Product Assortment in Retail
Product assortment in retail refers to the range of products offered by a retailer or brand to its customers. It involves carefully curating a selection of products to meet the diverse needs and preferences of the target market. Assortment analysis on the other hand refers to the study and optimization of existing products. A well-planned assortment helps attract customers, drive sales, and enhance customer satisfaction.
For example, let’s look at a cosmetics brand on an e-commerce store that offers diverse products including makeup, skincare, haircare, fragrances, and beauty tools.
This attracts a broad audience, meets various customer needs, and fosters repeat purchases, leading to increased loyalty and business growth. Regularly analyzing customer feedback and market trends helps the brand stay relevant and successful, leading to more revenue growth.
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Importance of Assortment Analysis in Retail
Assortment analysis is crucial for Ecommerce success as it helps retailers understand which products are performing well and which ones are underperforming. By analyzing the data, retailers can make informed decisions about product selection and optimize their offerings to meet customer demand effectively.
The impact of product assortment on customer experience and loyalty is significant. When retailers offer a well-curated assortment that aligns with customer preferences and needs, it enhances the overall shopping experience, leading to increased customer satisfaction and long-term loyalty.
Furthermore, assortment analysis enables retailers to identify seasonal trends and consumer preferences, allowing them to plan strategic promotions and marketing campaigns. With these insights, retailers can align their inventory levels with anticipated demand, optimizing their supply chain and reducing carrying costs.
Regularly conducting assortment analysis also facilitates agility in responding to market changes, ensuring that the product offerings remain up-to-date and in tune with customer expectations.
Key Steps to Perform a Comprehensive Assortment Analysis:
1. Define Business Objectives and Target Market
Clearly articulate the goals of the product assortment analysis and identify the specific customer segments you want to target.
2. Gather Data
Collect relevant data on sales performance, customer behavior, and inventory levels for each product in your assortment.
3. Identify High-Performing and Underperforming Products
Analyze the data to identify top-selling products as well as those that are not meeting sales expectations.
4. Analyze Competitor Assortments and Market Trends
Understand your competitors’ product offerings and stay updated on market trends to spot potential gaps or opportunities in your assortment.
5. Conduct Customer Surveys and Feedback Analysis
Gather feedback through surveys or online reviews to understand their preferences, pain points, and product demands. This insight can help refine the assortment to better align with customer needs.
6. Optimize Assortment and Plan Assortment Expansion
Based on the insights gained from the analysis, make informed decisions about product assortment optimization. This could involve discontinuing underperforming items, introducing new products to fill gaps, and planning for seasonal or trend-based assortment expansions.
Optimizing Product Assortment in Retail
• Segment Products and Customers for Personalization
To make your offerings more relevant, start by grouping products based on shared attributes such as style, function, or price range. Use these product groups to craft customized assortments tailored to the unique preferences and behaviors of different customer segments.
By aligning your product selection with the needs of specific groups, you can create a more engaging shopping experience that boosts satisfaction and loyalty.
• Leverage Customer Feedback and Reviews
Customer feedback is a goldmine of insights. Take the time to collect and analyze reviews, surveys, and direct feedback from your audience.
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This information helps you understand what customers love, where they see room for improvement, and what pain points they encounter. Use these insights to diversify your product assortment range and fine-tune your offerings to better align with customer preferences, ensuring a more satisfying experience.
• Balance Core Products vs. Seasonal or Trending Items
Achieving the right product mix is key to appealing to a broad audience. Maintain a steady selection of core, evergreen products that keep your regular customers coming back.
At the same time, introduce seasonal or trending items to spark interest and attract new customers. Striking this balance ensures your inventory stays fresh and relevant while retaining the dependability of your staple offerings.
• Implement A/B Testing
Experimentation is essential to finding the perfect product combinations. Use A/B testing to compare different assortments and determine which combinations resonate best with your customers.
Test variations in product placement, pricing, or bundle options to identify the approaches that drive higher sales and stronger customer engagement. By continuously testing and refining, you can ensure your product assortment strategy remains dynamic and effective.
Tools for Effective Assortment Analysis
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E-commerce Analytics Platforms
E-commerce analytics platforms provide retailers with data visualization and actionable insights into their product performance, helping them make data-driven decisions.
One such tool is 42Signals. With its user-friendly interface and robust features, 42Signals helps retailers to effectively analyze and optimize product diversity. Its advanced data visualization capabilities and actionable insights, enable retailers to make informed, data-driven decisions to curate compelling product assortment offerings that align with customer preferences.
Advanced Analytics for Optimization
Techniques like digital shelf analytics enable retailers to monitor how their products are displayed across various online platforms, while the voice of customer analytics helps capture customer sentiments to fine-tune assortments.
Integrating Analysis with Inventory
By integrating assortment analysis with inventory management systems, retailers can ensure that the right products are stocked in the right quantities to avoid stockouts and overstocking.
Automating Updates for Improvement
Automating assortment updates based on real-time data allows retailers to continuously optimize their product offerings, keeping them relevant and competitive.
Conclusion on Product Assortment
Effectively analyzing and optimizing product varieties in retail is a critical success factor for e-commerce businesses.
Interested in optimizing your retail product assortment? Get in touch with us today or schedule a demo – sales@42signals.com
Frequently Asked Questions (FAQs)
What is an assorted analysis?
An assorted analysis is a comprehensive evaluation of a company’s product offerings across multiple dimensions, including style, price, size, color, and other attributes. The goal of an assorted analysis is to identify patterns, trends, and gaps in the product strategy that can inform decision-making. This type of analysis typically involves segmenting products by category, comparing performance metrics, and identifying areas for improvement.
What is an example of a product assortment strategy?
A common example is known as “depth vs. width.” This strategy involves offering a deep range of products within a narrow set of categories, or a shallow range of products across a broader set of categories.
For example, a specialty running shoe store might focus exclusively on athletic footwear, carrying a deep assortment of shoes from a variety of brands and styles tailored to specific types of runs and workouts. Alternatively, a general sporting goods store might carry a shallower assortment of running shoes but offer a wider range of sports equipment and apparel.