How Product Assortment Optimization can be Your Greatest Competitive Advantage in Retail
Updated: Feb 9, 2021
That’s how the world of online retail can be described in one word.
The world of retail is neck-breaking cut-throat competition. E-commerce embodies constant change in every sphere of functioning. Each day witnesses a particular idea trending, to which online retailers need to keep pace with. One has to be 2 steps ahead of the competitor to survive.
One effective way to do this is by Product Assortment Optimization.
Product Assortment Optimization refers to picking and choosing which products should be added to the catalog for sale and when. While the traditional assortment focuses on the product, brands today are focusing on the customers while assortment planning.
One may wonder why assortment planning and why must one bother with optimizing it. To put
it simply; assortment planning is an opportunity for the retail companies to display a unique assortment of products that may interest the consumer in buying that product. It not only increases profits but also provides a unique user experience to the customers. And that’s why
it needs to be done right.
Product Assortment Optimization – How and Why?
Battling the disruptive force of smart shoppers and intense competition, assortment planning is becoming more intense and complex than ever before. Here are a bunch of things to watch out for when assortment planning to ensure optimized results.
The Endless Aisle
Today’s consumer orders things on the go. They like to have what they want anytime, anywhere. They like options and loads of them. To maximize profits, an assortment strategy must include products and inventories across channels, including all price ranges.
Serving Global and Local Shoppers
The Internet has thrown open markets in regions we didn’t even know existed previously. Now your customer is the one sitting across the street as well as the one sitting in a different continent. To be ahead in the race, it is very important to cater to both.
More is More (for Retail Giants)
Turning physical stored and e-commerce sites into shopping destinations by providing a huge assortment of products, retail giants like Amazon can offer the convenience of unmatched assortments and a single source of detailed product description and reviews.
Know Thy Rivals
Smart retailers analyze their competitors’ assortments to identify which products they have in common and which ones are unique. For assortment optimization in retail, competitive analyses help in identifying product gaps and makes intelligent assortment decisions, such as whether to allocate more marketing muscle and shelf space to exclusive brands or private label products.
Product assortment optimization is all about having the right product pop up at the right place at the right time, simultaneously producing long-term growth and profitability for the retailer.
Contact us at Datahut for your data needs to optimize your business’s product assortment.