How to structure in detail the assortment by items that bring the largest share of the gross profit of the shoe store

To optimize the purchase of an assortment or develop a new collection, visualization and detailed statistics of the features of the model range of assortment types are required. In this article, expert SR, Galina Kravchenko, a leading expert on the assortment and forecasting trends of Fashion Consulting Group, talks about how to highlight the key competencies of the company if you structure the assortment in detail.

Assortment optimization: maintaining competencies

The first step in the process of optimizing assortment management is to optimize the assortment structure. To plan inventory for the season and to manage it during the season, it’s important to see priority groups, those who bring the "golden eggs" - 50-60% of gross profit (hereinafter VP). At the same time, the specifics of our industry is such that bare figures will not help to give an accurate sales forecast, for example, for “tractor-mounted slip-ons”.

To optimize the purchase of an assortment or develop a new collection, visualization and detailed statistics of the features of the model range of assortment types are required.

Competences of the company in the assortment structure

What are they - key competencies in the range? Each fashion company gives its own answer to this question. Someone says - shoes, someone - boots, someone - sneakers. But such a faceless description of the types of assortment can be made more descriptive, and then it turns out that the company specializes not just in the assortment of shoes, but, for example, in shoes with increased fullness with a stable heel. And a specialist in the type of “boots” assortment may in fact turn out to be a manufacturer of children's “dutik”.

The catch phrase “art in detail” is justly applied to analyze the assortment of a shoe retail store. Key reason why detailing of each assortment type (for example, 30% of EP) is beneficial is the need to isolate significant (3%, 5%, 10% and more) and insignificant (less than 1%) assortment positions within the rating type of assortment. You seem to divide a large “piece of cake” into small pieces.

Each model has its own name.

It is possible to consider the assortment more closely if you put in its structure a grouping of models by names.

Name Is the detailed model description that the company uses as the lowest level of SKU grouping for analytics. Below is only SKU (stock keeping unit) or SKU - personal product code. The name, as a rule, details the type of assortment and may contain one or more characteristics from the full description of the article.

The set of the most popular characteristics for a detailed description of the type of shoe assortment that are used in the name is the design features of the model, material / composition, sole, heel height, prints / patterns, decor.

So, to identify which particular assortment brings a key share gross margin (EP), not just shoes are considered, but shoes of the opera shoes design (construction of shoes with an open toe) with high heels, stiletto heels, Mary-Jane shoes (model with an ankle strap) with a wide heel of medium height, a model of ballet flats with a thickened tractor sole, etc. .d. These are examples of names in the form of an assortment of “shoes” by variety of design solutions, heel height and heel / sole shape. If the material matters to the company, then this is also indicated in the name. For example: if a company produces low shoes from materials of various qualities and textures, then it is important to consider the combination of design and material composition in the name. Thus, the range of low shoes will be additionally divided into genuine leather oxfords, suede oxfords, faux leather oxfords, textile oxfords, leather loafers, textile slippers, suede slippers, etc.

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Thanks to detailed analysis gross margin by items, one can distinguish groups of items on which the profitability of the business as a whole depends, as well as less significant or, possibly, superfluous in assortment.

In analysis gross margin 3 groups are distinguished by the rating of items:

1. Core Product, total share in EaP - 50-60%;
2. Supplement (extension) Core Product, total share in EaP - 30-40%;
3. Additional assortment, total share in EaP - 10-15%.

In the product line, it looks like this:

Core product - this is what is sold best from season to season in your store. That is, the models that are your calling card. Noun group Core product - these are the key competencies of the fashion brand.

For example, for a shoe store of SPORT CASUAL style these will be slippers, sneakers, trainers.

Add-on (extension) Core Product - These are products that complement the main product line. Continuing the considered example for SPORT CASUAL, we can distinguish oxfords with sneakers, sandals with thickened tractor soles and wide heels, as well as orthopedic sandals, EVA wedge boots, etc. Additional assortment is a subtype of assortment that allows you to make the store space more lively and interesting, which, of course, has a positive effect on sales in general. Continuing the example of a shoe store in the SPORT CASUAL style, we can single out such positions of the additional assortment and sopot as backpacks, bags, belts, hats, glasses. This is a kind of "pie in the bargain" positions, like in McDonald's, which increase the average check.

When optimizing the budget for purchasing or developing a seasonal collection, the largest amount of resources (time and money) should be allocated to the Core Product group of titles. At the same time, maintaining the width of the assortment in the key competencies will allow the company to keep its identity and sales. It is advisable to distribute budget cuts among groups addition (expansion) of Core Product and additional assortment. Moreover, it is possible to impose a greater burden of budget cuts on the group of an additional assortment.

A detailed analysis of sales by detailed assortment groups - names - allows you to:

• accurately highlight the competencies of the company - the "face" of the fashion brand;
• show the share in the inventory for the projection for the next season;
• emphasize the names on which the volume depends gross margin in season;
• highlight the names whose width, when reduced, will not cause damage to commercial indicators.