Retail assortment planning is the process of deciding which products to carry, expand, reduce, or discontinue. In ecommerce operations, it ensures inventory investment is focused on products that support demand, margin, and operational efficiency.

Retail assortment planning is also referred to as product assortment planning; this article uses “retail assortment planning” consistently.

Retail assortment planning defines the structure and composition of a product catalog. It determines how many SKUs to carry, which categories to emphasize, and how deep or narrow each assortment should be.

In ecommerce, assortment decisions directly influence inventory complexity, working capital requirements, and fulfillment efficiency. Every additional SKU introduces demand uncertainty and operational overhead.

Assortment planning is not only a merchandising exercise. It is an operational discipline that balances customer choice against inventory risk and execution capacity.

For mid-market ecommerce brands, poor assortment discipline is a common root cause of overstock, dead stock, and operational strain.

Retail assortment planning is essential for ecommerce brands and aggregators with expanding catalogs.

Shopify-based brands rely on assortment planning to prevent SKU sprawl as they add variants, bundles, and seasonal products.

Amazon and Walmart 3P sellers must plan assortments carefully, as underperforming SKUs can incur storage fees and degrade account health.

Multichannel ecommerce teams benefit from assortment planning that accounts for channel-specific demand rather than assuming all products perform equally everywhere.

Assortment planning begins with analyzing historical performance by product, category, and channel. Sales velocity, contribution margin, and variability are key inputs.

Products are then segmented by role, such as core revenue drivers, seasonal items, experimental products, or tail SKUs. Each segment receives different inventory and replenishment treatment.

Decisions are made to expand, maintain, reduce, or exit products based on performance and strategic fit. These decisions directly shape future inventory planning and purchasing.

Assortments are reviewed periodically, often quarterly or seasonally, to ensure the catalog reflects current demand rather than legacy decisions.

Inventory turnover highlights whether the assortment is collectively moving or weighed down by slow SKUs.

Sell-through rate reveals which products justify their place in the assortment.

Weeks of supply exposes SKUs that consume disproportionate inventory coverage.

Fill rate helps identify whether core assortment items are being adequately supported.

Together, these metrics prevent assortment growth from eroding inventory efficiency.

Is assortment planning only about adding products?
No. It is equally about removing or scaling down underperforming products.

How often should assortments be reviewed?
Typically quarterly or seasonally, depending on category dynamics.

Should assortments differ by channel?
Yes. Different channels often have distinct demand patterns.

Who owns retail assortment planning?
Often merchandising or product teams, with strong operational input.

What is the biggest risk of poor assortment planning?
Excess inventory tied up in low-performing SKUs.