Assortment Fundamentals for Retailers
The basics in retail assortment are easy to overlook.
I was recently asked to contribute a feature article on improving “the front of the house” for a European retailing magazine. It struck the editor that my guidelines were elementary yet universally overlooked. As I pointed out, the basics of retail are hundreds of years old – the technology that gets wrapped around them is what is intimidating.
Here are a the basic guidelines for maximizing retail assortments:
- Start with the customer. In setting your assortment strategy, you must first take a long hard look at your customers and their shopping occasions in your store. Are you a convenient fill-in stop? A twice a year destination? A niche player in a crowded market? Depending on your answers, the requirements for a productive assortment will change. A careful strategy will help you match your assortment to your customers: For the convenient fill-in stop carry low priced, small sized items. For the twice a year destination carry impulse gift giving items. For the niche player carry unique hard-to-find products. You must match your products to your customers to have a relevant assortment.
- Carry Consumables. To create an assortment that will bring your shoppers back, look for consumable items that are used up and require a return. A great example is to sell a planner system instead of a calendar. A calendar is needed once a year while a planner system is refilled throughout the year. Even major home goods have a consumable component. Sell refrigerators? What about food storage systems and sealable bag systems? Sell wood flooring? What about cleaning and maintenance products? Even ultra-long term repurchase cycles (RV’s, hot water heaters, etc) can have a consumable and return component to their assortment.
- Expand Sales with Pivot Products. As customers come to expect your core assortment, look for the natural adjacent businesses you can pivot to. A great company who has done this is Canadian retailer Lee Valley. Known for high quality woodworking products, Lee Valley needed to find a natural way to fill in the March – August lull in the woodworking season. Taking a close look at their core competency (developing high quality hand tools) and their customers, Lee Valley shifted its assortment focus from woodworking to gardening for spring and summer. For their customers, it is a natural pivot from their reputation for durable tools. Once they established that beachhead – and their customers gave them credit for being a trusted garden tool retailer – they expanded their garden assortment into more mainline consumable gardening items. Other examples include Coach’s pivot from handbags to shoes, Home Depot’s pivot from DIY to installation services, Gander Mountain’s pivot from sporting goods to boat sales.
- Invest in Utilitarian Fixtures. As you experiment with new assortment selections, do not invest in custom fixtures that showcase a single business line well. Develop a kit of parts that can service all business types well. For more on this see the past post “5 Fixtures Every Retail Store Needs” Instead of accepting vendor fixtures or racks that will clash with your store and clutter your back room, build a competence in creating eye catching displays, enticing signs and locating new items in a predictable store location to train your customers to look at what’s new.
- Consolidate Vendors. While looking for new items, be sure to keep an eye on the number of new vendors you are adding to your assortment. Single-SKU vendors who offer a small range of products can multiply your administrative chores and eat into profits. Select a handful of trusted, innovative vendors and work directly with them to improve your sales and assortments. In the long -term you will become more important to the vendor and the relationship can build into one where you both invest in improving sales. That’s impossible attention to get from a vendor where you only carry a few items.
Some say selecting a retail assortment is an art. Other say it is a science. All I know is that like many disciplines, it all comes down to transferring a vision to clear execution.