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Assortment optimization plays an important role in sustainable retailing

December 27th 2019

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When talking about the benefits of assortment optimization we usually focus on sales lift, enhanced profit and improved customer satisfaction but omit sustainability aspect. Yet assortment optimization is one of the key tools towards more sustainable retailing and going towards 2020, sustainability should be in the core of every retailer’s strategy.

Sustainability strategy can be executed on many levels. Meaningful improvements can be done through choices regarding, for example, the premises, logistics, supply chain waste and voluntary carbon offsets. However, especially in the context of food retailing where best before and use by dates dictate the shelf life, we should keep assortment management and wastage in the spotlight.

The natural first step towards more sustainable assortment planning is to adjust and optimize the assortment to meet the demand. When shelf time of products is short and replenishment system caters the demand without causing excess wastage, the baseline is covered. However, for modern retail localized and competitive assortments are crucial and that requires deeper assortments which cover the latest food trends, special diets and vast selection of specialty and novelty products. And this is where assortment planning has a vital role: to help keep the assortment compelling and healthy while pointing out the slow movers, which should get delisted.

This is where assortment planning has a vital role: to help keep the assortment compelling and healthy while pointing out the slow movers, which should get delisted.

Having an assortment that satisfies, even delights customers making them return time after time is fundamental for business. Having an assortment that also allows to keep wastage at minimum and to take sustainability into consideration is critical for the future. In addition to wastage, there are other factors that can help form more sustainable assortments and those are product attributes.

Including product attributes like organic or fair-trade, recyclable, eco-friendly or carbon neutral to the assortment planning we can get better overview of what our assortment looks like and utilizing these attributes efficiently, it is also possible to set and measure sustainability targets. When sustainability attributes are included already in the planning phase, it is easier to communicate these attributes to the consumers and help them make more sustainable choices.

When sustainability attributes are included already in the planning phase, it is easier to communicate these attributes to the consumers and help them make more sustainable choices.

Being able to rank suppliers based on how well they meet company’s sustainability criteria might be essential for some retail organizations when implementing their sustainability strategy. These rankings could then be taken into account in planning and optimizing the assortment and favor the suppliers that best fit to company’s sustainability agenda.

Let us tell you how A² Assortment Planning could help you and your consumers to make more sustainable choices.

Find out here!