Assortment Strategies

What is an assortment strategy?

An assortment strategy defines the variety and depth of products a retailer offers to optimize sales and meet customer demand. It is built on two core dimensions:
* Depth — how many variations of a single product (sizes, colors, flavors) a retailer stocks.
* Breadth (width) — how many different product types or categories a retailer carries.

Key points

• Assortment strategy balances product depth and breadth to match store goals, space, and customers.
• Originally focused on brick-and-mortar merchandising, it now applies equally to e-commerce and omnichannel retail.
• Good assortment design can increase basket size through cross-selling and impulse purchases; poor design can confuse shoppers and reduce sales.

How assortment strategies work

Retailers choose a mix of depth and breadth based on their format and objectives:
* Big-box retailers often offer both wide breadth and deep assortments because they have large floor and storage space.
* Smaller stores typically cannot support both; they may specialize in a narrow range but offer deeper variations within that niche, or carry a wider range but with limited depth for each item.

Assortment decisions are not one-size-fits-all. Each retailer must tailor its mix to inventory capacity, customer needs, pricing strategy, and competitive positioning.

Merchandising tactics and customer targeting

Assortments can be curated to appeal to specific demographic segments. Grouping related items that match a target customer’s needs (for example, new-parent essentials or seasonal outdoor living) increases relevance and purchase likelihood.

Strategic placement and presentation also drive sales:
* Place complementary items together to encourage add-on purchases (e.g., garden hoses near sprinklers).
* Use feature displays (e.g., a styled patio set) to inspire purchases beyond functional needs.
* Position replenishment items (batteries) near related products or checkout to reduce friction and last-minute forgetfulness.

Drawbacks and risks

Assortment strategies can backfire if not executed thoughtfully:
* Choice overload — too many options can overwhelm customers and reduce conversion.
* Poor placement — mixing unpopular items with top sellers or bad layout can diminish demand for desirable products.
* Overstock and complexity — overly deep assortments increase inventory carrying costs and management complexity.

Practical guidelines

• Match assortment to store format and customer profile.
• Use sales data and customer feedback to refine depth and breadth over time.
• Group complementary products to make buying easier and encourage add-ons.
• Limit SKUs where necessary to avoid overwhelming shoppers and increasing costs.
• Test displays and assortments, then iterate based on performance.

A well-planned assortment strategy aligns product variety with customer needs, store capabilities, and merchandising tactics to improve shopper experience and drive sales.