What Is Product Assortment And How Can It Benefit Your Store
What is product assortment? When I first started my retail business, I had no idea what is product assortment. I quickly learned that it’s one of the most important aspects of running a successful store.
A product assortment is essentially the mix of products that you offer for sale. It can be a complex topic, but understanding the basics is essential for any retailer.
There are two main types of assortments: depth and breadth. The term “depth” refers to the variety of products within each category, while “breadth” refers to the number of different categories offered. The right mix will vary depending on your specific business goals and customers.
Developing an effective product assortment strategy requires careful planning and execution. You need to consider things like your target market, competition, pricing, and more. But don’t worry – our guide will help you through every step of developing an unbeatable assortment strategy!
What is Product Assortment?
The product assortment is important for e-commerce businesses as it can help increase sales and profits. By offering a wide variety of products, businesses can appeal to more customers and make more sales.
For example, businesses that sell fast-moving consumer goods (FMCG) tend to be more successful when they offer a wide variety of products. This is because FMCG products tend to have a low-profit margin but are sold in large quantities.
On the other hand, jewelry is a high-margin product that does not get sold quickly.
A product’s depth is how many different varieties of the product the store carries. This could be in terms of colors, sizes, or features of the same product. The more variations, the deeper the store’s product assortment.
A product’s ‘breadth’ is the number of categories of products that the store sells.
Target offers a wide variety of products for its customers to purchase, including apparel, groceries, and electronics. This broad product selection gives Target an edge over other stores that may not offer such a diverse array of merchandise.
What is a Product Assortment Strategy?
In the world of commerce, the term “assortment” refers to the full catalog of products a retail store offers.
As each store has its own fingerprint of product, no two stores carry the exact same assortment of goods.
A product assortment strategy helps retail businesses decide what products to stock, display, and market. This can help increase both sales and profitability, while also creating a cohesive shopping experience.
A successful assortment strategy balances many different needs and constraints, including a retailer’s identity and brand, the variety and quantity of products offered, store capacities and layout, consumer demand and trends, and profitability.
One way to evaluate your strategy is to consider your balance between having a wide variety of products versus having a few products that appeal to a narrower audience.
What is a Broad Assortment in Retail?
A broad product assortment includes a large variety of products. This allows customers to find everything they need in one convenient location.
Walmart is an excellent example of a store that stocks a broad range of products. It is possible to buy shoes, lamps, groceries, and shampoo in one visit.
While athletic stores have a broader selection of shoes, they typically don’t carry as wide of a selection as running shoe specialty shops.
Retailers who offer a wide variety of products can attract a larger customer base. However, this also makes it more difficult to build loyalty among niche markets.
What is a Deep Assortment in Retail?
A deep assortment of products in your store is like having more options for your customers to choose from. This allows them to have a greater selection when picking items from your store.
A specialty store like Foot Locker is a great place to buy shoes aimed at “sneaker and youth culture.” You’ll find a wide variety of shoes in different brands, designs, colors, and sizes.
A deep assortment of products can be very appealing to customers who are very passionate about what they are shopping for. This can create a small but loyal group of customers who spend a lot and return often.
Why is an Assortment Strategy So Important?
Your product line is the foundation of your profitability, but can also be the source of your business’s downfall.
As decisions to buy are made in the preseason, this means that the purchasing of a product occurs more than a year before a sale is made. Another year may go by before the sales period is over.
Although there are things that can be improved during the season – the assortment strategy must remain the same.
Having an assorted approach is important when it comes to optimizing revenue, and profits, and minimizing risks. By planning ahead, you can avoid potential issues in the future.
How to Develop an Effective Assortment Strategy
Industry-leading retailers understand the importance of having a comprehensive assortment strategy. This five-step approach will help optimize your in-store and online businesses:
- Give similar stores similar assortments
- Build assortments around product families
- Account for changing consumer preferences
- Use specialized tools for assortment planning
- Analyze your data carefully
This strategic approach considers the entire retail business, rather than only specific aspects of it. This foundational knowledge can help retail business owners achieve long-term success.
Characteristics of Product Assortment
There are four main characteristics of product assortment: Breadth, Length, Depth, and Consistency.
Breadth refers to the number of different product lines a retailer or manufacturer has in production. For example, a vehicle manufacturer may have product lines for SUVs, buses, and trucks.
Length is the number of products within a product line. An example: A single automaker could have five models of SUVs and four models of buses, but only three models of trucks.
The depth of a product line refers to the number of different types of products within that line. For example, an automaker might offer a standard and basic version of each type of truck and bus, but also have a third luxury version for SUV types.
Consistency is important in retail, for example making sure that the product lines or products are consistent with each other. This might mean that the trucks and buses are consistent with each other as they are both commercial-grade automobiles, but the SUV would not fit or be consistent considering that it is a consumer vehicle.
Product Assortment Examples
Let’s take a look at two examples of different product offerings, and how these offerings reflect the breadth & depth of the company’s product line.
Higher Product Breadth
You can increase the breadth of your product assortment by carrying four different styles with 2500 pieces each or 10 different styles with 1000 pieces each. This change will allow you to offer a greater variety of products to your customers, while still staying within your budget.
This approach is going to demand negotiating with suppliers who are willing to provide fewer items of each design, but this will give your customers more variety to select from.
Higher Product Depth
On the other hand, if you choose to focus on a smaller number of styles and invest more heavily in those styles, you will have to be selective about which product styles you choose. This strategy may require more upfront investment, but it could pay off in the long run if the styles you choose are popular with consumers.
Instead of spreading your budget over 10 styles and buying 1000 pieces each, you will now pick only 4 styles. This will allow you to buy 2500 pieces of each style, which will give you a deeper product depth.
This would mean you are more dependent on one product, and a bad decision could negatively impact your revenue.
You need to track and analyze your sales data carefully to make sure you’re making the right product decisions. You also need to be constantly adapting and adjusting your products and styles to stay ahead of the curve.
As a retailer, it is important to keep up with the latest trends in your industry to spot new opportunities and products that may be going out of style. This can help you make decisions about what to stock in your store and how to adjust your product mix over time.
Conclusion
What is product assortment? This critical aspect of a retail business refers to the mix of products that you offer for sale, and the right mix will vary depending on your specific goals and customers. Developing an effective product assortment strategy requires careful planning and execution, but our guide will help you through every step!
