Retail Strategy Group | The Merchant Life’s Post

The System Always Kicks Back. Here’s your science lesson of the day: In Chemistry there is such a thing as an “Equilibrium Law.” It is more commonly referred to as Le Chatelier’s principle, named after the French chemist Henry Louie Le Chatelier. To describe the principle in layman’s terms: If you disturb a system, the system always kicks back. Turns out that in retail, processes and systems also kick back. Consider this scenario: Brands have an assortment comprised of seasonless or core/basic items and new fashion items. The seasonless stuff is evergreen in the assortment, while the fashion stuff catches the eye of the customer. So, if fashion is what draws attention, then brands go all in on fashion. But, this leads to overdevelopment and over-assorting products. This in turn leads to excess inventory, markdowns and losing out on margin. Eventually, the system kicks back. SKU’s are cut, open-to-buy budgets are reduced, and inventories are right-sized. However, the assortments are scaled back to the point where they start to be perceived as bland and boring. The system kicks back again. Time to ramp up the fashion part of the assortment to gain relevance. You can see the conundrum here. Read more about this and how brands can do better by heading over to our blog. The link is located in the comments. #retail #processinnovation #innovation #processimprovement #merchandising

Liza Amlani

Retail Consultant and Trusted Advisor | Merchandising | Product Creation | Sustainability | Corporate Retail Strategy | Speed to Market | Supply Chain | Board Member | RETHINK Retail Global Expert

4mo

Creating a dynamic assortment means having flexibility in seasonless vs. fashion. Remember the 80/20 rule? That can't fly anymore. Also that rule was made up and passed down from merchant to merchant 😏

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