Introduction
An assortment strategy in retailing involves the number and type of products that stores display for purchase by consumers. Often termed a product assortment strategy, it serves as a strategic tool retailers use to manage and increase sales. The strategy comprises two major components:
- The Depth of Products Offered: How many variations of a particular product a store carries (e.g., sizes or flavors).
- The Width (Breadth) of the Product Variety: How many different types of products a store carries.
Key Takeaways
- An assortment strategy aims to optimize the variety of goods offered for sale, improving retail sales.
- This tactic revolves around the concepts of having a deep assortment and a wide variety of products.
- Initially conceived for brick-and-mortar stores, this strategy is now effectively employed by e-commerce platforms as well.
How Assortment Strategies Work
A product assortment strategy is primarily a retail sales tool focusing on depth and breadth at its core. Not all retailers can utilize both components simultaneously. The strategy often comprises multiple layers and can be adapted to the specific needs and goals of individual stores.
- Deep Assortment: A retailer carries numerous variations of a single product.
- Wide Variety: Retailers offer a large number of different product types.
Balancing depth and variety is crucial, as the strategy is not one-size-fits-all.
A Challenge for Small Stores
Retailers face a trade-off when determining an assortment strategy. Opting for a wide variety and a deep assortment simultaneously usually requires significant space. Consequently, this is typically the domain of large big-box retailers. Smaller stores may choose to specialize in a subset of products, offering a variety of styles and configurations but not a plethora of product types.
Example: A small convenience store may offer one brand of canned cat food with multiple flavors, while a large supermarket could choose to stock multiple brands, each with its range of flavors.
A Brick-and-Mortar Term
Originally associated with physical stores, an assortment strategy has evolved to suit the needs of various retail formats, including click-and-mortar and e-tailing sales channels.
Adjusting for Demographics
Retailers can fine-tune their assortment strategies to target specific consumer demographics. For instance:
- To attract new parents, retailers may stock shelves with trendy infant apparel, cots, toys, and other essentials to meet the needs of this customer segment.
A Strategic Selling Tool
Organizing a product assortment strategically can upsell customers on additional items, making the shopping experience smoother and more lucrative for the retailer.
- Placing garden hoses near lawn-care items like sprinklers can nudge customers towards adding more items to their basket.
- Presenting flashlights alongside batteries or locating batteries near the checkout encourages impulse buys and supports customer convenience.
Potential Disadvantages of Assortment Strategies
While a well-planned assortment strategy can boost sales and customer satisfaction, it’s not without pitfalls. Poorly placed items or overly extensive assortments can confuse customers and harm item appeal.
Challenges to Consider:
- Mixing popular items with less-popular ones may detract from the former’s appeal.
- Too vast an assortment can overwhelm shoppers, making it hard to locate desired items and discouraging engagement overall.
Finding the right balance in a product assortment strategy can help you harness these principles to achieve retail success.
Related Terms: deep assortment, wide variety, big-box retailers, impulse buying, customer demographics.
