A retail assortment strategy involves the number and variety of products displayed for sale to consumers.

FREMONT, CA: Retailers (in-store and online) utilize assortment strategies to discover the ideal product mix for their daily inventory. Customers engage directly with the product mix on display and make purchasing decisions depending on what they see, making them vital to the retail industry.

Assortment strategies are defined by two factors:

Product Width: Product width refers to a retailer's assortment of product lines. The retailer's product breadth consists of all product lines available to customers. For instance, supermarkets may sell food, cosmetics, and over-the-counter medical supplies.

Product Depth: Product depth refers to the assortment of products available within each product line. For instance, if the retailer is a cereal store, they will likely carry hundreds of cereal varieties. Product depth is determined by product diversity. A retailer's assortment tactics are influenced by the breadth and depth of the products offered. They should result in optimal product mixes that drive sales and increase the possibility of customers making favorable purchase decisions. The tactics adopted may be contingent on the physical capacity of stores; smaller stores typically lack the space for an extensive product breadth and depth, and as a result, they tend to prioritize one or the other.

For instance, a specialty retailer, such as a cereal store, is likely to have a low product width (few product lines) but a substantial product depth (numerous options for each product line). In other words, they are likely to sell only cereal but will provide a variety of cereal selections. On the other hand, a wholesaler like Costco will likely have a significant product breadth (many product lines ranging from fresh fruit to apparel, home furnishings, and accessories) but a shallow product depth (only a few options in each product line, e.g., offering).

Assortment strategies can increase revenue and help retailers acquire new customers if appropriately employed. They are essential because they determine the products a customer interacts with, influencing a purchasing decision. A business may provide different ice cream flavors during the summer and monsoon seasons.

Similarly, a clothing business is likely to stock items in the spring and summer (possibly more swimwear) than in the winter (more jackets). This satisfies public demand and boosts sales. Similarly, complementary goods, such as toothbrushes and toothpaste, are intentionally arranged in supermarkets to encourage people to purchase more than they intended.

However, selection methods might be detrimental if the product mix and distribution do not appeal to the store's clientele (or the website, for e-commerce retailers). For instance, having too many options within a product line can frustrate clients because it makes it more difficult for them to choose. Conversely, offering too little variety can frustrate specific customers and negatively influence sales revenue.

Before establishing a suitable assortment strategy and product mix, it is crucial to undertake significant market research on various aspects, such as the target consumer group, region, climate, and other customer-based preferences.