivering insights into consumer trends, competitor offers and pricing to boost competitivity and get closer to the consumer, with an up to 12% increase in average initial price point.
• Centric Visual Boards™ pivot actionable data in a visual-first orientation to ensure robust, consumer-right assortments and product offers, dramatically decreasing assortment development cycle time.
• Centric PXM™, AI-powered product experience management (PXM) encompasses PIM, DAM, content syndication and digital shelf analytics (DSA) to optimize the product commercialization lifecycle resulting in a transformed brand experience. Increase sales channels, boost sell through and drive margins.

Centric Software’s market-driven solutions have the highest user adoption rate, customer satisfaction rate and fastest time to value in the industry. Centric Software has received multiple industry awards and recognition, appearing regularly in world-leading analyst reports and research.

Centric Software is a subsidiary of Dassault Systèmes (Euronext Paris: #13065, DSY.PA), the world leader in 3D design software, 3D digital mock-up and PLM solutions.

Centric Software is a registered trademark of Centric Software, Inc. in the US and other countries. Centric PLM, Centric Planning, Centric Pricing & Inventory, Centric Market Intelligence, Centric Visual Boards and Centric PXM are trademarks of Centric Software, Inc. All third-party trademarks are trademarks of their respective owners.