Product range management

What is the assortment of goods?
Why do you need to form a product range? What is the principle?
What should you pay attention to when compiling an assortment in a store?
How does the assortment affect business success?
How to manage the assortment of goods?
What difficulties may arise?

An assortment is a diverse but organized list of goods in a store by consumer properties: type, purpose, and characteristics, such as weight, color, size, technical characteristics, and brand.
The assortment is classified by three parameters:

• The number of product groups in the store indicates the breadth of the assortment;  
• The number of product names in each product group is the depth of the assortment;      
• How successful is the combination of different product groups for the store, customer requests, and price forks - balance.     

Why you need to form a store assortment

If five years ago, the lack of new products, varieties of goods, redundancy or non-competitiveness of the assortment could be "forgiven" by the store owner, with the development of online commerce, constant work on the assortment is necessary for market competition and business profitability.

Working with the assortment allows businesses to not only survive, but thrive in the face of fierce competition and the general availability of comparable products.

Principles of assortment formation

To understand what goods to order from suppliers, you need to answer yourself and explain to your employees:

• What categories and types of goods do you sell?     
• What products will you not sell?    
• What channels do you use to sell your products? Only an offline store? Online store? Marketplace? On social media?     
• If there are several stores, will the assortment be individual for each store or not?     
• What is the competitive advantage of your assortment? What should you have that other sellers don't?     
• What is the quality of the product?     
• What is the price segment of the product?     
• What is the width and depth of the assortment? How many items should be in the assortment?     
• How often do you plan to update your assortment?     

Assortment planning is always short-term, because it is impossible to accurately predict customer needs, the appearance of new products on the market, unforeseen legislative changes, and, ultimately, a pandemic.

Who could have imagined in February that in March all the masks and antiseptics would be sold out?

Have you ever noticed how a customer chooses a product? Depending on their habits, goals, and financial capabilities, customers quickly select products one by one.

1. Which product to choose: premium, medium-priced, or inexpensive?
2. What type of product is this?
3. What brand?
4. Ease of use?

The assortment and layout of goods in the store should also be consistent with the customer's decision-making logic.

Display the most popular products in the best places and keep them always available.

There are two principles in the formation of the assortment:

• When the store shapes the needs of customers: it brings new products and thus informs customers about new products and trends.      
• When customers leave a request to add a product to the assortment. For example, in the METRO, there are stands near the exit where you can write by hand what product you want to see on the store shelves.     

Structure of the product assortment

The structure of the assortment of goods in a store is shaped by demand, profitability, and financial capabilities of the business. A business owner must anticipate customer preferences, attract and retain customers by ensuring a stable supply of best-selling products.
The basis of the assortment structure is the Product Classifier, in Torgsoft it is called the Product Type Tree.
The correct formation of the product type tree is the basis of the accounting system, which is used not only to analyze the correct trading results, but also to build the correct structure of the display of goods in the online store.

For example, at the top level of the product type tree in a clothing store, the assortment is divided into women's, men's, and children's clothing.
Next, it is important to follow the logic of the commodity classifier:
That's right:
Clothing:

• Women's clothing
• Dress      
• T-shirts      
• Blouses      
• Jeans, pants, shorts      
• Sports sweater and hoodie      
• Swimsuits      
• Underwear      
• Clothing for fitness and sports      
• Home clothes      
• Hosiery and hosiery products      
• Outerwear     

Men's clothing

• T-shirts ta shirts      
• Shorts
• Jeans and pants      
• T-shirts      
• Beachwear      
• Underwear      
• Scarpets      
• Clothing for fitness and sports      
• Home clothes      
• Clothing for hunting and fishing      
• Outerwear     

Wrong:
Clothing:

• women's clothing;     
• ricaMare women's clothing;     
• men's clothing;     
• men's clothing t-shirts.     

What is important: the product type tree should not consist of the groups "miscellaneous", "T-shirts 1" and "T-shirts 2". The names of types and subtypes must be linguistically dependent on each other and have a hierarchical structure. But each subtype of goods has its own set of goods that will not be related to another subtype.

In practice, compiling a product tree is one of the most difficult tasks in assortment development. There are no universal product classifiers. Each store has its own product classifier. We can advise you to borrow the product classification from the Rozetka marketplace, especially if you plan to sell goods on the marketplace in the future.

Assortment management

The Assortment Management Center mode will help you manage the assortment, track the movement of goods between stores, warehouses, and quickly distribute goods in Torgsoft.

• The parish is displayed in red,
• Receipts from the return are in blue,
• Income from internal displacement is green;
• Realization - in blue,
• Write-offs - in red,
• The cost of internal movement is in green.

Analyze sales

In Torgsoft, Sales analysis by product type, Sales analysis by manufacturer, ABC-XYZ analysis will help you analyze sales. Reports will provide the business owner with a visual summary in numbers of what sells well and what sells poorly. Remove poorly selling products from the assortment or buy a minimum of them. If consumers like the product and it is actively sold, expand the range of this brand, add new models, play with the price, promotions, and special offers to attract more customers to the store.

Ask the buyer

The Torgsoft function "CRM. Interaction with customers". Ask the customer if they found everything they were looking for in your store. Thus, you will replenish the list of relevant products, engage the customer in a dialog and expand the assortment.

Track trends

To do this, use the Google Trends tool - subscribe to topics and words that interest you. If something new comes out, you will be one of the first to know about it. Instagram and Pinterest will be a source of inspiration for you: track popular products, see what social media visitors use, what reviews they write, and expand your assortment based on your observations.
Look at successful competitors, "steal like an artist" - duplicate their success and a well-selling assortment.

Add related products

Accessories can be added to any type of product. Related products perfectly increase the average check and expand the assortment.

Consider seasonality

Skiing in winter, bicycles in summer. The main thing is not to mix it up. And in order not to forget what is stored where, use the Collect goods in a box for seasonal storage option.

Don't forget about the saint

Update your product range for Mother's Day or Trinity Day. But this is not enough. To sell situational products, you need to remind customers about the holiday and your products for it.
We had an example when a store prepared a cool assortment for Father's Day, but the goods sold poorly because customers simply did not remember this date.

Consider the individual

You can bring 10 identical T-shirts to a store, but think about whether your customers want to look the same.

On a business trip to Bohodukhiv, we observed a women's clothing store that was constantly inundated with customers simply because no model was repeated in the assortment. This is appreciated by demanding customers.

Flexible pricing policy

If there are products that have lost their relevance, they need to be sold and removed from the assortment. To do this, use promotions, sales, marketing events, contests, sweepstakes, and bundles. It's no secret that the word "promotion" provokes people to buy goods, even if it wasn't their intention. Fill empty shelves with new offers.

Difficulties in assortment management

No strategy

Why does a small neighborhood store need a strategy, you may ask? You have all your own customers, goods are delivered regularly, sales are the same, and profits are +/- stable. The answer is: to retain and attract new customers. If you have a good dry wine on display, it will be easier for a potential buyer to come to you than to go to a hypermarket.

There is no administrator

As a rule, in small retail chains, the assortment is formed by the management team. The business manager combines employee management, communication with suppliers, business control, and assortment management. It is difficult to do everything. It takes time and reduces the efficiency of store management, and assortment selection requires careful analysis of product sales and communication with consumers.
Assortment management can be delegated to an experienced employee in conjunction with the analysis functions of the accounting system.

There is no service

What does assortment and service have to do with it? The problem lies in the failure to meet delivery deadlines, the lack of control over expiration dates, and the cost of reordering to suppliers when orders are incorrectly placed.
The accounting system will allow you to control the minimum balance of goods at points of sale and notify the administrator of the need to place an order to the supplier.

No automation

Managing an assortment of even 2000 items is extremely difficult without the help of an accounting system. Life flows smoothly into the store, filled with permanent stress and a cycle of routine tasks.

No unique products and novelties

There is no need to fill the shelves with trends, to stuff them with goods imposed by suppliers. But the customer gets used to the "stable" assortment and gets bored. Therefore, add 1-3 new items for ¾ of the types of goods. Analyze their sales using ABC-XYZ analyzes and make a decision: continue experimenting, keep the new product and remove the old one, or vice versa.

Dead seasons

The problem is relevant for stores selling seasonal goods: seeds, fur coats, skis, fishing products. The way out is to diversify the range of goods with related types for different seasons.

Unreliable suppliers

The pandemic has shown that depending on one supplier is a risky business. Expanding your network of suppliers will help you get rid of dependence and diversify your product range.

Falling demand

The coronavirus has made adjustments to consumer preferences: demand for luxury goods has fallen. Accordingly, business owners had to expand their assortment with similar alternative products, but from a cheaper segment or mass market.

Working with the product range in Torgsoft

Forecasting and planning are key to managing your product range. Use the modes to take into account customer demand, taking into account the quantitative, qualitative, and price characteristics of the product:

• Product assortment management center
• ABC XYZ analyzes
• Analysis of sales by manufacturer
• Analysis of sales by product type
• Analysis of balances by maturity
• Analysis of sales intensity