The Beginner’s Guide to Assortment Planning for Pop-Up Shops

I originally wrote this post for The Storefront. If you are not familiar with them, they are the place I suggest all my clients check out when doing a popup shop.

Pop-up shops should be part of a robust 360° marketing strategy for any emerging brand. However, for businesses who are just dipping their toes into the physical retail world, selecting what to sell in a brick-and-mortar shop can be a daunting decision. This post is geared toward small businesses who are fired up and ready to activate a pop-up shop, but not sure how to manage inventory and product assortment offline.

Identify the purpose of your pop-up shop
Before you start planning your pop-up, hone in on the goals you want to achieve with it. This will help you pick the right product and structure your marketing efforts. For example, if you are using a pop-up to launch a new collection, you may not want to bring a lot of old sale merchandise. Similarly, if you are hosting a sample sale, keep full-price merchandise at home. Just because you have inventory doesn’t mean you need to put it all out at the same time. Be strategic and base your assortment on the goal of your pop-up shop. Need a place to start? Here are some common pop-up shop goals:

Test new items and collect pre-orders
Move old inventory
Launch new products and collections
Co-brand and develop partnerships
Build relationships with new and existing customers
Evaluate your marketing efforts
Taking stock of your marketing efforts can help in planning inventory. Why? Because you’ll need projections and expectations around how many products you might sell. Start by estimating your demand. If you expect low turnout, you won’t need to produce additional products. The more you know about how your marketing efforts are being targeted, the better you can prepare on the backend. For well-marketed events focused to your niche, expect a 5-20% conversion rate on people attending who will spend.

For this step, ask yourself the following questions:

How many people am I expecting to attend my pop-up shop?
Do I expect cross-over audience from a co-branded partnership?
Do I have a robust list of customers who have purchased from me before?
Managing your inventory
Before you decide to produce new product for your pop-up shop, it’s important to evaluate your existing inventory. Ask yourself:

How much existing product do I have? Is it enough for the space I have allocated? On the smaller side, you might be stocking a shelf in another store for a shop-in-shop. On a larger scale, you might be looking at an empty storefront with 650 square feet of space. Either way, do some quick math in your head to assess your products against your rolling racks, shelves, and other displays. Decide if you have enough product or if you need to rope in another brand collaborator to make use of the space you have. As a rule of thumb, you can expect to fit between 20-30 items (depending on size) for a rolling rack that is 75 inches in length.

Do I have my bestsellers on hand? Your bestsellers are the products that your customers love. Maybe you can reintroduce older bestsellers or market items with special “bestseller” signs or tags during the event. Customers love to see and buy popular items—make them up if you don’t have any!

Can I pull inventory from my ecommerce site or dead stock? Having full-price and sale items together can be enticing for existing and new customers.

Assortment planning
Assortment planning is the process of evaluating your products based on viability of selling. Each season, you’ll get better at creating the products your customers want and pricing them correctly with minimal markdowns. For brand new businesses, however, assortment planning can be challenging. Depending on how much planning you have done in the development of your collection, you might need to rethink your line planning. To make sure you’ve planned effectively, consider the following points:

Fashion vs. basic items. Fashion items are trendy seasonal items that are hot for a short period of time. They are the first to either sell out or be marked down. Basic items are season-less; they are the staples of a brand and rarely get marked down.

Sizing is essential. If you are selling clothing, follow the 1-2-2-1 model per style and scale up from there. This means one small, two mediums, two larges, and one extra large. If you already have selling history on your sizes, use that as a template.

Margin development. Understanding how profitable your products are is essential. Your margin is the net profit on each item after you consider the costs and labor that went into creating it. Have you built in your eventual markdowns and sale pricing? Not all products have to adhere to a 2.5x markup from wholesale to retail. Some might only get a 2x markup and others 3x or even higher. Use your competitive matrix to figure this out.

Round out your offering. If your brand specializes in a particular item (like how Bonobos initially only offered one kind of khakis), then you need to focus on selling that one item. If you are selling a collection, then it’s important to make sure you are offering a wide assortment. In a casual survey of one of my classes at the Fashion Institute of Design & Merchandising, I asked how many tops and bottoms students had in their closets. One student had 13 tops and only 1 pair of bottoms! That doesn’t necessarily mean that all fashion brands should only be producing tops, but think strategically about what your customers need and your value proposition.

There’s a lot to think about when planning a pop-up shop. Often times, success is a combination of marketing, product development, and planning. For a new brand, this can be a lot to digest. Use these tips and your insight into your customers’ needs to create an inventory management and assortment planning strategy that will maximize your profits and keep shoppers coming back for more.