A Founder's Guide to the Retail Cycle | Tory Burch Foundation

Ami Rabheru is an experienced retail strategist and the founder of Retail Huddle, where she advises small businesses on how to start, grow, and scale a successful retail brand. Rabheru joined our webinar series to walk our community through her best practices for small business assortment planning, or the art and science of curating and presenting products in a retail store. Large stores generally have one or more people in the role of buyers, whose primary job is to decide what a story should carry.

As an entrepreneur, you’ll have to step into the assortment planning role yourself. The first step is understanding the basic retail cycle.

WHAT IS THE RETAIL CYCLE?

Assortment planning is a part of the retail buying cycle, which can be broadly organized as Strategy, Plan, Buy, Move, Trade, and Learn. This cycle should happen continuously throughout a season as you consider product life cycles, replace bestsellers, bring in new products, and so on.

Strategy: You’ll review current retail trends, your competition in the market, and customer behavior to develop a strategy. 

Plan: You’ll look ahead at key performance indicators and financial goals to help you plan. 

Buy: When buying goods, you’ll need to allocate budgets and manage various suppliers. Things may move and change as you manage supply chains, logistics, and distribution channels. 

Move: By adjusting stock with markdown and promo management, you’ll encourage the customer to trade up and down your price distribution. 

Trade: A store will almost never have just one season on the floor at a time. You will need to know which lines you are exiting (as in, older stock you have only a few items of) and which new products are coming in. 

Learn: You’ll learn a lot from customer profiles and reviewing how goods have performed in your store, and that will help you adjust your assortment and start the cycle again. Some key performance indicators to watch are sales volume, average sales volume, return rate, customer review, stock sell-through rate and purchase frequency.  

Your point of sale system should be able to calculate and track these values for you.

“When you do proper assortment planning, you’ll identify patterns, you’ll identify behaviors, and you’ll tune in to what your customers really want from you,” she said. “And being known for something is the most powerful way to remain relevant and build brand equity.”

Ready to stock your store? Discover layout techniques and tools for purchasing with the four P’s of retail marketing: product, price, promotion and place.