Assortment planning in retail is the process of deciding which products to sell, in what quantities, in which stores or channels, and during which time periods, so you meet customer demand without hurting profit. It helps fashion, beauty, and lifestyle retailers grow while keeping inventory lean. When it is done well, every rack, shelf, and product page is intentional, not guesswork.
What is assortment planning?
Assortment planning means choosing the mix of products and variations you will offer in a specific season, location, or channel, and aligning that mix with sales and margin targets. It focuses on balancing breadth (how many categories you carry) and depth (how many options in each category) so the assortment is focused but still interesting for customers.
For fashion retailers, assortment planning usually runs by season. Buyers and merchandisers use trend insights and sales history to decide which styles to buy, which colors and sizes to run, how many units to invest in, and what price ladder to build. The goal is a clear, data-backed range instead of reactive buying.
Why it matters for growth
Assortment planning sits at the center of revenue, margin, and cash flow. A planned assortment reduces overstocks and markdowns because inventory is aligned more closely with demand. It also lowers the risk of stockouts on key products, which protects full-price sales and keeps customers from turning to competitors.
From the shopper’s point of view, good assortment planning means the right mix of products, sizes, colors, and price points is available when and where they want it. That consistent experience is what encourages repeat visits and higher basket sizes, online and in-store.
Breadth, depth, and hierarchy
Breadth and depth are two of the most important levers in any assortment. Breadth is the number of categories or lines you carry, such as denim, dresses, shoes, accessories or beauty. Depth is the variety inside each one, including styles, fits, colors and sizes. Retailers use assortment planning to decide where to be broad, where to be deep, and where to stay very tight.
Most businesses also structure assortments inside a product hierarchy, from department to category to subcategory to SKU. This makes it easier to read performance, build future ranges, and decide which parts of the assortment to grow, shrink, or exit.
The basic assortment planning cycle
Assortment planning usually follows a simple, repeatable cycle that can run by season, quarter, or year:
- Review: Analyze past sales, margin, and inventory by category, style, size, and store to identify winners, underperformers, and gaps.
- Plan: Set category roles, sales and profit targets, and inventory budgets aligned to your overall merchandise and financial plans.
- Build: Choose products, brands, price points, and options, then decide how deep to go in each one.
- Localize: Cluster stores or markets and tailor assortments by climate, space, and demand profile rather than sending the same mix everywhere.
- Trade: In season, track performance, reorder bestsellers where possible, move stock between locations, and mark down slow styles in a controlled way.
Localization and channels
Modern assortments are rarely identical across all locations. Retailers cluster stores by size, region, or customer type and adjust the mix and depth accordingly. A flagship in a major city may carry more fashion-forward styles, while smaller regional stores focus on proven bestsellers and essentials.
Omnichannel adds another layer. E‑commerce can hold a broader and deeper long tail of styles, while physical stores focus on core items, key sizes, and clear storytelling. Assortment planning connects these pieces so customers have a coherent experience wherever they shop.
Data, tools, and where to start
Today, assortment planning is driven by data such as sales history, size and color performance, inventory turnover, and regional demand. Many retailers use planning platforms or analytics tools to test scenarios and optimize assortments by cluster or channel. Smaller businesses can start with clean spreadsheets and a basic set of rules, then add technology as they grow.
For growth, the most important thing is discipline: define clear roles for each category, focus investment on priority areas, tailor assortments to key customer groups, and adjust in-season based on real performance. Even a simple, lean version of assortment planning can quickly improve sell-through and free up cash to reinvest.
