Given supply chains’ challenging nature, wide product assortments, and poor profitability, the retail industry is among the most challenging. Both existing traditional businesses and e-Commerce merchants face fierce rivalry.
The only effective way to gain a competitive edge is to constantly optimize the selection and improve how the business functions to outdo its rivals. One of the essential tools retailers have at their command is to meticulously plan their product assortment optimization.
Businesses now have the capabilities to pick which products to sell at each of their locations by combining assortment optimization with superior analytics and AI.
Listed below are some effective product assortment strategy approaches retailers can take:
Invest In Data Assortment: Maintaining a fresh assortment optimization and staying on the cutting edge of your industry necessitates systematic data analysis and seizing good opportunities as they come. This involves a proactive strategy and a thorough knowledge of demand trends and historical data.
Big retailers benefit from product assortment optimization because they no longer respond to the market; instead, they are leading it. Sure, this involves making mistakes in the interim because not every new product will succeed. But that’s fine as there is no such idea as a risk-free return.
And since no two businesses function in the same way, deciding on your assortment is a very personal procedure. That is why you require accurate and timely information. Proper assortment planning promotes improved communication among your team members and applies to your vendors as well.
There’ll be more clarity and accountability across your team if you have a well-thought-out vision and assortment optimization process
Map a Detailed Strategy: If you’re considering updating your selection, you’ll have to understand which brands are performing well for your biggest competitors in each category. Some businesses prefer to do this manually, but third-party tools for competition tracking and statistics are available for those who find it too time demanding.
The information you gather turns your assortment planning from an aesthetic to research. A good step toward having an optimum assortment is to have a solid plan for collecting and analyzing competitor data.
It’s a complete method of determining whether or not an investment is needed. You’ll require both previous and contemporary inventory patterns. It’s possible that the brand or subcategory is hot right now, but it’s also possible that it’s on the decline.
Summing Up: After you’ve gathered competition data, you must examine it in light of your situation. Because you can’t offer everything to everyone, consider which goods and categories fit your existing brand identity. Don’t just add a product line because everyone else is.
Find out where you and your rivals differ in terms of product selection. Figure out what they’re missing. There may be gaps regarding product category, manufacturer, or price tier that need to be filled. You may start your segment and cement your business reputation.
Maintaining a well-balanced assortment optimization in retail can benefit your pricing structure and bottom line. You won’t have to engage in a pricing war and submit your firm to bargain cellar rates if you have distinctive products and a high brand value.
Instead, even if you don’t have the best pricing, shoppers will perceive the value in purchasing with you and will choose to do so.