While retailers are behaving more like technology companies, technology companies are moving further into commerce. That’s what Neeraj Teckchandani, CEO of Apparel Group, says about the next decade of retail in a 2026 World Economic Forum piece.
In the TikTok era, according to Retail Dive, the average viral trend lasts 5 to 10 days before attention shifts, but getting a product from concept to shelf traditionally takes 6 to 24 months.
Yet, per McKinsey’s research, merchandising teams still spend 40% of their time consolidating data across siloed systems and reconciling spreadsheets. Fewer than 10% use AI to assist with more than half of their merchandising decisions.
A merchandise planning solution gives you a clearer view of demand and inventory, so as Paul Mazur posits, the right merchandise is in the right quantities, at the right time, at the right price, and in the right place.
What is merchandise planning software?
Merchandise planning software covers the planning and analysis of pre- and in-season merchandising strategy, including sales forecasting, inventory receipts, margin, and stock-level projections.
The tool uses data like sales history, demand forecasts, inventory levels, pricing, margins, and seasonality. You use it to build assortment plans, manage open-to-buy budgets, allocate stock across channels, and adjust plans as demand changes.
Merchandise planning software vs. inventory management software
A merchandise planning tool sits upstream of an inventory management system (IMS). The former answers the pre-season question of what you should buy, in what quantity, at what margin, and for which channels.
Inventory management software sits downstream, tracking what stock exists right now, where it is, and how it’s moving.
Shopify POS, for instance, gives you real-time visibility into stock levels across channels, warehouses, and retail locations. Your inventory syncs in real time across social channels and marketplaces, and automatically updates stock levels as products move across locations. That live data then feeds back into merchandise planning tools as the planners need to re-forecast and adjust open-to-buy mid-season.
Merchandise planning software vs. assortment planning software
Where merchandise planning sets the financial framework of total inventory budget, margin targets, and receipt flow by period, assortment planning works within that framework to determine the product mix.
The two systems have to reconcile. While assortment planning determines the product mix, merchandise planning determines whether that mix is financially viable. So, without both working together, a well-curated assortment can still miss margin targets or leave cash tied up in inventory that doesn’t move.
On Shopify, product variants, collections, and location-level inventory all sync in real time across every sales channel. Your merchandising analytics can then surface which colorway is stalling in one region but moving in another, or which product consistently appears in the same basket.
The key features to look for in merchandise planning software
The features below are mapped to Gartner’s mandatory criteria for retail merchandise financial planning (MFP) solutions. The core features point to four key jobs: measure performance, forecast demand, plan inventory receipts, and reconcile financial plans with assortment plans.
For each feature, you’ll find a set of questions to help you shortlist vendors as you evaluate a retail planning solution.
1. Merchandising KPI tracking
Merchandise planning software should calculate core retail key performance indicators (KPIs), including cost of goods sold (COGS), gross margin, markdown costs, and inventory levels.
- Does the platform calculate COGS and gross margin at the SKU, category, and channel level?
- Can it track markdown impact on margin in real time?
- Does it show inventory levels by location?
- Can planners compare planned performance against sales, margin, and stock levels?
In Shopify Analytics, you can natively report on COGS, gross profit, gross margin, discounts, net sales, inventory units, and inventory value. Shopify profit reports also show net sales, cost, gross margin, and gross profit by product variant SKU.
For retailers using Shopify POS, inventory can sync in real time across POS, online store, and sales channels, with tools to track stock, receive shipments, transfer items, and adjust quantities across locations.
Decathlon, for example, used ShopifyQL Notebooks to query, visualize, and compare ecommerce performance data in a live environment instead of relying on static spreadsheet exports. The brand reported 50% faster reporting and 60% faster data analysis through ready-to-use templates.
“Being able to quickly query things, see trends, visualize the data, and clear up questions is potentially the most valuable aspect of [ShopifyQL] Notebooks,” says Tony Leon, chief technology officer.
2. Accurate demand forecasts
Merchandise planning software should forecast sales from both internal data (e.g., historical sales, inventory levels, and sell-through rates) and external signals (e.g., market trends, seasonality, and competitor activity).
- Can the tool forecast customer demand by SKU, category, location, channel, and season?
- Does it use historical sales, inventory levels, pricing, promotions, and returns?
- Can it account for external signals, such as seasonality, local events, weather, or market trends?
- Can planners compare forecasted demand against sales?
- Does the forecast update as new sales and inventory data come in?
For merchandise planning, Shopify is the source of the commercial data. Shopify supports demand forecasting with the sales, inventory, and marketing data planners need. Shopify reports can help you track sales amounts and order trends, including total sales by order, sales over time, inventory sold daily by product, and sales attributed to marketing.
“We use up to three years of data, averaged at the product level, along with lead time as the basis of the demand forecasting formula,” says Sissy McQuaig, the COO of Industry West.
Sidekick can also recommend items to reorder based on sales data and draft the purchase order automatically.
Pro tip: Read the full guide on how AI demand forecasting works and why it’s where the retail industry is headed.
3. Open-to-buy management
Merchandise planning software should calculate how much inventory the business can afford to buy in a given period. This is called open-to-buy planning (OTB).
OTB keeps buying decisions tied to sales targets, current stock, planned receipts, markdowns, and available budget. The tool should also plan receipts; the inventory expected to arrive from suppliers, by period, category, location, and channel.
- Does the platform calculate OTB by category, department, channel, and location?
- Can it update OTB automatically as sales and receipts are recorded?
- Does it account for planned markdowns, promotions, and transfers in the OTB calculation?
- Can planners run scenario models against the same OTB budget?
On Shopify, inventory syncs automatically as products are received, sold, returned, or exchanged across online and in-person channels. While Shopify isn’t a full open-to-buy planning system, it can still provide the purchase order, supplier, cost, incoming inventory, and location data that merchandise planning tools need to compare planned receipts against inventory flow.
4. Assortment and financial plan reconciliation
Merchandise planning software should keep the financial plan and the assortment plan in sync throughout the season. The financial plan sets margin targets and inventory budgets, and in conjunction, the assortment plan determines which products, in which sizes, colors, price tiers, and locations, will deliver against those targets.
- Does the platform reconcile assortment decisions against the financial plan at the category, channel, and location level?
- Can planners see when an assortment buy exceeds OTB in real time?
- Does it flag margin risk when assortment choices diverge from financial targets?
- Can it carry forward historical assortment and sales data to seed the next season’s plan?
On Shopify, assortment reconciliation starts with how products are structured. You can manage products by variant, such as size, color, wash, inseam, or fit, then connect that product structure to inventory, location, and channel performance.
PAIGE, before moving to Shopify, ran stores and ecommerce on separate systems. Their teams worked with different KPIs, tools, and definitions of success. “Every initiative took 18 to 24 months to build,” says Tawny Brown, SVP of omnichannel at PAIGE, “and by the time it launched, customer expectations had already moved.”
The brand’s previous platform also made it difficult to unify product assortments on a single page.
So for denim, for example, that meant shoppers couldn’t easily see every wash and inseam within the same fit. After unifying on Shopify, inventory accuracy improved from 85% to 98%, giving planning teams a reliable data foundation across over 20 store locations and online sales channels.
How does Shopify support merchandise planning software?
Shopify itself isn’t a merchandise planning system. And while it doesn’t calculate OTB, build assortment plans, or run financial reconciliation, what it does hold is the commercial data that planning tools need to do those things accurately.
Shopify’s unified commerce data model combines commerce data in one place, governed by one logic.
In fact, brands using Shopify’s unified commerce capabilities report up to 150% omnichannel GMV growth and 22% lower total cost of ownership.
Here’s how else Shopify’s capabilities support merchandising planning tools:
Shopify Flow can automate inventory responses
Merchandise planning software helps teams decide what should happen next; Shopify Flow can help automate some of the operational steps that follow.
Shopify Flow’s inventory and merchandising workflows include low-stock notifications, hiding and republishing products based on inventory level, merchandising low-stock products, and getting notified when demand increases for out-of-stock products.
For example, Cozykids used Shopify Flow to reduce manual stock monitoring across a catalog of 6,000 to 7,000 products. The brand set up automated notifications when inventory dropped below a set threshold, so the marketing team knew when to stop promoting low-stock products and shift attention elsewhere.
They also used Flow to hide products that were out of stock, limited-run, or unlikely to be restocked.
“You can automate, accelerate, and it just works. You can spend your time more efficiently,” says Panos Voulgaris, creative director of Cozykids.
Shopify APIs and app network can connect planning tools with execution
Shopify’s Admin API allows your developers to add features and customize the Shopify experience.
For merchandise planning, that means purpose-built MFP platforms like Toolio or o9 can pull orders, inventory, product hierarchy, and channel data directly into the planning environment without manual exports or middleware.
Menswear brand Mack Weldon, for example, runs Shopify alongside Looker for analytics, Snowplow for data, and Toolio for merchandise planning. Shopify acts as the commerce data layer and Toolio as the planning layer on top.
For retailers also connecting to ERP systems, Shopify’s Global ERP Program offers certified connectors for Microsoft Dynamics 365, NetSuite, and Acumatica.
Shopify B2B supports planning across wholesale and DTC
For retailers running both wholesale and direct to consumer (DTC), separate systems mean separate demand signals, which makes accurate planning nearly impossible. And as of April 2026, Shopify extended its native business-to-business (B2B) features to merchants on every plan, giving them company profiles, custom catalogs, volume discounts, and payment terms—all running from one unified admin alongside their DTC store.
“If B2B and DTC are part of the same business, the software should work that way too,” says Samir Pradhan, VP of product at Shopify.
This is especially relevant because, according to Shopify’s data, store owners using Shopify B2B see up to a 4.1 times increase in reorder frequency compared to DTC orders, up to a 33% increase in self-serve orders within six months, and up to a 20% increase in reorder frequency across the platform.
“Making commerce better for everyone means removing the artificial lines between how merchants sell,” says Samir.
Merchandise planning software FAQ
What is merchandise planning?
Merchandise planning is the retail planning process of deciding what products to buy, how much inventory to carry, when stock should arrive, and how those decisions support sales, margin, and inventory goals.
The process typically includes pre-season planning, demand forecasts, receipt plans, markdown assumptions, and an assortment strategy built around what consumers are likely to buy.
What is a merchandising tool?
A merchandising tool helps retailers plan, manage, or improve how products are bought, displayed, promoted, and sold. Depending on the tool, it may support assortment planning, inventory analysis, product recommendations, promotional activities, or storefront merchandising.
Some tools use machine learning (ML) to surface valuable insights, so teams can make better decisions about pricing, placement, replenishment, and profitability.
What is the first entry to adjust merchandise inventory?
In retail operations, the first step is often to verify the actual stock count, then record an inventory adjustment so the system reflects what is physically available. An accurate inventory system helps retailers control stock, reduce lost sales, and improve customer satisfaction.
What are the five rights of merchandising?
Paul Mazur’s five rights of merchandising are the right merchandise, in the right quantities, at the right time, at the right price, and in the right place.
For merchandise planning, the point is to create assortments that meet demand, support financial goals, and give retailers the ability to achieve stronger sell-through with fewer lost sales.
