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The Art of Assortment Optimization: 5 Challenges Every Brand and Retailer Faces


Assortment optimization is the art of predicting future sales. To meet consumer demands across all sales channels, multiple teams from planning to design to sourcing need timely, reliable data for informed decision-making.

However, trying to figure out what consumers are most likely to buy—and how to get the products they want in front of them when they are ready to buy—is no simple task.

Let’s explore five common assortment optimization challenges that every retailer has to deal with: 

1. Reliable Data: The Foundation of Assortment Optimization

Assortment optimization heavily relies on accurate and reliable data, including market insights, consumer trends and historical sales data. Without access to this crucial information, retailers make decisions in the dark and are forced into a reactive, firefighting approach instead of proactive planning and execution. Obtaining and analyzing reliable data is essential for making informed decisions that align with market demands and consumer preferences. 

2. Orchestrating Countless Data Points

Assortment optimization involves bringing together hundreds or even thousands of data points, from sales figures to visual product images to financial projections. Planners, merchandisers and buyers need to work together, accessing and understanding this data to create financially sound plans. 

However, managing vast amounts of data and ensuring that all teams can access it in real time can be a daunting challenge. Failing to orchestrate these data points efficiently leads to incomplete information and decision-making based on gut instinct rather than data-driven insights. 

3. Information Living in Offline Systems

Being able to view and assess financial data as well as creative elements and images is crucial for optimal assortment decisions. Many retailers face the problem of having data scattered across various offline systems in different formats. 

Global planning, range planning, merchandising, buying, design and product development teams end up creating unique offline systems to complete their piece of the puzzle that contributes to assortment optimization decisions. Significant time and effort is expended trying to piece together the necessary datasets, resulting in delays and outdated information. Using outdated or irrelevant data can lead to poor decision-making and missed opportunities in the market. 

4. Collaboration and Feedback Across Teams

Cross-functional teams often span different locations and time zones. Effectively collaborating and providing feedback becomes a significant challenge when communication is scattered across various platforms including email, virtual meetings, chats, and project management tools. Important feedback can get lost in the chaos, hindering the assortment and merchandise planning process and resulting in less efficient decision-making.

5. Embracing Agility and Speed

In the fast-paced world of retail, agility and speed are essential to capitalize on emerging trends and seize market opportunities. However, shifting towards a more agile way of working can be a challenge for retailers. 

Often, organizational culture and mindset need to undergo transformation to foster agility and responsiveness. Providing user-friendly tools and processes that encourage agile working can help retailers overcome entrenched habits and accelerate the assortment optimization process. 

Create the Future with Data

Establishing and consolidating reliable, real-time data, building true collaboration and promoting agility are essential to curate profitable assortments that resonate with consumers and drive business success. The good news: it’s not impossible. By addressing these challenges head-on and adopting assortment optimization planning practices and tools, brands and retailers cannot just predict, but create the future using data.