{"id":3133,"date":"2024-06-23T22:14:51","date_gmt":"2024-06-24T02:14:51","guid":{"rendered":"https:\/\/www.algo.com\/?p=3133"},"modified":"2025-02-12T17:59:35","modified_gmt":"2025-02-12T22:59:35","slug":"merchandise-planning","status":"publish","type":"post","link":"https:\/\/www.algo.com\/es\/blog\/merchandise-planning\/","title":{"rendered":"Merchandise Planning: What It Is and How to Do It Like an Expert\u00a0"},"content":{"rendered":"<p><span style=\"font-weight: 400;\">When it comes to business planning, the end goal is to improve your business and increase your return on investment. For retail businesses specifically, <\/span><span style=\"font-weight: 400;\">merchandise planning<\/span><span style=\"font-weight: 400;\"> is yet another crucial process to plan out, as there are many opportunities to lose money if you don\u2019t have a solid foundation. While managing merchandise can look different for different retailers, knowing the basics and evaluating where your business stands are essential.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">What Is Merchandise Planning in Retail?<\/span><span style=\"font-weight: 400;\">\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Merchandise planning<\/span><span style=\"font-weight: 400;\"> is a process and an approach to aligning your inventory with consumer demand. Business owners need to be intentional about their product selections, orders, and presentation. There are many moving parts to create a solid foundation for each season. To maximize your profits, you will want to:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Have merchandise on hand that is in demand and desirable.<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Have merchandise that will sell quickly and not sit on shelves for months.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Manage your inventory well and thoroughly.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Pay attention to past sales trends, current sales trends, and projected sales trends.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Have the right number of products on hand.\u00a0<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Price your products at the right price.\u00a0<\/span><\/li>\n<\/ul>\n<h2><span style=\"font-weight: 400;\">Why Is It Important?\u00a0<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Before jumping into how to set up your merchandise plan correctly, it\u2019s important to know what is at stake. While making a good profit and decreasing the amount of money wasted on products are key reasons to set processes in place, they\u2019re not the only reasons.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Merchandise planning<\/span><span style=\"font-weight: 400;\"> can affect the overall customer experience. If a customer walks into your retail location and doesn\u2019t find what they\u2019re looking for, you risk losing that customer to another competitor. Money aside, as a business, it is just as important to make sure you meet your customers\u2019 needs, and having quality and sufficient inventory is part of that.\u00a0<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">Why It Can Be So Difficult<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">A big part of <\/span><span style=\"font-weight: 400;\">merchandise planning <\/span><span style=\"font-weight: 400;\">does involve crunching some numbers and basing sales predictions on trends. However, it\u2019s important to remember that predictions are not guaranteed, and it can be tough to anticipate market and economic changes accurately.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Beyond the numbers, you have to know your products and consumers well enough to find the perfect product at the right time. Strategizing your inventory is the ultimate balancing game. There\u2019s no one-size-fits-all roadmap. <a href=\"https:\/\/www.algo.com\/es\/industry\/retail\/\">Retail planning<\/a> can vary greatly across different sized retailers, making it hard to know what goals you should have compared to other business owners.<\/span><\/p>\n<h2><span style=\"font-weight: 400;\">The Process: How to Do It Right<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Now that you know <\/span><span style=\"font-weight: 400;\">what merchandising planning in retail is<\/span><span style=\"font-weight: 400;\">, it\u2019s time to start planning. As discussed, the small details of merchandise planning can look different for everyone. At a base level, though, the approach can be divided into four critical steps:\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">1. Forecasting\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">This is where your predictions for your upcoming season will come into play. You will need to start with demand forecasting, which is where you will look at sales history and trends to <a href=\"https:\/\/www.algo.com\/es\/products\/demand-forecasting\/\">predict upcoming demand<\/a> for different products you sell. Gather the following information to get started:\u00a0<\/span><\/p>\n<ul>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Previous seasons\u2019 sales numbers<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Previous seasons\u2019 business revenue<\/span><\/li>\n<li style=\"font-weight: 400;\" aria-level=\"1\"><span style=\"font-weight: 400;\">Previous seasons\u2019 revenue for each product\u00a0<\/span><\/li>\n<\/ul>\n<p><span style=\"font-weight: 400;\">Once you have all the relevant data, first evaluate what did and didn\u2019t work well in the past. If you launched a new product that hasn\u2019t been selling well, it\u2019s time to stop investing further in it. <\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><span style=\"font-weight: 400;\">On the same note, consider if your inventory needs new products. Then, once you have done some reflecting on your business\u2019s merchandise, start comparing your numbers to general market surveys and consumer predictions to see where your merchandise stands in relation to those predictions. This is where consulting a <\/span><a href=\"https:\/\/www.algo.com\/es\/about\/\"><span style=\"font-weight: 400;\">supply chain expert<\/span><\/a><span style=\"font-weight: 400;\"> can be helpful.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">After demand forecasting, it\u2019s time to forecast your sales. Estimate the bare minimum number of products you will need in your inventory to keep up with the predicted demand. Also, evaluate pricing at this stage and consider what worked well in the past.\u00a0<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">2. Decide On a Budget and Order Merchandise<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Now that you have some forecasting for your business, it\u2019s time to make the tough decisions and decide what investments you want to make. Whether you want to order the bare minimum of products or prepare for a potential increase in demand, you will need to form a budget and put your plan into action.<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">3. Assortment Planning\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Presentation of merchandise is just as crucial a step as deciding what merchandise to order. Presentation is what will help consumers find your products and help them sell. Assortment planning is how products are arranged based on categories, which play a big role in the presentation.\u00a0<\/span><\/p>\n<p><span style=\"font-weight: 400;\">Products should be properly organized and separated into appropriate and optimized categories. A clothing boutique may organize their clothing into categories like shirts and blouses, dresses, dresses, etc. Subcategories may include colors, sizing, and pricing. You want to sort things for easy browsing further.<\/span><span style=\"font-weight: 400;\"><br \/>\n<\/span><\/p>\n<h3><span style=\"font-weight: 400;\">4. Maintain Merchandise and Make Adjustments\u00a0<\/span><\/h3>\n<p><span style=\"font-weight: 400;\">Now that you\u2019ve laid out a plan, it\u2019s essential to keep an eye on your inventory throughout the year and make adjustments. The number one goal is to not run out of anything, so always be sure to order more products before you get too close to going out of stock. Everyone has different policies for when to order more stock, so there is no set-in-stone method. Your business will do great as long as you know your merchandise and monitor it routinely through daily, weekly, and monthly reports.\u00a0<\/span><\/p>\n<p>&nbsp;<\/p>\n<h2><span style=\"font-weight: 400;\">Maximize Your <\/span><span style=\"font-weight: 400;\">Merchandise Planning <\/span><span style=\"font-weight: 400;\">with Algo<\/span><\/h2>\n<p><span style=\"font-weight: 400;\">Are you looking for help maximizing your return on investment with professional merchandise planning? Look no further. <\/span><a href=\"https:\/\/www.algo.com\/es\/contact\/\"><span style=\"font-weight: 400;\">Contact Algo<\/span><\/a><span style=\"font-weight: 400;\"> today and get started with a free demo! <\/span><\/p>","protected":false},"excerpt":{"rendered":"<p>When it comes to business planning, the end goal is [&hellip;]<\/p>","protected":false},"author":3,"featured_media":8615,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"content-type":"","inline_featured_image":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"footnotes":""},"categories":[22],"tags":[],"algo_solutions":[],"class_list":["post-3133","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-blog"],"acf":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v26.6 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Merchandise Planning: What It Is and How to Do It Like an Expert<\/title>\n<meta name=\"description\" content=\"Improve your retail business and increase ROI with effective merchandise planning. 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