The Role of Product Assortment in Your Retail Strategy

Determining Your Product Depth and Breadth

Man shopping for candles in shop
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Successful retailers don’t offer a blend of random products to their customers. In order to balance their merchandise offerings with their business goals, while addressing challenges like limited shelf space, these retailers have to map out a comprehensive assortment strategy. To do so, they must understand the fundamentals of product assortment, which include product breadth and depth. 

What Is Product Assortment and Why Does It Matter?

Product assortment, also known as product or merchandise mix, is the variety of merchandise that a business offers to customers. In the eyes of a customer, this assortment defines a retailer’s image and why they shop there. Product assortment will also determine a company’s dependence on particular inventory.

A high product mix—or a wide range of merchandise—can reduce the risk of dependence on limited items, but selling unnecessary products that don’t connect to your brand’s image can be harmful. For example, if Apple began offering refrigerators, it could confuse customers and hurt the brand. 

Product Breadth Defined

Product breadth, also known as width, is the number of product lines that a company offers. For example, a shoe store’s breadth might be quantified at six if it offers: 

  1. Nike 
  2. Asics 
  3. Brooks 
  4. Adidas 
  5. New Balance
  6. Under Armour

This encompasses everything that the store has to offer. Broken down further, categories within breadth may include: 

  • Women’s sneakers 
  • Men’s sneakers 
  • Women’s dress shoes 
  • Men’s dress shoes 
  • Women’s winter boots 
  • Men’s winter boots. 

Product Depth Defined

Product depth is the number of variations or subcategories of a product that a retailer offers. For example, if a store primarily sells greeting cards, it likely has a lot of product depth, such as 100 different types of sympathy cards. A large pharmacy, meanwhile, may have less product depth in the greeting card department—perhaps 200 greeting cards total—but it will have more breadth overall since it stocks hundreds of categories of products.

Defining Your Product Mix

Your product assortment strategy is determined by your business goals.

Large stores with a wide array of products should aim to have a wide (or high-breadth) assortment strategy, and low depth. Specialized or small stores, on the other hand, should aim to have lower breadth and higher depth. 

In the aforementioned greeting card example, neither strategy is right or wrong, according to Trevor Masson, SVP, global sales at housewares design company, iDesign. In an email to The Balance, Masson said that both companies are upholding their images and catering to their customers’ expectations. Consumers at the large pharmacy are looking for value and unrelated items. The owners can keep their overall breadth wide and greeting card product depth shallow to avoid unnecessary costs. A niche greeting card store, though, must maintain a narrow breadth but a robust product depth so the store’s specialization is indisputable. 

It will require research and analysis to hit the sweet spot when it comes to your business’s ideal product mix. According to a 2019 study from Deloitte and Google, product assortment should not be stagnant, but change over time in accordance with customer behavior. A company with a fully mature assortment policy is able to analyze customer metrics and pivot immediately.

Seasonal Merchandising Strategies

Assortment strategies can also vary depending on the season. Masson notes that a store carrying a wide range of supplies, such as Office Depot, will have a deeper back-to-school assortment at the onset of the school season. However, this depth will shrink during the rest of the year, since fewer people may be looking for a good deal on, say, pencil cases in January.

Masson advises that retailers should provide a broad seasonal assortment so that customers can find what they’re looking for and rely on the establishment for years to come. In October, for example, in order to increase foot traffic, it might behoove a company to expand its assortment of Halloween candy. However, the seasonal assortment needs to make sense for the brand. Customers have certain expectations about what they’ll find within a particular retailer. For instance, people browsing in a handbag store are not necessarily looking for holiday decorations. And even if these decorations are in season, Masson points out that it would cost too many marketing dollars for the handbag store to pull off a sale successfully. Instead, the store could expand its breadth by offering scarves that go inside its bags, and its depth by offering seasonal colors.

Seasonal changes don’t just pertain to holidays and events, as a shoe store in the Northeast may rotate its shoe supply ahead of seasonal weather changes.

The Bottom Line

Retailers must deeply consider their product mix. The mix, or assortment, consists of dimensions called breadth and depth, which ultimately construct a customer’s perception of an establishment. Retailers can expand or shrink these dimensions depending on demand and on the season, but the strategy must always gel with the business’s image and goals. By knowing their customers, remaining adaptable, and keeping an eye on trends, retailers can maintain a product assortment mix that suits their needs and helps their businesses thrive.