Shoe store assortment: new approaches. Assortment formula VS Assortment matrix

The approaches to the formation of the assortment matrix have changed dramatically. If five years ago, many retail companies were just learning how to build an assortment matrix, nowadays 99% of industry companies already do this without fail. Therefore, today effective retailers are interested not just in the technology of constructing an assortment matrix, but in its optimization and improvement. This article will discuss the unique methodology of the Fashion Consulting Group “Assortment formula”, which allows you to see the assortment “clearly”, allows line employees to look at the assortment from above, as the owner of the company does, and also displays strategic parameters in the assortment groups business.

Galina Kravchenko -

Fashion assortment management expert and business consultant, specializing in the development/purchase of commercial clothing and footwear collections, adapting commercial trends, formalizing style DNA, and category-based assortment management across various sales channels (offline, online, marketplaces, wholesale). https://t.me/galina_krav

Why is it necessary to break assortment into groups?

The relevance of this issue arises when the number of articles becomes so large that it simply becomes impossible to keep them in memory. Then there is a need for generalization, that is, in the allocation of groups of articles on a common basis. Otherwise, sales reports will resemble an endless “sheet” of articles. And if in your business there are not only shoes, but also bags, belts, accessories, then endless multi-line tables will become unreadable and uninformative in practice. In addition, additional manipulations and reloading a large amount of data manually take a lot of time from employees, and, often, the real statistical picture can be distorted due to errors of the “manual drive”. This issue is especially acute for multibrand companies with an assortment of more than 20 brands and / or more 2 000-3 000 products.

Structuring the assortment using the FCG technique allows you to show an accurate portrait of the assortment group that is understandable to all employees. Each row and cell in the assortment matrix is ​​no longer anonymous. The form of the assortment matrix itself becomes a single form of reporting and assortment management in various processes and divisions of the company.

The principles laid down in the FCG “Assortment Formula” methodology allow moving KPI goals of a business to assortment groups. And you need to start from the upper, general level, gradually going down to the bottom (articles, names, types of assortment). It is this approach that allows you to see the range from above, considering each group as a contribution to the total result.

What helps you see the assortment from above?

An effective strategic structure of the assortment consists of seven groupings of models / articles that can be included in a strategic document:

• Commodity group
• Age and gender groups
• Style groups
• Risk groups
• Capsule Themes / Seasonality
• Types of assortment
• Name (specification of assortment type)

Each company builds its correlations and proportions between the assortment groups. Speaking in mathematical language, in the assortment formula, the groups are constants, and the structure indicators of each parameter are variables. Structuring the assortment of shoes according to the above seven principles allows us to optimize its performance indicators, as well as reflect its positioning and key competencies in its structure.

What does each group mean?

1. Product group. Groups items by customer usage and production method. Examples of product groups:

• clothes
• shoes
• bags
• belts
• gloves
• scarves / wraps
• hats
• other leather goods
• bijouterie
• hosiery
• underwear
• swimming clothes
• shoe cosmetics and care products

Accurate and correct selection of product groups allows you to accurately see the development potential of the group, to evaluate the temporary resource of employees to work with each group, and also to accurately identify the procurement budget.

2. Age-sex group (ASG). A group of articles designed for a specific age and gender of the target audience. Key differences between age-sex groups include size ranges, designs, material composition requirements, and color options. The age-sex group in a shoe brand's product range reflects the company's marketing positioning for a specific audience, as it influences the model offerings.

In each of the product groups, the proportions of all gender and age groups are laid. For example: women's, men's, children's shoes; women's bags; leather goods for men and women.

3. Style groups. This group is especially important for multi-brand formats and large shoe stores. Distinguishing lines and styles allows you to demonstrate your company's positioning and present a "portrait" of your product range to customers. This is achieved by grouping shoes by line/style in separate zones. This also helps customers immediately understand how your store differs from others.

4. Seasonality or capsules. This group allows you to lay down the proportion of assortment deliveries during the season and show the characteristics of seasonal demand. As a rule, seasonality groups are used in the mass segment of shoes. For example, in the sales season from August to January, the assortment includes all-season, demi-season and winter shoes. In the sales season from February to July: all-weather, demi-season and summer shoes.

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5. Risk groups. Model designs are grouped according to the predictability of their sales and the potential for inventory accumulation. Typically, three risk groups are distinguished: volume drivers, must-haves, and high risk.

6. Product Type. For footwear, these are the product types specified in GOST: low shoes, boots, shoes, sandals, and boots. However, in practice, shoe companies expand this classification by adding significant product characteristics. For example, low shoes indicate the design features, such as: oxfords, sneakers, trainers, monk shoes. For women's shoes, it's important to indicate the heel height and design, such as: pumps with a 10 cm heel, split heels with a 5 cm heel, Mary Janes (ankle strap design) with a 3 cm heel.

This practice suggests that the traditional table of types of shoes is no longer enough and a more detailed approach, a more detailed grouping are important. The name is a detailed description of the model, which the company uses as the lowest level of grouping of articles. Below is only SKU *, or the article number, personal product code.

The name may contain one or more characteristics from the full description of the article. These characteristics are not randomly identified, but on the basis of a detailed analysis of sales, in order to highlight and develop the competencies of the company. The most popular characteristics for a detailed description of the type of assortment that are used in the name:

• design features of the model;
• top material;
• sole / heel shape;
• size, completeness.

When using the seven principles of assortment structuring using the FCG Methodology “Assortment Formula”, the tabular form of the matrix displays the strategic and operational parameters of the business and their relationship (shares and ratios in KPI indicators) in the assortment.

Strategy and Responsiveness

STRATEGIC BUSINESS PARAMETERS DISPLAYED IN THE RANGE OF ASSORTMENT:

• Assortment offer - Product groups, Sex and age groups;
• Positioning of the company, stylistic DNA of the brand - stylistic groups;
• The degree of innovation / rileatheress of the product and the strategy for working with fashion trends are risk groups;
• Style positioning and difference from competitors - style groups / lines.

OPERATIVE (SEASONAL) BUSINESS PARAMETERS DISPLAYED IN THE RANGE OF ASSORTMENT:

• Features of seasonal demand and its fluctuations - Seasonality groups;
• Features of the model range - Types of assortment and name.

The assortment structuring logic goes into the inventory planning algorithm and the procurement budget:

• 1 stage - agree on indicators for strategic level groups;
• 2 stage - coordinate indicators for tactical level groups.

When planning and managing the assortment in order to look at the store “from above”, it is important to initially plan the inventory, purchase budget and KPI indicators of the top, strategic level: Commodity group, Age and gender groups, Style groups, Risk groups. This allows you to display in the assortment and “digitize” in statistics the key strategic parameters of the business: assortment offer, company positioning, competitive advantages.

Further, it is already necessary to carry out, detail and lower to the operational level these key indicators as seasonal plans for assortment groups: seasons, types, names. This technique is considered in detail during the course of the Fashion Consulting Group “Fashion Assortment Management”.

This article was published in the 151 issue of the print version of the magazine.