Range planning: Significant enough in the buying and merchandising cycle to send a shiver down the spine of your team when the new season rolls around. But, range planning doesn’t have to be intimidating, after all, it can be a very prudent task once your stylish and financial ducks are in a row. Below are some of the key points you need to keep in mind to perfect your planning.
Your range plan contribution of colours is an important (and fun!) topic to review. If black long-sleeve tops are currently selling, well then you want to ensure you have more of this product coming or you’ll miss a sales opportunity. Likewise, it pays to understand future trends and jump on them… did someone say Bottega Green?
Conversely, you don’t want to be over-optioned in one particular colour. This will become glaringly obvious when you visually review your range plan.
If this does become glaringly obvious, you’ll want to nip this in the bud before the stock lands in-store or goes live. There is nothing worse than that sinking feeling when you see your buy go live and you ask yourself “what was I thinking?”
Similar to the category analysis above, data always wins. Don’t forget to review the supply vs demand by colour to spot opportunities or risks.
2. Pricing & margins
Ah pricing and margins, this is the area we really can’t afford to get wrong, pardon the pun.
Obviously, your retail prices will determine the profit you are going to make by the time the costs are fixed. But a common mistake we’ve seen is to blindly apply a blanket rule and set RRPs based on a target intake margin percentage, but this isn’t always the best advice.
Based on our collective experience, we suggest pricing items based on what your customer thinks the product is worth. If an item is priced too high the customer won’t buy it, simple.
On the other hand, if you think there’s room to increase margin by adjusting the RRP, we generally suggest deciding on the increments you want your prices to increase by. We recommend no less than $10, anything less than this the customer will not understand the difference in value from one item to the next.
It’s also worth running some competitor analysis to understand whether or not your prices will be competitive in the market. The analysis can also form your pricing hierarchy and contain entry and exit price points.
So your range is approved – yipee – don’t spoil it by applying the incorrect size curves. I can’t stress this enough.
Once the buy quantities have been agreed upon, the next step is to break out the totals by size.
How do you apply the correct size curve? If you’re thinking, I normally apply the same curve to all my products (think 2 3 3 2) you could be eroding profit and missing sales at a fast rate.
Ideally, you would use historical data as a base point to identify the demand curve by size, and adjust depending on any opportunities (did XL sell out after two weeks?) and apply this to your new buy.
Here are our recommendations on how best to do this:
- Only analyse full-price sales units so your sales data is not inflated with discounting volumes.
- Only analyse sales units when the size is in stock, otherwise your demand curve will be skewed and you could be missing opportunities in sizes.
- Analyse the demand curve at a granular level, for example by category, store, location and colour.
For the remaining five of the eight key points, read the full article and additional industry tips on perfecting your range plan originally published at stylearcade.com. For more retail insights like this, sign up to Style Arcade’s blog today.
About the authors: Charlotte Mackenzie is an expert in merchandise planning with more than 12 years of experience working at brands such as Topshop, The Iconic and Stylerunner. Formerly a competitive runner, she’s as fast on her feet as she is in putting together next level merchandising recommendations.
Cherie Beslich is a retail professional with more than eight years of experience in fashion and beauty buying. She has worked for brands such as Sephora and The Iconic covering both brick and mortar & eCommerce channels.