The Rundown: Data-Driven Assortment Strategy
In an era where consumer spending is as unpredictable as a roulette wheel, retailers are turning to data to refresh their assortment strategies. It's no longer about just stocking shelves; it's about curating an experience that resonates with shifting consumer preferences.
The Misstep: Many retailers have been playing a dangerous game of price hikes to combat inflation, but there's a limit to how much consumers are willing to pay. The result? A precarious balancing act where sales volumes dip, and customer visits become as rare as an honest mistake in accounting.
Our Expert Take: It's time to pivot from price wars to data wars. Retailers need to harness the power of data analytics to understand not just what sells, but why it sells. The goal? Create a product assortment that aligns with consumer demand and the retailer's strategic vision.
One Thing to Consider: Conduct a granular, data-driven analysis of your product assortment. This means going beyond surface-level sales figures to understand the profitability of each item when accounting for markdowns, marketing, and logistics. It's about knowing which products are your anchors and which are dead weight.
The retailers who will come out on top are those who treat their assortment strategy not as a static set-up but as a dynamic, ever-evolving masterpiece. It's about being proactive, not reactive, and letting data lead the way to profitability and customer satisfaction.
Aisle Insights: Execute Your Product Assortment Strategy
Getting your product assortment right, consistently, is not an easy task. It takes strategic thought and aligned company-wide understanding to execute properly. But if you follow these three steps, you’ll be well on your way to a data-driven, customer-fueled assortment strategy.
1. Refine Strategy
Align your assortment with your company's broader goals, ensuring that every product on the shelf is a strategic choice that serves your market position and enhances your brand's value proposition.
2. Redefine Profitability
Use data to drive hard bargains with vendors, leveraging insights into product performance to secure better rates and terms, and to make informed decisions about which products to phase out or promote. Conduct a profitability analysis, considering all associated costs, to determine the true value each vendor and product brings to your assortment, and use this to streamline your offerings for maximum efficiency and appeal.
3. Reassess Annually
Establish a regular review process to ensure your assortment remains aligned with strategic goals, adapting to new data and market shifts to maintain a competitive edge and meet consumer demands.