How to form an assortment of shoes so that the ratio of basic and fashion models is optimal

In the previous issue in this section, we wrote about what influences the formation of the optimal assortment of a shoe store, and how to draw up a perfectly balanced assortment matrix. In this issue, SR expert on assortment planning, Emina Ponyatova, examines the concepts of a basic and fashionable shoe assortment and the factors influencing it.

Emina Ponyatova -

expert in the areas of “Assortment planning”, “Analytics and category management” with more than 15 years of experience in the fashion industry. Work experience: buyer and category manager - brands Replay, Pepe Jeans, Hugo Boss, Armani Collezioni, Stefanel, Missoni. Head of Analytical Department - TsentrObuv and Modis. Author and speaker at courses at Fashion Factory, SkillBox and Fashion Advisers schools, consultant and online coach, teacher at the Russian Economic University named after G.V. Plekhanov.

You can identify the basic assortment or assortment that a client associates with your brand by means of analytics, questionnaires or customer surveys.

Let's take a look at the concept of the basic assortment and the factors on the basis of which the selection of models takes place.

The basic assortment, or basic categories, are those categories in the assortment matrix that generate turnover, but at the same time do not have high marginal profit, they have a constant or predicted demand. As a rule, their share is 40-50% of the total number of categories in the assortment.

Rejection of these categories means a loss of customer flow, and their presence supports customer interest and characterizes the format of the store. Prices for goods of such categories should be at the market level, since it is by them that the buyer concludes that the store is “expensive” or “cheap”; the buyer always remembers the prices of these goods and compares them with competitors.

Factors influencing the selection of assortment:

• The first factor is the concept of the brand and its DNA.
• The second factor is demand.
• The third factor is trends and trends.

Let's take a closer look at each of these factors.

Why does brand concept and positioning influence base and fashion? It all depends on the target audience, because when creating a brand, it is necessary to rely not only on production capabilities or USP (unique selling proposition), but also to identify key potential customers.

It is important to know not only WHO WE ARE, but also for WHO WE ARE.

Consider two shoe brands - CONVERSE and LOUBOUTIN.

The first chose a niche and clearly formulated his concept. The basis of the assortment is sports shoes, and every client associates the brand with white textile sneakers, but this does not mean that we will only find them in the store.

That is, the brand's DNA consists of white textile sneakers, and they account for the bulk of the turnover, but depending on the colors of the season, innovative breakthroughs in the industry, collaborations or hot and hot topics, the main or basic assortment is complemented by colors, materials or prints. In the season when neon or ultra-bright colors are relevant, the basic assortment is complemented by new colors in the collection and these are fashion models, or high risk models.

The very name high risk, or fashion model, suggests that the risk of non-realization is high, therefore, we must insure our risks, and this is possible by increasing the margin on such models.

This means that the base and fashion are also the basis for pricing.

The base dictates to us the need for a low markup, since the client compares prices and remembers exactly the prices for the base models. But a low markup does not mean low profits, profits are achieved by a large volume of quantitative sales.

Fashion (high risk) -models serve to attract super-fashionable customers, correspond to trends, but the risk of large balances requires a high margin and the possibility of providing discounts.

Conclusion 1:

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the base is a low margin, minimal discounts, constant demand;

fashion models - high mark-up, maximum discounts and spontaneous demand.

The second brand is the dream of all girls and women! High-heeled shoes with red soles! That is, the DNA of Christian Louboutin is high-heeled shoes with a pointed toe, but even this brand has sneakers, sports shoes and flat models in its collections. Again, first of all, when identifying the basic assortment, we rely on the concept and positioning of the brand, then we analyze and plan the demand.

For a given brand, a fashion or risky assortment can just be sneakers or shoes without a heel, because the client goes to the Louboutin store for the very Pigalle.

But here it is important not to miss the second factor - demand.

If analytics of sales of previous seasons or the current situation shows a decrease in demand for high heels or black, we must quickly make a decision and adjust the base.

It is important to understand that the base should be analyzed and adjusted based on statistics on receipts, sales and discount percentage.

Conclusion 2:

The base needs to be monitored and adjusted based on statistics!

In a pandemic and total quarantine, even a brand like Louboutin is increasing the share of sports shoes and shoes without heels.

Thus, a balanced ratio of base and fashion gives the maximum profit. And now we proceed to analyze the third factor - trends and trends in the fashion world.

The example of the second brand clearly illustrates that today even such high-heel apologists as Christian Louboutin are increasingly offering sneakers, boots and other flat shoes.

An unusual, difficult and crisis year 2020 dictates new trends:

the emphasis on sports, on convenience, on environmental friendliness is reflected in the fashion industry in the form of an increase in the share of eco-materials for the mass market; as opposed to artificiality, a new bucolic style appears, an emphasis on natural materials and a high level of craftsmanship; the importance of androgyny (blurring gender boundaries) is increasing, digitalization and the influence of digital design are manifested in maximalism, bright optical colors and holographic prints.

But again, you need to understand that trends need to be analyzed and applied taking into account the specifics of the market, your target audience and the brand concept.

Conclusion 3:

Trends need to be tracked and studied, not just followed!

Before the pandemic, all experts recommended the following ratio:

• basic assortment - from 50 to 70%;
• fashion (risky) assortment - from 30 to 50%.

But after the general lockdown and the general transition of office and other employees to telecommuting, all the recommendations and rules ceased to be relevant. We must understand that the assortment of a shoe store is not a strict adherence to rules and expert recommendations invented by someone once and for all, it is a flexible model that changes under the influence of external factors, and our main task is to constantly monitor demand and respond to trends.