Assortment and pricing

Assortment management is a complex task. Even when the products you sell are among the most popular on the market, it is not enough simply to buy them from a supplier—or manufacture them—and present them attractively in a store or on a website. If the work stops there, it soon becomes clear that some products were purchased in excess and remain on shelves and in the warehouse for months, while others are critically understocked. The assortment begins to resemble a second-hand shop, and disappointed customers leave. You may also have encountered a situation in which the profit-and-loss report shows a profit, but that profit cannot be distributed or withdrawn because the cash is not actually available—it is tied up in warehouse inventory. Avoiding these problems requires competent assortment and pricing management. The objective is to maximize profit per unit of investment while minimizing working-capital requirements. Assortment management connects purchasing, merchandising, marketing and sales, making these processes coordinated and purposeful. Its primary goal is to satisfy customer demand as fully as possible. The entire chain of actions, beginning with procurement or production, is built around that goal. Drawing on extensive experience, we can provide the following assortment- and pricing-management solutions: • Optimization of inventory and product flows based on identifying and supplying high-demand products. • Allocation of product groups into categories. • Development of a category matrix that meets customer demand as fully as possible, including the positioning of each product within its category. • Optimization of financial management within each product category, including pricing, margin, discounts, their effect on sales velocity and inventory norms. • Development of an assortment policy. • Development of an assortment-management performance system at SKU level and a corresponding reporting system. • Development and implementation of category-level promotional programs, including programs involving suppliers. SKU, or stock keeping unit, is a unique code used in retail to identify a specific product unit in a store or warehouse.