Product Assortment and Display21/08/2022 0 By indiafreenotes
An assortment strategy in retailing involves the number and type of products that stores display for purchase by consumers. Also called a “product assortment strategy,” it is a strategic tool that retailers use to manage and increase sales. The strategy is made up of two major components:
- The depth of products offered, or how many variations of a particular product a store carries (e.g. how many sizes or flavors of the same product).
- The width (breadth) of the product variety, or how many different types of products a store carries.
Components of Assortment Strategies
Assortment strategies are defined according to two main factors:
- Product Width
Product width refers to the range of product lines that a retailer offers. For example, a supermarket may offer product lines ranging from food items to cosmetics and over-the-counter medical supplies. They are all the product lines that are available to customers and combine to make up the product width offered by the retailer.
- Product Depth
Product depth is the variety of products offered under each product line. For example, if the retailer in question is a specialized cereal store, they are likely to offer hundreds of options for cereal. The variety determines the product depth.
Assortments strategies are determined by the product width and depth that a retailer chooses to offer and ideally result in optimal product mixes that drive sales and increase the likelihood of customers making positive purchase decisions. The strategies employed may be dependent on the physical capacity of stores smaller stores generally lack the space for high product width and depth and tend to focus on one or the other.
For example, a specialty retailer, such as a cereal store, is likely to show narrower product width (few product lines), but high product depth (numerous options for each product line). That is, they are likely to offer only cereal but will also provide many options of cereals to choose from.
On the other hand, a wholesaler, such as Costco, is likely to demonstrate high product width (lots of product lines ranging from fresh fruit to clothing, household furniture, and accessories) but lower depth (only a few options in each product line, e.g., offering).
Types of Assortment Strategies
- Wide assortment
A wide assortment strategy is used when retailers aim to offer a lot of different product lines or categories, but with lesser depth in each category. It aims to provide more variety in the types of product lines offered but does not provide a high number of products in each product line.
For example, a grocery store that provides a lot of different products, but only stocks one or two brands for each type of product, is employing a wide assortment strategy.
- Deep assortment
A deep assortment strategy aims to provide a large number of options within a particular product category. It is common for specialty stores that focus on one or a few products to utilize a deep assortment strategy.
For example, a supplement store is likely to offer many options for buyers of protein powders, it is using a deep assortment strategy by focusing on fewer product lines but with high depth and variety within each product line.
- Scrambled assortment
Retailers using scrambled assortment strategies aim to offer products that are outside of their core business operations in order to attract more clients from different markets.
For example, a store that is famous for its smoothies starts selling fresh fruit and packaged food, which allows it to target a wider audience, including people who wish to make smoothies at home.
- Localized assortment
A localized assortment strategy allocates the product mix based on the preferences of the local population and the characteristics of the geographical region. This allows the retailer to cater to different demands according to geography and thereby increase sales.
For example, a clothing retailer like Zara does not sell the same clothing inventory in a store in Mumbai, India, as it does in Vancouver, Canada. This is because the population in Vancouver requires warmer clothing for snow and the winter season, whereas the population in India exhibit different clothing preferences and requirements.
- Mass-market assortment
Mass-market assortment strategies are used by stores with large physical storage capabilities, such as Walmart and Amazon. They aim to appeal to the mass-market and offer as many products and varieties as possible, catering to a much bigger customer base.
Importance of Assortment Strategies
If used effectively, assortment strategies can boost sales and help the retailer grow its customer base. They are important because they determine the goods that a customer interacts with, which leads to a purchase decision. Assortment can vary according to seasons an ice cream store may offer different flavors in the summer and different flavors in a monsoon season.
Similarly, a clothing retailer is likely to stock different clothes in spring and in summer (probably more beachwear) than it does in winter (more jackets). This caters to the public demand and increases sales. Similarly, in supermarkets, complementary goods, such as toothbrushes and toothpaste, are assorted strategically so that customers are persuaded to buy more than they intended to.
However, assortment strategies can be disadvantageous if the product mix and allocation doesn’t appeal to the population visiting the store (or the website, for e-commerce retailers). For example, offering too much variety within a product line can frustrate customers because it makes it harder to make a decision. At the same time, providing too little variety can be disappointing to some customers and can negatively impact sales revenue.
Retail product displays are the fixtures in your store that hold or promote your products.
The look of retail product displays relies heavily on your visual merchandising strategy. Generally, the first interaction customers have with your products in-store is via your displays.
If you have a brick-and-mortar store, retail product displays are a must. You or your visual merchandiser can arrange displays to showcase your products and increase sales.
It’s also a visual merchandiser’s responsibility to manage and maintain your retail product displays over time. Fixtures may break or become worn down.
After testing certain display types, you may decide to iterate on your strategy and implement new display designs to help boost sales.
Ways to Displays:
- Display related products together in a themed way. When building a product display look for products that are natural add-ons to the main product featured.
- Use lighting to feature products. Accent lighting creates visual interest for shoppers, and helps to make featured products “pop.”
- Change displays in high traffic areas on a weekly basis. Customers want a reason to return to your store, so get them excited by displaying new and different products.
- Use blocks of colour to attract attention. Bright colors can focus your customer’s attention on key products and services. Combined with good lighting it helps you to create focal points for your customers.
- Keep messaging simple. Use the “blink test” to ensure that your customer can understand your offer. You only have a few seconds to garner their attention, so do not distract them with too much verbiage.
- Don’t forget the pricing. If a customer fails to see a price on an otherwise well-dressed display, they could very well assume that the item is out of their price range, and forcing them to ask for assistance on the item takes the “impulse” out of impulse buying!
- Pay attention to the store exterior. This includes the sign, the windows, and the sidewalk. If your business looks dirty or closed from the outside, then customer perception would be exactly that, and they will walk right by.
- Maintain your fixtures and store. You may have the best merchandise that is competitively priced, but if the gondola fixtures, sales counters, or sign holders are broken, damaged, or dirty it reflects negatively on your business…and the sales report.
- Make merchandise easy to see and buy. Learn from the grocery retailers…keep your key products at between wait and eye-level so that customers do not have to work to see them or pick them up.
- Clean, spaced, and organized. Have you ever been in a store that had dirty merchandise? Unorganized and dirty stores tell your customer that you don’t care and as a result…neither will they!