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What is a Range Plan and why is it essential in fashion merchandising?

Range planning. Significant enough in the buying and merchandising cycle to send a shiver down the spine of your team when the new season rolls around. But, range planning doesn’t have to be intimidating, after all, it can be a very prudent task once your stylish and financial ducks are in a row.


Explore the how and why of successful range planning and how it can set your business up to achieve growth and profitability.


The Range Plan is a key stage in the merchandising cycle, as it aligns all departments across the business and cements the direction from a trend and a financial perspective.


A solid range plan sets you and your team in the right direction by ensuring maximum profitability and sell-through, while delivering a cohesive and desirable range for your customer. What more could you ask for?


So, what is a range plan?

A range plan provides a visual overview of all the products you intend to sell. This includes all financial and design elements covering category, pricing, costs and margins and is usually displayed by month or collection drop.

It’s also the first time the buying and merchandising teams see the products in a range alongside each other. Prior to this, the product may have been designed or purchased independently by different people in the team.


The purpose of the range plan is to check that the collection is cohesive: that it’s:

a) fashionable (provides newness), and

b) includes commercial products to drive sales and hit your profit budgets.


Risks to look out for include any obvious clashes in prints or colours, and ensuring there is no cannibalisation across products which could lead to split sales. As in, when your NEW little black dress replaces the steady sales of your core LBD.


Think of range planning as a beautiful dance where the creative side of the brain meets the logical side to present a true work of art - where fashion meets science.

analytical side and creative side of one brain around Style Arcade logo

What information do you include in a range plan?


Well, the lot. Think of it as your bible with all the answers to your burning business questions, because everyone from design, production, marketing, customer service, buying and the merchandising team will refer to it.


For example, you might have questions like...

  1. How many units of that fabulous top are we dropping again?

  2. What date is the summer collection launching?

  3. Why did the flower power pants in December get cancelled?

  4. When can I tell our No.1 VIP the new cashmere is dropping?

The range plan is gospel for the marketing team so they know what products are due for delivery in the next drop, and how much has been invested in each product. Knowing the hero pieces helps marketing to plan campaigns and stories about the new ranges and product launches to ensure a stellar ROI. After all, there’s no point talking about products that don’t have the stock to support the sales messaging.


Depending on the type of business, e.g. multi-brand retailer or wholesaler, the information you include in your range plan will vary slightly but the basics are listed below:

Key Elements of a Range Plan

Historically the range plan has been created using pinboards, spreadsheets or PowerPoint documents that merchandising assistants print and stick up on the wall for the whole team to view. Sound familiar?


Rewind to our junior years, dreading the range review and all the updates required before the next meeting. Cutting, printing and sticking for hours on end, to try and get it perfect, only to have the whole range changed in a matter of minutes. ​🤢​


Given the constant changes to pricing, delivery dates, and cancellations, this old way of ranging means it’s impossible to keep the damn thing up to date. Feeling seen and heard yet?


Pinboard of fashion designs
Alot of work has gone into something that is so out-of-date

Thankfully, these days there are merchandising tools that can do the job for you. Enter The Range Plan by Style Arcade!


A digital range planning tool that can help you and your team visually view your range and make changes with a couple of clicks of a button.


Did I mention it rolls all the financials up for you so you can view these metrics instantly while in the range review meeting? No need to make changes and reconvene next week, it’s all done on the spot including the images… goodbye pinboard, hello signoff!


We have customers that have gained back 20% of their week by using The Range Plan - true story, read about it here.


Why is creating a range plan so important in fashion merchandising?


Why? WHY? Imagine you deliver a range that is 90% black in the middle of summer, or you miss out on triple digit growth just because you didn't complete this key stage... shocking!

confused lady on blue background
Really? It all looks the same…oops!

There are some key topics to look at when reviewing your range plan:


1. Categories

When determining your categories, use your historical data from completing the post-season analysis to decide on an ideal stock contribution for each category by month. Then, sense check your range plan matches this. Next, you also want to keep track of current supply vs demand by category, so you can spot an opportunity when it arises. If footwear starts to take off for example… go out and buy more footwear because they're clearly on trend! Style Arcades software tracks this automatically for you (yep!), easily identifying over and under-performing categories. In less time it takes to sip my morning coffee I know where my opportunities are within my business. Bottoms, tops, and footwear!

bar chart showing top categories
Easily identify over and underperforming categories and spot your opportunities.

Hot Advice: When reviewing your range plan lookout for what your tops vs bottoms ratio is ~ you want this to be roughly 60/40.

2. Colour

Your range plan contribution of colours is an important (and fun!) topic to review. If black long-sleeve tops are currently selling, well then you want to ensure you have more of this product coming or you'll miss a sales opportunity. Likewise, it pays to understand future trends and jump on them… did someone say Bottega Green?

Conversely, you don't want to be over-optioned in one particular colour. This will become glaringly obvious when you visually review your range plan.

If this does become glaringly obvious, you’ll want to nip this in the bud before the stock lands in-store or goes live. There is nothing worse than that sinking feeling when you see your buy go live and you ask yourself “what was I thinking”?!

Similar to the category analysis above, data always wins. Don’t forget to review the supply vs demand by colour to spot opportunities or risks… winner, winner!



3. Fabric (print vs plain)

Similar to checking your colour contributions, you want to check the contribution of your range made up of print vs plain fabrics.

If you know you always sell 60% plain in winter you want to ensure you cover this volume but provide newness in the remaining 40% in terms of prints that work for your brand's aesthetic. Reviewing the range plan like this makes sure you are capitalising on all the sales and profit opportunities.

Leave no avenue unexplored, the data will always guide you to success!



4. Pricing & Margins

Ah pricing and margins, this is the area we really can’t afford to get wrong, pardon the pun. When talking about prices and margins in retail there are a few different types of metrics that it pays to understand:

  • RRPs - recommended retail price, the price the customer will pay for the goods

  • Cost price - the price you pay as the retailer/wholesaler to produce & ship the goods to your warehouse (including all freight & duty costs)

  • Wholesale price - the price a retailer will pay for the goods from a wholesaler

  • Intake margin % - the margin between the cost price and the RRP

  • Wholesale Margin % - the margin between the wholesale price and the RRP

To make it a little easier to understand, I've provided an example below with calculations:


That said, your retail prices will determine the profit you are going to make by the time the costs are fixed. A common mistake we’ve seen is to blindly apply a blanket rule and set RRPs based on a target intake margin %, but this isn’t always the best advice.


Based on our collective experience, we suggest pricing items based on what your customer thinks the product is worth. If an item is priced too high the customer won't buy it, simple.


On the other hand if you think there’s room to increase margin by adjusting the RRP, we generally suggest deciding on the increments you want your prices to increase by. We recommend no less than $10, anything less than this the customer will not understand the difference in value from one item to the next.


It’s also worth running some competitor analysis to understand whether or not your prices will be competitive in the market. The analysis can also form your pricing hierarchy and contain entry and exit price points.


Hot Advice: Don't price products based on hitting an intake margin, price them on what you think the customer will be willing to pay and if you're not making a good enough margin then you might consider canceling the product.

5. Delivery dates

As the saying goes: "If you don't have the stock, you can't sell it."


Tracking delivery times closely is important to hitting your sales budgets, so it’s important to ensure you have your finger on the pulse here.


Delivery dates are often delayed because of quality control issues or delays in shipments. Keeping on top of these delays is important for the merchandising teams because it's their job to adjust the sales budgets given the reduction in stock being delivered. With The Range Plan making these changes is as simple as a quick drag and drop.


The range plan will store the latest delivery date for every product in your range and update the expected total stock by month accordingly.

Style Arcade Range Plan by month

6. Financials

It's the responsibility of the merchandising teams to check that the financials of the range plan will deliver the sales and profit budgets for the month. There are some consistent metrics that should always be monitored in this process:

  • Buy units - total quantity of units being delivered per month

  • Buy @ cost - total value of stock being delivered at cost price

  • Buy @ RRP - total value of stock being delivered at retail price (ex tax)

  • Intake margin % - the margin between the cost price and RRP

  • Average RRP - average retail price of the products being delivered within the month, ensures prices aren't fluctuating too much

  • Average depth - average number of buy units per product, monitored to check volumes aren't too high or low. Too high volumes will lead to unnecessary markdowns, too low volumes lead to missed sales opportunities

The merchandising teams will make recommendations to the buying teams if they think there are tweaks to the range that need to be made based on the financials.


Example: “The intake margin is not high enough, we need to review what is dragging this down and potentially cancel some products”

OR

“The average depth is too low, let's review where we can increase this to optimise sales”


Once the buying and merchandising teams are happy with the range and the financials there is a range review meeting with senior management to get it approved. The beautiful work of art finally gets the tick of approval and we can all relax!


7. Sizing

So your range is approved, yippee, don’t spoil it by applying the incorrect size curves. I can’t stress this enough.


Once the buy quantities have been agreed upon, the next step is to break out the totals by size.


How do you apply the correct size curve? If you’re thinking, I normally apply the same curve to all my products (think 2 3 3 2) you could be eroding profit and missing sales at a fast rate.


Ideally, you would use historical data as a base point to identify the demand curve by size, and adjust depending on any opportunities (did XL sell out after 2 weeks?) and apply this to your new buy.


We won't lie, this can be quite difficult, especially in regular tools such as spreadsheets. The tricky bit is making sure you get an accurate historical demand curve. As you will be looking at sales data by size, this task can become arduous and large in scale quite quickly.


Here's our recommendations on how best to do this:

  • Only analyse full price sales units so your sales data is not inflated with discounting volumes

  • Only analyse sales units when the size is in stock, otherwise your demand curve will be skewed and you could be missing opportunities in sizes

  • Analyse the demand curve at a granular level, for example by category, store, location and colour

Thankfully Style Arcade’s Size Curves function does the hard work for you. In a couple of clicks it can tell you the correct size curve to buy, right down to category, brand or SKU level. Regain hours of your week back, ensure profit growth and did I mention your assistant will love you for it?


8. Location, location, location

There is an allocation process where the merchandising team decides on what products should go where based on store fashionability, channel, location and price.


Not all products should go to all stores because the customer demographic in each can vary so widely. Hint, the better you know your customer, the better chance at success. Best-sellers in one store might not move in others. Think eCommerce vs bricks and mortar stores, and the differences in assortments required.


Due to the fact that the range plan can be so manual, often retailers don't get to visualise their ranges by location. Imagine having to print out 50 range plans for 50 stores and stick them on a wall for everyone to see… ain't nobody got time for that!


Luckily, there's fashion software that can now help with this laborious job meaning you can spend more time perfecting your range.


Lastly, some industry tips on how to perfect your range plan:

  1. Range plans should always be visual - it's about spotting the gaps in categories, colours and fabrications that mean you can make your range even more commercially viable

  2. The product MUST always come first. If you believe in something that strongly, trust your gut!

  3. No 2 products will sell at the exact same rate so fluctuate your buy units to reflect this. Remember that 20% of your products will drive 80% of your sales so what are these products and back them!

  4. Don't underestimate the importance of applying a correct demand size curve - do you really want your margins impacted by up to 30%

  5. Range by location - run your analysis and know your markets to allocate your range by hemisphere, country and store

  6. Use fashion software to help you out, there are range insights that can only be surfaced using digital range planning and when triple-digit growth is concerned switching from manual spreadsheets to software is a no-brainer.


Range planning is a key step in the merchandising cycle but it doesn't have to be manual and labour intensive, and it doesn’t have to leave you shaking on your seventh piccolo. It’s time to take a step out of the dark ages and start planning your range digitally, to save time and effort that was once wasted cutting and pasting.


With the assistance of range planning software you can be confident no opportunity will be missed and your business will be positioned for growth.


Ready to plan your range? Get in touch with one of our super chill team to show you how digital range panning can transform your business and save you time so you have more time to focus on the fun stuff.




About the Authors

Charlotte Mackenzie is an expert in merchandise planning with over 12 years experience in working at brands such as Topshop, The Iconic and Stylerunner. Formerly a competitive runner, she’s as fast on her feet as she is in putting together next level merchandising recommendations.


Cherie Beslich is a retail professional with over 8 years experience in fashion and beauty buying. She has worked for brands such as Sephora and The Iconic covering both both brick and mortar & eCommerce channels.

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