Develop a Strategy that Offers the Right Product Mix for Your Market
One of the most critical elements of operating a successful home improvement store is offering a retail assortment with the right product mix. Achieving the ideal combination requires a well-thought-out process that considers the customer’s preferences in addition to the demand products generate in the marketplace. When faced with thin profit margins, it’s essential that every product adds value and motivates shoppers to make a purchase. Optimizing an assortment that stands out from competitors is fundamental to driving customer engagement and positioning the company for long-term growth. There are several assortment strategies that retailers implement to achieve their objectives.
- Focused Assortment: Differentiates a business from competitors in a crowded market by creating a unique shopping experience. Offers shoppers exclusive products that are primarily promoted as high-quality house brands.
- Broad Assortment: One-stop shopping that appeals to customers who want the convenience of having everything in one place. The best example of this strategy is Walmart.
- Dynamic Assortment: Merchandise is continually updated to reflect trends and to accommodate customer preferences.
- Deep Assortment: Offers a depth of assortment and many items in each category. Particularly effective in the big-box home improvement market.
- Customer-centric Assortment: Uses data to personalize shopping and suggest products. This method is highly effective for e-commerce businesses.
Building a Strategy for Your Business
As with most things, the results retailers hope to achieve should start with a well-defined strategy that incorporates specific steps with questions that need to be answered.
Who is the target audience?
Building the best retail assortment for your market begins by understanding the customers you want to shop for your business. Studying their demographics, psychographics, and buying patterns will provide insights to help you select products that best meet their needs. Any assortment you build should consider age, interests, income, and product preferences. Making customers your top priority should guide your marketing, staffing, and sales approach.
What Products Are in Your Assortment?
Reviewing your present product assortment will give you a good idea of what items to keep and what merchandise to discontinue. Customers prefer products that pique their interest, as well as new introductions to the marketplace. The key is stocking various products that can quickly solve maintenance and home repair problems. This model typically includes favorite brands that have been around for years, core products that anchor the category, and items currently in high demand. The point is to improve assortments to maximize sales continually.
What is the Feedback from Customers?
Soliciting customer feedback and listening to what is said about products helps businesses remain relevant and in touch with what people want to buy. Most importantly, encourage customers to tell you what items they want you to sell and what’s already available. People are always willing to critique products that work well and share insights about those that perform poorly. This type of feedback is very beneficial when selecting inventory for the upcoming season. Since in-store feedback can be limited, reviewing comments on social media and the company’s website is also a good idea.
Are you using POS Data?
Retailers have a wealth of information about customers at their fingertips. Point-of-sale systems can provide details about purchasing history, demographics, and other information that can provide a better understanding of who shops in your store. This data can be used to send targeted emails and deliver personalized messages via social media or to post details about upcoming sales on the company’s website. It’s essential to keep an eye on trends and competitive activities in your market to remain relevant and forward-thinking.
Continually Update Your Strategy
The retail strategy you develop should continually evolve and be subject to change. New products are being introduced every day to satisfy consumer demand. When you attend trade shows and conventions, learn as much as possible about the products your customers will expect to see in your store in the upcoming season.
