MustLoveBoutiques

Good merchandising starts with a solid classification plan.  Classifying your inventory is  a way of organizing it into “segments” based on your customer’s end use.  For example a small boutique may have a very simple classification system such as tees, sweaters, blouses, tops, jackets, jeans, pants, skirts, dresses, accessories.   The key is to avoid classifications that are so large their total figures could conceal strong or weak performers in specific types of merchandise.  You also want to avoid classifications that are so small they become meaningless and divert your attention.  Classifications should include like items – apples to apples.

Five things a good classification system allows you do:

• plan sales volume and stock levels based on customer demand
• have the necessary items customers demand at the right price points
• plan a realistic, balance open to buy
• pinpoint areas of sales growth and improved profitability
• reduce inventory duplication
• identify new trends

If you put too much inventory in the wrong classes you’ll take excessive markdowns and/or end up with costly returns to vendors (RTV).  And if you don’t have enough inventory in the right classes you’ll lose sales, or even worse, drive customers to your competitors where you could lose them permanently.

After you plan your classification system you’ll need to plan a style “assortment” (remember color is considered a style) that satisfies your customers demands.  Within in style assortment you also have to think about sizes and price points.

Some stores make the mistake of planning at the vendor level.  Don’t!  Vendors are not classifications!   A vendor that was strong in a class last season or last year might not be in the future.  Plan your assortments at the vendor level.

A good classification system is at the core of a good retail business.  So even though the numbers can seem overwhelming at time, tackle them with gusto and you’ll actually start to enjoy them!