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How to Create a Winning Product Assortment in Retail

Merchandise is one of the most important things to get right in retail and a product assortment. It requires both an art and a science.

It’s imperative to have data and be able to understand your customers, as well as have a little bit of intuition into what they want.

Here’s a quick overview of assortment planning and optimization, which will hopefully help make the process easier for your retail business.

product assortment

What does product assortment mean?

Product assortment, or merchandise mix, comprises two key components: product variety and promotion.

A wide variety of products in a store is called product breadth.

Product breadth is the total number of different products that a company sells. A retailer with many diverse product types has more than one type.

Walmart is an example of a company that sells everything from toilet paper to PJs.

If you want to sell many products, there must be many variations. This is called “product depth.”

In the past, it was all about how much you could sell. But now, most specialty retailers have a wide selection of products in their stores.

You might be surprised to know that the most successful retailers also consider what colors they offer their customers. For example, an office supply store may have a range of pens in different colors.

As the Wharton School of the University of Pennsylvania writes, “It’s important to recognize that not all people are motivated by money.”


Product Assortment Tips

product assortment

When deciding on the right product mix, there are no rules. Every store is different and needs to be considered separately. It would help if you kept a few general guidelines in mind when thinking about your customers’ products.

Check them out below.

1. Have a clearly defined store image and purpose.

The first step is understanding who you are and what your brand means regarding product assortment.

Who are your customers? What do they think of the store, and what is it for them?

When trying to figure out the right products for your company, make sure that they have a wide variety of different options. Some may be more popular than others, but it is vital to offer something for everyone.

For example, if you are a store specializing in trading card games like Magic: The Gathering or Pokemon cards, it is vital to have the most popular sets available. If not enough of your customers play those games, they may be more interested in other products.

Stratagem Cards & Games in Australia is an excellent example of a store with a deep product assortment in select categories. Stratagem offers the most prominent gaming space in Perth and has earned the reputation of being the “go-to place for tabletop gaming North of the river.”

One of the keys to Strategem’s success? Its deep product assortment. “We make sure that we always have a good range of the current most popular gaming products,” shares Mark Lester, founder at Stratagem Cards and Games. “Our range of D&D products, X-Wing and Dice, is the best in Perth.”

It turns out that the best strategy for some businesses is to focus on an assortment of items, while others are better off with a smaller variety. It all depends on what you’re trying to sell and who your target audience is.

For example, tourist shops should have an assortment of different types of souvenirs. This could include key chains, clothing items, toys, and mugs.

In Walla Walla, Washington, 35th+Butter sells home accessories and gifts. It carries an eclectic mix of products from clothing to locally made goodies. The shop has been featured in the local newspaper as one of their favorite spots.

When you know what your brand is and how it resonates with customers, decisions about the product assortment will be much easier. Failing to get this right may confuse or alienate shoppers.

If you have a loyal customer base and decide to go wide with your inventory, they may be turned off by the lack of variety. Conversely, if you only serve one type of shopper, it is essential that your selection not be too narrow, or those shoppers will head elsewhere.

2. Thoroughly analyze your inventory data.

The data collected in your sales and inventory can be used to decide how many units you should order, but it also contains information that may help with product assortment.

One of the best ways to figure out what your customers want is by paying attention to their purchasing habits. If you notice that a particular product keeps selling, then maybe it’s time for an expansion and new variants.

You have to go through your reports and see what’s selling so you can tell if it needs more variety or not.

3. Be conscious of your shopping patterns and habits.

It’s not just about the numbers. It also matters how people behave in-store and online, whether they’re buying or looking.

Figuring out what your customers want and need is crucial for any business.

In-store shopper observation

It’s essential to understand the customer experience and feel when shopping.

 Knowing the answers to these questions can help supplement inventory data.

For example, if shoppers always ask for more sizes or colors of a particular item and then ignore the rest of your inventory, it may be time to expand your range. If they only buy one color consistently, you should probably get rid of all other stains.

By observing what people are buying in conjunction with your product, you can better understand the demographics of your customer base. For example, if customers purchase facial masks when they’re also purchasing cleansers and moisturizers, it’s safe to say that this demographic is interested in skincare products.

The problem with this situation is that customers will go to competitors if you don’t have a wide range of products.

Online shopping behavior

Observing your customers’ browsing habits can help you to understand their needs. For example, suppose a customer searches for “men’s shoes” on the website and clicks through from those results pages but does not buy anything after viewing multiple product pages. In that case, it might indicate that they are looking for something specific in men’s shoes.

If you want to know what your customers are looking for, look at the search box. What brands do they keep typing in? Are there certain products that people always seem to be searching for more of? Please take this information and use it to decide on new items.

MyD. IY is a home improvement store that has been around for many years.

The company Best Buy has taken this idea and ran with it. According to Alan Grant, the store’s owner, they watch what people search for on their site to figure out what products they should stock.

A company that relies on Google Analytics knows what customers are looking for. If they don’t have it in stock, then there is a chance the customer will buy elsewhere.

We will then put the items on a restocking list and have an informal chat about them at the end of each week.

4. Pay attention to local and national trends.

Please pay attention to what’s happening in the market and outside of it.

For example, the COVID-19 pandemic caused people to stay home and not be public. This led to behaviors that have impacted what they buy on their shopping trips.

When you think about it, face masks and loungewear are just as necessary for success at home office work as the most expensive ergonomic chair. Plus, there’s no need to waste time running errands or ordering online when baking supplies can be delivered right to your door.

One of the most surprising things about people in this economy is that they cook more at home and not go out to eat. For example, Crate and Barrel have seen a spike in bread maker sales because there’s been an increase in baking.

Retailers that we’re able to adapt quickly and figure out what their customers wanted in terms of assortments ended up with much more business than those who just stuck to the same old thing.

The takeaway? Stay up to date with what’s happening globally, then be prepared to change your assortment strategy.

5. Remember that seasonality is essential.

When you’re creating your product mix, seasons are also important. Depending on the year, some categories will be more appropriate than others.

If a holiday or shopping event is coming up that will cause people to spend more money, it’s crucial for me because sales can be higher. To stay competitive, you need to change your assortment accordingly. For example, there’s a wider and deeper variety of summer apparel but scaled back on outerwear during the warmer season.

If you’re looking to get a jump on the back-to-school season, it might be wise to stock up on more variants of pens and markers.

6. Use the right tools.

The old saying “a stitch in time saves nine” is apropos for product assortment. In addition to inventory management tools that make it easy for you to track stock levels and add variants, consider investing in data analytics software that can streamline your process.

If you’re looking for ways to make better decisions about your assortment, there are plenty of platforms out there that can help. They all have pros and cons, from tables and databases to apps that leverage AI.

If you’re using retail merchandising displays, make sure to use a planogram. It’s like an architectural drawing of your store and will help maximize profitability. It’s also essential to have planogram software for this task.


Creating a product assortment is both an art and a science.

You need to use data and intuition to get the right merchandising mix.

With your customers’ correct data and understanding, you can create product assortments that will drive traffic to your store. Deep knowledge of market trends combined with customer shopping habits is critical. Click To Tweet