Do you follow an assortment strategy for your store? Even if you can’t name one, it’s something you’re probably already doing on instinct.
Nonetheless, it’s handy to understand which category your strategy falls into, the rationale behind each approach, and how to further optimise yours.
And if you’re yet to open your shop, it’s essential food for thought (and good terminology to be aware of if you’re looking to write a business plan and secure a loan).
On this page:
- 5 Different product assortment strategies
- What does an optimised assortment strategy look like?
- How to optimise your assortment strategy in 3 steps
- FAQs
5 Different product assortment strategies
1. Wide assortment
💡 Example: A corner shop or lifestyle store
With a wide assortment, you’re aiming to cover lots of different product types, without having too many types of each product. It’s why a corner shop is likely to have one or two types of toothpaste, rather than the multitude of options you’d expect in a larger supermarket.
Wide assortments work well for some shops. You want to be able to drop into your corner shop and conveniently pick up anything from chickpeas to drain cleaner, without particularly caring about the brand; that’s kind of their whole deal.
But a wide assortment comes with its challenges, including:
- It’s more complicated to manage inventory and suppliers
- If you sell online, there’s more work involved in photographing/uploading each product
- Your store is at risk of feeling cluttered
- You might have to offer discounts frequently to shift stock
2. Deep assortment
💡 Example: A piano shop
In contrast to a wide assortment, a deep assortment sticks with very few product types, but with multiple lines of each product. Think highly specialised or boutique shops.
If you have a brick and mortar store with a deep assortment, your main challenges are likely to be:
- Marketing! You can’t rely so much on footfall, or repeat customers (unless it’s a product the customer would be likely to purchase multiple times), so you’re relying on marketing to get people through the door
- For lower value items, you may struggle with conversions for your online store (see point below)
As Kirsten Fisher points out in an episode of her podcast, The Buyerside Chat Podcast:
“[With a deep assortment] you’re stuck at a sales volume because you’re not offering enough depth of choices so you’re just putting out more variations of the same thing, and it’s not creating additive sales.” — Kirsten Fisher, The Buyerside Chat Podcast.
Unless you’re offering free shipping, she explains, you’re likely to lose customers because they can’t hit the minimum order value for free shipping without purchasing multiple similar products, which they’re unlikely to want.
And you may experience a third challenge, too. Being presented with so many variations of the same product can be overwhelming to customers, to the point of being detrimental to sales. A popular experiment found that people preferred to buy from a market stall selling six varieties of jam, rather than 24 types; customers simply found the second stall too overwhelming.
3. Localised assortment
💡 Example: Team or city merchandise shops
A localised assortment is one that’s designed to only serve people in the place it’s based in. An extreme example is merchandise that’s based on the city you’re in, or a local sports team; you’re less likely to buy an “I ❤️ London” t-shirt when you’re not in London, for example.
But it can be much more subtle than that. The clothes that H&M stocks in January in London won’t be the same as those in Florida; they’re tailored to local trends, local clientele, and the local climate.
4. Mass-market assortment
💡 Example: Amazon, Tesco Extra or Walmart
A mass-market assortment strategy is kind of like a wide assortment strategy on steroids. Expect a product selection that’s both wide and deep, with products across multiple different categories; food, homeware, fashion, etc.
Stores with a mass-market assortment strategy want to be a place where anyone can find anything they want — no easy task!
5. Scrambled assortment
💡 Example: A bookshop that starts selling coffee
When a shop turns to a scrambled assortment strategy, they’re testing out products outside of their usual scope to try to attract a new audience to their store.
We’re big believers in the power of diversifying your business, and working to stand out from the other shops on the street. So when done well, we think this is a great assortment to experiment with.
If you’re going to test out a new product, just be sure it fits your core vibe and doesn’t detract from your brand, and that you have all the right licences/product knowledge to handle. Bonus points if it’s not too much of an upfront investment, too.
📚 Bookmark for later: How Our Favourite Bookshops Are Diversifying (& What We Can Learn From Them)
What does an optimised assortment strategy look like?
An optimised assortment strategy looks different to every store, but some common themes are:
- You’re giving your customers what they need and want; they don’t often leave your store empty handed
- You’re not spending all your time dealing with a ton of different suppliers, uploading different products to your website, and having to frequently adjust prices to shift stock
- You’re selling more of the products that make you the most money, even if customers first come in for something different (‘pull’ products)
- Your stock doesn’t hang around for too long; you have a high inventory turnover ratio (5+), and a high sales volume
How to optimise your assortment strategy in 3 steps
1. Get down into the data
You first need to establish a complete picture of how your assortment is performing right now. Without this, you won’t be able to see which future changes have had an impact.
Some key metrics you should track on a monthly basis are:
- Profit margin
- Volume of sales
- Footfall (for brick and mortar stores)
- Traffic (for ecommerce stores)
- Conversion rate (for ecommerce stores)
- Inventory turnover
📚 Bookmark for later: What’s a Good Profit Margin for a Product?
2. Stop treating all your products as equals
Think of each item in your assortment like a different musician in an orchestra. Each one has an important part to play, but not everyone can be a soloist (and only the best musicians should be there at all).
Categorising your products, and understanding that each category should be treated differently, is a real game changer.
If you run an ecommerce store on Shopify, they’ll actually do this for you, dividing your products up into A-, B- and C-grade products, and offering advice on how to treat products within each category:
- A-grade products account for 80% of your revenue. They should always be in stock, and used front and centre in marketing campaigns
- B-grade products represent a moderate percentage of your revenue. Try bundling them together with your A-grade products, and always have them in stock
- C-grade products are slow-moving, and represent a small percentage of your revenue. You’d ideally want to phase out these products, or get them up to B-grade if they’re close to that level
Shopify’s ABC inventory analysis is definitely a logical base to start from, even if you don’t use the Shopify platform.
Sarah Manning, a professional visual merchandiser, also recommends looking at your ‘push’ and ‘pull’ products, both when optimising your assortment, and then building the most efficient displays to promote the right products in the right places.
- Pull products are the products that people come to your store to buy, or might be items with a cheaper price point.
- Push products might be new, seasonal, high margin or high ticket items that you’re keen to get your customers interested in, and should therefore place in the most visible spots.
📚 Bookmark for later: How to Nail the Fundamentals of Visual Merchandising, with Sarah Manning
3. Simplify your supply chain
Find you’re spending all your time wading through order sheets and coordinating with multiple different suppliers? Our founders experienced that first hand when they ran a store in Covent Garden. The admin side of retail can be a real time drain.
👋 That’s one reason why they built CREOATE, a wholesale marketplace for independents:
- Stock up from over 6,500 independent brands in one place, and check out just once
- Instantly access high quality product images for everything you buy
- Reorder your bestsellers in just a few clicks
Create an account to view wholesale prices and start shopping today
FAQs
What is a merchandising assortment?
A merchandising assortment, also known as a product assortment, simply refers to the mixture of different products you sell in your shop or ecommerce store.
What information do you need to conduct an assortment analysis or review?
If you want to analyse your assortment to identify your ‘A-grade’ products, we recommend looking at a combination of:
- Sales volume
- Margin
- Inventory levels/ sell-through rate
- Return rate
For each product in your assortment. From there, play around with different criteria for each product category (A-grade, B-grade, etc) until you have a logical split of products.
