Assortment Planning System Using Hierarchical Product Segmentation
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Solution Overview
Problem
Current assortment planning methods in retail environments often rely on repetitive and sales-volume-based approaches, failing to effectively match products with customer desires and trends, leading to inefficient product placement and timing.
Innovation Solution
A system and method for defining assortments that utilize a hierarchical list of articles and nodes to assign the right products to stores at the right times, incorporating business types, layout modules, and merchandise hierarchies to optimize product placement and customer targeting.
Engineering Contradictions & Design Principles
Engineering Contradiction Analysis
1Adaptability or versatility
If traditional sales-volume-based assortment planning is used, then implementation simplicity is maintained, but product-customer matching effectiveness deteriorates
Solution Approach 1:
The patent segments the assortment planning process into distinct hierarchical levels (assortment definition, store assignment, time period assignment) and breaks down the product catalog into hierarchical categories. This segmentation allows the system to manage complexity by handling planning decisions at appropriate levels rather than attempting to optimize all parameters simultaneously, thereby improving product-customer matching while maintaining implementability.
Solution Approach 2:
The patent introduces multiple dimensions to the assortment planning system: hierarchical product categories, store characteristics dimensions, and time period dimensions. By adding these dimensions, the system transforms simple sales-volume-based planning into a multi-dimensional optimization framework that considers product attributes, store profiles, and temporal factors, significantly improving product-customer matching effectiveness.
2Loss of time
If repetitive assortment breadth from previous seasons is used, then planning time is reduced, but customer desire alignment deteriorates
Solution Approach 1:
The patent implements preliminary action by pre-defining assortment structures, hierarchical categories, and store assignments before the actual planning period begins. The system prepares template assortments and hierarchical frameworks in advance, which can be quickly adapted to current season requirements. This preliminary structuring reduces planning time while allowing flexibility to align with current customer desires through the hierarchical framework.
Solution Approach 2:
The patent introduces dynamics to the assortment planning system by enabling flexible adjustment of hierarchical categories and store assignments based on current season customer desires and trends. Rather than static repetition of previous assortments, the system allows dynamic reconfiguration at various hierarchical levels, balancing planning efficiency with adaptability to changing customer preferences.
3Productivity
If store volume-based assortment creation is used, then assignment simplicity is maintained, but product placement optimality deteriorates
Solution Approach 1:
The patent applies local quality by assigning different hierarchical product categories to different store types based on their specific characteristics and customer profiles. Rather than uniform assortment assignment, the system tailors product mix at each store level according to local demand patterns, improving product placement precision while maintaining efficiency through the hierarchical framework that guides assignment decisions.
Solution Approach 2:
The patent utilizes parameter changes by adjusting assortment composition based on multiple parameters including store characteristics, product hierarchy levels, and time period factors. The system dynamically modifies assortment parameters to optimize product placement precision for different store contexts while maintaining overall assignment efficiency through standardized hierarchical structures.
4Ease of operation
If sales volume ranking alone is used, then decision simplicity is maintained, but strategic vision representation deteriorates
Solution Approach 1:
The patent segments assortment decisions into hierarchical levels where strategic vision is embedded at upper levels (assortment definition, category selection) and operational simplicity is maintained at lower levels (specific product assignment). This segmentation allows strategic information to be preserved in the hierarchical framework while keeping individual decisions simple through rule-based assignment at each level.
Solution Approach 2:
The patent introduces hierarchical categories and assortment templates as intermediaries between strategic vision and operational decisions. These intermediaries encode strategic information about product mix, category importance, and target customer segments, translating complex strategic requirements into simplified assignment rules that maintain ease of operation while preserving strategic intent.
Data Source
AI summary
A method for planning an assortment including a store comprises receiving a hierarchical list of articles including a plurality of nodes, and assigning a first node in the hierarchical list to the store to define a first group of articles that are assignable to the assortment. A system and program product for planning an assortment including a store are also provided.