Retailers spend considerable time discussing advertising, stores, digital marketing, and customer acquisition. But one of the biggest growth opportunities may already be sitting on the shelf: the assortment itself.
Assortment determines your customer proposition
What you carry communicates what kind of retailer you are. Breadth, brands, opening price points, premium products, private brands, exclusives, and specialty items collectively create a retailer’s merchandise identity.
More isn’t necessarily better
Adding SKUs can initially appear customer-friendly. Eventually, however, excessive assortment can create duplication, confuse customers, dilute inventory investment, increase out-of-stocks on important products, and consume working capital.
Look for white space
Assortment optimization isn’t only about cutting SKUs.
Retailers should identify:
- Missing price points
- Emerging brands
- New customer needs
- Adjacent categories
- Premium opportunities
- Private-brand opportunities
- Exclusive products
Use productivity metrics carefully
Low-volume products aren’t automatically bad products. Some products complete a project, establish assortment credibility, support a high-value customer, or drive purchases of related products. Data informs assortment decisions—but retail judgment remains essential.
Your assortment is strategy
Retailers often separate merchandising from corporate strategy.
They shouldn’t.
For a product-based retailer, assortment strategy is business strategy.
