What is an 'Assortment Strategy'

Assortment strategy is the number and type of products displayed by retailers for purchase by consumers. The two major components of an assortment strategy are the depth of products offered (how many variations of a particular product a store carries), and the width of the product variety (how many different types of products a store carries).

A deep assortment of products means that a retailer carries a number of variations of a single product (the opposite being a narrow assortment); a wide variety of products means that a retailer carries a large number of different products (the opposite being a narrow variety).

BREAKING DOWN 'Assortment Strategy'

Retailers face a trade-off when determining an assortment strategy. Choosing a wide variety and a deep assortment simultaneously requires a large amount of space, and is typically reserved for big box retailers. Stores with smaller spaces may choose to specialize in a certain type of product and offer consumers a variety of colors and styles, while others may offer a deep assortment of products but a narrow variety (convenience stores, for example).

The assortment strategy can be fine-tuned to target specific demographics, for instance by grouping items that are believed to appeal to a certain type of customer. If a retailer wants to attract customers who are new parents, for instance, they might fill their shelves with apparel from trendy brands for infants as well as toys and bedding they might require.

Though the depth of the product assortment may help attract customers, there are caveats that retailers must remain aware of. Demand may vary drastically for the products within an assortment, meaning items that have diminished appeal among customers may detract from more popular items if they are placed in the wrong location. Also if the assortment is too vast, customers may have difficulty finding the item they are looking for. Overwhelming them with options can be counterproductive and discourage customer engagement.

When managed successfully, the strategic arrangement of a product assortment can upsell customers on supplemental items as they search for the item that brought them to the store. By placing garden hoses in a location nearby sprinklers and other lawn care products, a retailer may be able to drive more into the customer’s basket. A section for flashlights could include a display of batteries, which are necessary to use the product, at the front of the aisle. That type of arrangement, placing supplemental items near the core product, is a way to entice impulse shopping.

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