Merchandising, Assortment Planning and Visual Merchandising
Merchandising decides what to buy and how much; visual merchandising decides how it is shown so it sells itself. The exam tests assortment structure, planograms and display principles with practical store examples.
Assortment planning
- Breadth = number of categories; depth = SKUs or variants within a category.
- Category roles: destination, routine, seasonal, convenience.
- SKU rationalisation: rank by sales and margin using ABC analysis; A lines get prime space, C lines get minimum space or exit.
- Sell-through = units sold / units received x 100. Low sell-through before season end signals markdown.
Visual merchandising rules
- Decompression zone: first 1 to 1.5 m inside the entrance; keep it light, never block it with fixtures.
- Strike zone: roughly waist to eye level (about 120-160 cm) where hands and eyes land; place high-margin items there.
- Power wall: the wall facing the entrance, used for the season's statement.
- Colour blocking, rule of thirds, pyramid and repetition for tidy, scannable displays.
- Planogram: a diagram fixing each SKU to a position on a fixture; compliance is audited.
- Signage and POP must show price, offer and size clearly, and must match the POS price.
Worked example
A store carries 5 categories with an average of 12 SKUs each. Breadth = 5; depth = 12; total SKUs = 5 x 12 = 60. If the planogram allows 8 facings per SKU and the fixture holds 480 facings, 60 x 8 = 480, so the fixture is exactly filled. Space planning and assortment maths must agree.
Traps
- Confusing breadth with depth.
- Confusing a planogram (SKU positions) with a store layout (fixture and aisle plan).
- Blocking the decompression zone with a dump bin.
- Displaying a price that differs from the POS, which becomes a consumer complaint.