The four dimensions of the assortment

When developing its marketing strategy, a company can decide to take advantage of an artificial intelligence solution to optimize the assortment of its physical or online point of sale. Thanks to predictive models, the quality of the assortment will allow the company to reach its commercial objectives with an efficient and profitable point of sale.

The products or services offered must be adapted to the market and ensure consumer satisfaction. The permanent or seasonal assortment offered is characterized by its width, depth and height. These dimensions are analyzed according to the categories of the product groups and families.

What is an assortment?

In a marketing context, the assortment is the set of products or services available for sale in a store or in an online catalog. An assortment can be built based on different factors, such as:

the company's line of business;
the target customer (profile, behavior, purchasing power);
the market study (confrontation of supply and demand);
the assortments of the competition;
the geographical location of the point of sale;
the specific needs of the catchment area;
the positioning and the commercial policy of the sales outlet;
the desired brand image;
the sales area;
the possible seasonality of the activity;
the life span of the products;
the profitability of the product.

To understand the dimensions of assortment, it is necessary to understand the difference between assortment, range, category, group and product family. The term range is used when talking about the assortment of a brand or a manufacturer, and not of a distributor. The category of a product refers to its classification, which can be made according to its life span: we distinguish between durable goods, non-durable goods and services. A product group is a set of products that correspond to the same category of need. Product families group together products that meet the same particular need.

The breadth of the assortment

The first dimension of the assortment is its breadth, or size. The size measures the number of product groups available for sale in the store or on the merchant site. It is therefore the total number of references (or articles) offered by the company to its customers.

Generally speaking, there are seven product groups:

groceries;
liquids;
fresh products;
drugstore, perfumery, hygiene and beauty;
household equipment;
personal equipment;
personal well-being and leisure.

An assortment can be considered as high breadth or low breadth. An assortment is said to be low breadth when few references or few product groups are present (one or two groups).

On the contrary, the assortment is said to be high breadth when there are many references, i.e. when the majority of the seven product groups are present in the point of sale or online. In this case, the consumer has many possibilities to choose from. Large assortments are characteristic of large stores such as hypermarkets for the mass distribution sector.

The breadth of the assortment is in fact the result of the relationship between the width and depth of the assortment.

The width of the assortment

The width of the assortment measures the number of families offered for each product group. For example, among the products belonging to the home furnishings group, we find do-it-yourself products, furnishings, paints and linen. As for grocery products, we consider the families of canned goods, spices, pasta, rice and cereals.

The assortment can be considered wide or narrow depending on the number of families counted.

The latter is said to be narrow when there are only a few families offered for each group. This is the case, for example, for car dealerships, bookstores, sports equipment stores and travel agencies in terms of services.

On the other hand, a wide assortment exists when many families are offered within the same product group. Such an assortment covers a large part of the consumers' needs. This is the case, for example, in a popular clothing store or a supermarket.

In the case of a self-service outlet, the width of the assortment can be assessed through the number of shelves dedicated to a product group. For brands, the width of their assortment can be measured by the number of product lines offered.

The depth of the assortment

The depth of an assortment measures the number of references available per product family. These references or articles are differentiated according to their colors, their size, their brand, their packaging. It is for example the number of different models of sweaters in a ready-to-wear store or the number of different models of vehicles in a car dealership.

The assortment can be deep or shallow. The more items offered by each family, the deeper the assortment. This gives the consumer many options when choosing a product. For example, DIY stores and jewelry stores offer rather deep assortments.

On the contrary, the fewer references there are for each family, the more superficial or shallow the assortment. In this case, the customer has very little choice among the products offered. This is particularly the case in convenience stores or small bakeries.

The height of the assortment

The height of the assortment characterizes the price level offered by the company for its goods or services to customers. These prices are set according to various parameters, including:

the average cost acceptable to the consumer according to his purchasing power, his behavior and the perceived quality/price ratio of the product or service;
a cost analysis to know the current profitability of the company;
a competitive analysis to know the prices charged by the market's competitors and thus position the company in relation to the competition (skimming, penetration or alignment policy).

Price variety is a real asset for any company. The consumer may be looking for a low price on one product and a high price on another. Varied price levels therefore increase the probability of attracting customers to a store and then retaining them.

The height of the assortment can be assessed according to the characteristic values of the prices charged:

the lowest price;
the average price of the offer (PMO) corresponding to the sum of the prices divided by the number of references proposed;
the average price of the demand (PMD) corresponding to the realized turnover divided by the number of products or services sold per unit;
the highest price.

In addition to these first three dimensions, it is interesting to consider the consistency of the assortment. The consistency of the assortment is sometimes neglected, but it is nonetheless important to ensure its quality.

Although they come from different product groups and families, the products (or services) offered by the company must be consistent with each other from their selection to their arrangement in the point of sale. When a new product is listed, the general balance of the assortment must not be disturbed. By ensuring the coherence of its set of products or services offered for sale, the company has a better chance of being credible in the eyes of the customers and of gaining their trust.

The dimensions of the assortment as a reflection of the company

Breadth, width, depth, height and consistency are all elements that represent the nature of the store or the company's positioning. For brands, manufacturers and retailers alike, every decision they make about the size of an assortment is critical to the effective development and deployment of their marketing strategy.

A narrow and shallow assortment is specific to a store with a very limited variety of products. Inventory management is facilitated by a relatively small number of items. In general, this type of assortment is only suitable for consumers with one particular need and for whom the limited choice is not a concern.

A broad and shallow assortment characterizes a store with many product families, which are very limited in terms of the number of products offered. This type of assortment is suitable for consumers who have several needs to satisfy, but who do not really care about the product itself.

A narrow and deep assortment is characteristic of a store that focuses on particular product families, which are rich in different products. This type of assortment is ideal for consumers who have a particular need and want flexibility in their purchasing decision.

Finally, the broad and deep assortment is the model most commonly seen as ideal for accommodating heterogeneous consumer tastes and needs for variety. These assortments, which cover almost all consumer needs and offer almost unlimited choice, are mostly offered by hypermarkets.

Whatever the sector of activity (mass distribution, specialized retail, fashion, luxury, industry, catering, tourism, events, insurance, etc.), the use of predictive models to choose the right assortment can only be beneficial to the company. Assortment optimization can be facilitated by predictive analysis of sales, cash flow and traffic.