Assortment Performance Analysis

There are three key inputs into your assortment plan:

1. Your business strategy encompasses your understanding of your customer, your market and
defines what you want your business to be
2. Your financial plan gives you your purchasing budget as well as defines the sales and
profitability goals you need to achieve
3. Historical performance analysis and insight identifies what has worked for you in the past and
provides guidance on what to offer in the future
In this course we will focus on the last of these three and discuss:
• Why we do assortment analysis, and what we are looking for
• Where we can get these insights, including:
o Customer insight reporting
o Social media/social listening
o Store visits and store feedback
o Performance reporting
• Performance analysis tips

Why Do Assortment Performance Analysis?

You naturally have tons of data and other information on the items you have carried
in the past. What can you learn by analyzing past performance, and how will it help
you with future assortment planning?
You are trying to answer these questions:
• What drove our sales?
• What drove our margin or profit?
• What inventory was most productive for us?
• How did our distribution strategy impact performance?
You’re looking to be able to identify and describe the above based on any one or a
combination of these dimensions:
• Product class, subclass or type
• Price tier or price level (e.g., good/better/best)
• By color
• By material
• By Brand
• By Collection
• By purpose or use
And from these answers and insights you will find directional guidance on what to offer in the future –
both the items and their purchase depth - based on:
• What resonated with your customers?

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 • What do you need to avoid in the future?
• What might you be missing in your assortment that your customer would respond to?
• Are there any new distribution options?
We will talk about how to get these insights from your historical performance reporting in more depth
shortly, but there can be a bias to ONLY looking at performance reporting, so let’s first briefly touch on
some of the other sources you can leverage to learn not only what happened, but why your assortment
performed as it did.

Customer Insight Reporting

If your company has a customer loyalty program, you should have access
to data on customer behavior and purchase transactions.
Use this analysis to help you understand who your customer is, what she
wants and how she has responded to your assortment offering in the past.
Then, when it comes to your Assortment Planning, you want the image of
your core customer firmly in place as you define the product attributes
that are most important to her.
This will help you set the right mix targets for product
characteristics including:
• Brand
• Price tier or level
• Color
• Fashionability or trendiness

Social Media / Social Listening

Another place to look for insights on how your customer has
reacted to your assortment in the past is social media. Do
you know what your customers are saying – about both you
and your competitors?
There are now “social listening” tools that aggregate and
report on mentions of both you and your competitors.
Social listening can provide insight into “customer sentiment”
as well as specific reaction to items, collections, styles and so
on.

Store Visits and Store Feedback

Store visits give you feedback on your assortment in two ways.

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 First, by visiting your stores, you get the opportunity to “experience” your
assortment the way your customer does.
Assess how your range is being presented. What draws your focus and what
looks attractive (or not)? Is there anything about the visual presentation that
helps explain the sales performance?
Second, store visits give you another avenue to observe and learn about your
customer. What do they look like? How do they behave in the store?
In addition to visiting stores yourself, do you also have a mechanism for
collecting feedback from store associates?
If so, this is another source of insight into customer behavior and the “why”
behind your assortment performance in the past.
This feedback can also be crucial in learning of any fit or sizing issues that may have impacted sales in
the past.

Performance Reporting
One of the most powerful tools you have in understanding how your customer
responded to your product range is your performance reporting.
In order to identify the strengths and weaknesses in your assortment, you will want
to look at sales, profit and inventory productivity, but not just in total. You want to
compare the performance based on different groupings of product such as:
• By class or subclass
• By Brand
• By attribute
Some of the assortment analytics tools you could employ include:
• Pareto (80/20 Rule) Analysis
• Quadrant Analysis
• Best/Worst Seller Analysis
• Attribute Analysis
For a discussion of these analyses, see Merchant Academy courses AA 02 Pareto (80/20 Rule) Analysis,
AA 03 Quadrant and Best/Worst Seller Analysis and AA 05 Attribute Analysis.
In general, you want to compare how items or groups of items performed vs.
how you planned and bought them. What you are looking for – and should be
developing a point of view on – include:
• Do you need to increase – or decrease – the breadth of the assortment
on offer in any of the categories you’ve defined (e.g., class, sub-class, Brand,
etc.)?
• What mix targets should you set for key attributes (examples: Brand,
color, price point, style, material)?
• Where did you miss opportunities? Where did you sell out too soon or
simply not have the right items for your customer?
• What are your distribution opportunities?

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 • How much do you want to focus on key items in the future?

Performance Analysis Tips

As you dive into performance analysis, keep these things in mind:
• Your data will never be perfect. Given this fact, ask
yourself what you can learn from what you have vs.
focusing on what is missing
• Avoid analysis paralysis and drowning in your data.
Identify some insights, use them to make decisions and
then monitor the results so that you can adjust and
improve over time
And finally, the goal of all of your performance analysis is to be able to tell the “story” of your
assortment. You should be able to summarize:
• Your assortment’s historical strengths:
o Key styles
o Key items
o Sales drivers
o Profit drivers
o Image drivers
• Your assortment’s historical weaknesses:
o What to exit or minimize
• And any gaps to fill in your assortment:
o White space to fill
o What to test or try out
Once you can tell the “story” of your assortment, you’re ready to plan for and develop what you want to
offer in the future.

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