Product assortment refers to the range of products or services you offer to your customers. This can include everything from different styles of clothing to various flavors of coffee. By carefully curating your product assortment, you can tailor your offerings to your customers' needs and preferences, ultimately leading to increased customer satisfaction and loyalty.
Product assortment can entail a number of characteristics, including:
A strong and diverse product assortment can help differentiate you from your competitors and attract new customers to your business.
Product assortment plays a pivotal role in the success of a business, impacting various aspects such as sales, average order value, customer experience, competitiveness, and customer attraction. Carefully curating your product assortments is an excellent way to increase revenue and customer reach.
Good product assortment ensures that a business caters to the diverse needs of its customer base. When customers find a comprehensive range of products in one place, it not only increases the likelihood of a purchase but also encourages them to explore additional offerings, thereby boosting sales.
By strategically grouping complementary products together, such as phones with phone cases, businesses can entice customers to buy more in individual transactions, leading to larger average order values.
Curation is key! When customers can easily find what they need without being overwhelmed by too many options, it creates a positive and efficient shopping experience. This, combined with effective catalog management, contributes to overall customer satisfaction.
Businesses with agile product assortment strategies are able to stay competitive by adapting to changing trends and consumer demands. The quicker a retailer is able to respond to shifts in interest, the more appealing they are to their target audience.
A diverse range of products, thoughtfully aligned with consumer preferences, not only retains existing customers but helps attract new ones whose varied needs aren’t being met elsewhere. This broad appeal strengthens retailers’ overall market positioning.
For many successful companies, the key to an effective product assortment strategy is allowing their approach to evolve.
Amazon is an excellent example of this. Over the years, their product assortment has grown from books and eBooks to a wide breadth of product categories, a deep assortment within each category, partnerships with various brands, global accessibility, personalized recommendations, and a commitment to constant innovation and expansion.
This comprehensive strategy allowed Amazon to expand well beyond their original business, attracting a diverse customer base and maintaining its position as a leading online marketplace.
Retailers should select the best product assortment approach for their business based on their target market, business goals, and resources. A well-crafted assortment strategy is crucial for success, whether you’re aiming for broad appeal, deep specialization, local relevance, mass-market dominance, or diversification.
A wide assortment strategy involves offering a broad range of product types and categories but with limited variations within each. Walgreens and CVS are good examples of this – their product assortment appeals to a broad audience by providing convenience and a one-stop shopping experience.
While there may be fewer options for individual items, the breadth of product categories ensures that customers can find most of what they need in one store.
The deep assortment strategy, as seen in specialized stores like Zappos, focuses on a narrower range of product categories but offers a wide variety of items within each category. This approach caters to specific customer interests and needs, allowing for a more tailored shopping experience and helping to meet B2B buyer expectations.
Deep assortment also facilitates upselling: when a business offers multiple brands, models, and configurations of smartphones, for example, customers can make direct comparisons between products and might buy something more expensive than they initially planned.
Customers who prioritize factors like design, quality, and price within a specific category are more likely to find satisfaction at these businesses.
Localized assortment strategies involve tailoring product offerings based on the specific needs and demands of a particular location. For instance, a hardware store may adjust its product mix to include road salt and hand warmers in regions with harsh winters.
This strategy creates a more relevant product mix for the local community but may limit the customer pool to very specific demographics. However, ecommerce provides an excellent solution to this. Digital marketplaces can employ sophisticated algorithms that analyze customer preferences and behavior, enabling them to provide localized product recommendations without sacrificing virtual shelf space.
Mass-market assortment strategies aim to cater to as many customers and demographics as possible by offering both wide and deep product assortments. Think Walmart and Costco. This approach involves a vast selection of products across numerous categories, providing customers with an extensive range of options. This increases the likelihood of customers discovering and purchasing items they may not have initially considered.
The drawback to this strategy can be steep, however: maintaining such a broad assortment requires significant resources and storage capabilities.
The scrambled assortment strategy involves offering a few products outside of your store's core focus to attract a new customer base. For instance, grocery stores may introduce a small selection of household supplies, electronics, or bouquets. This strategy aims to increase sales by diversifying the product mix and appealing to a broader audience.
Expanding product assortment can significantly benefit retailers by attracting a broader customer base, driving sales, and enhancing overall customer satisfaction. However, it often involves the risk of owning more inventory, leading to potential challenges such as storage costs, overstock, and the need for effective inventory management.
Retailers can alleviate those risks by implementing their own marketplace as part of a robust ecommerce growth strategy. Marketplaces allow businesses to offer a more diverse range of products through third-party sellers without the need for large upfront investments in inventory.
Marketplaces give retailers the flexibility to test new products and categories without the inventory commitments associated with first-party assortment.
Retailers can collaborate with third-party sellers in their marketplace to ensure complementary offerings with low risk and high profitability. This often includes collaborating with well-known brands, offering customers trusted and recognized products at the top of search results. This helps foster a sense of reliability in the algorithm while your marketplace runs these product tests.
Online marketplaces give businesses the ability to offer flexible pricing and discounts backed up by data. By catering quickly and simultaneously to a wide range of budgets, marketplaces make products accessible to a very broad customer base.
Online marketplaces allow customers to access a vast array of products from third-party sellers virtually anywhere in the world. This helps solve the problem of narrowing customer demographics, which is the biggest drawback of brick-and-mortar localized product assortment. Marketplace platforms can sell snow shovels and bikinis at the same time without worrying about being out of sync with their customers’ needs.
Online marketplaces provide a huge amount of data to retailers, such as customer search data, purchase history, and browsing behavior. This allows businesses to maximize the effectiveness of their product assortments by offering personalized experiences to customers based on their preferences. This customer-centric approach enhances the overall shopping experience well beyond what static online stores can offer.
At the end of the day, implementing a successful product assortment strategy demands flexibility, careful curation, and a thorough understanding of your customers’ needs. To keep up with the latest ecommerce growth strategies and insights, sign up for our newsletter.
