Assortment

What the assortment covers

The assortment is the total of items a retailer offers. It is described by two measures. Breadth counts the number of product groups, meaning how many different needs are covered. Depth counts the variants inside a group, meaning colours, sizes and versions. A broad and shallow assortment covers many needs with little choice per need. A narrow and deep assortment serves few needs very completely.

In online retail depth has a structural advantage. An online shop does not have to fill shelf space, which is why depth costs less there and returns more, because it is visible to search engines and to the customer choosing. The advantage ends where variants become dead stock and tie up capital.

Why too much choice harms

The number of options does not work in a linear way. Up to a point the likelihood of purchase rises, because the customer finds what they are looking for. Beyond it, it falls again, because the decision becomes harder and the customer postpones. Anyone placing twelve models side by side often sells less than with four well chosen ones. The effect touches satisfaction as well: the more options, the more often a decision is second guessed later.

How an assortment is planned

• Start from the need: the unit is not the item but the job a customer wants done. Building that connection reveals gaps in the offer.
• Assign roles: every item has a job. Some bring frequency, some the margin, some the image. Without those roles every item is judged by the same standard.
• Check the fringes: items with very low sales cost maintenance, stock and work in the description. They need a factual reason to stay in the range.
• Tier the prices: a clear tiering into entry, middle and premium gives orientation. A muddled price range makes customers hesitate.

What belongs in the review

The basis is an analysis by contribution margin and not by revenue, so that the highest selling items with a weak margin do not drive the planning. The view of the bundle comes on top: some items are rarely bought on their own but often together with others, and therefore contribute to revenue indirectly. And finally the question of whether a gap in the offer is a real need or merely the wish to look complete.

Frequent questions

• How many items should a shop have? There is no number. What matters is that every item has a job.
• Widen or deepen? With saturated demand, deepen. With an unclear audience, sharpen rather than widen.
• When does an item have to go? When it brings neither revenue, nor frequency, nor a contribution through the bundle.