Customers today shop across multiple channels and are more aware of product quality and prices. Retailers need to study customer behavior and purchase patterns closely to come up with ideal merchandise assortment plans.
Study Customer Behaviour and their Buying Patterns
When planning your product assortment, you need to study consumer buying patterns and analyze this data in combination with customer feedback from reviews, social media shares and surveys. New technological advancements make it possible for you to gain insights into which products capture attention, which aisles customers spend more time in, items that customers often buy together, and so on.
Merchandise Assortment Strategies Based on Customer Data
Now, with big data analytics and SaaS or Cloud-based services, even small retail businesses can invest in advanced analytical tools like Intelligence Node’s Incompetitor to make the most profitable decisions on assortment planning, product placements, and pricing.
Product Groups for Customer Segments
If you are selling fashion clothing, your customer data might reveal the demographics of the customers that spend more on high-priced items and which segments are more cautious in what they buy. For instance, single women might be more willing to spend money on themselves as compared to women with children. You can then plan on having an assortment of high priced items in a separate section specifically intended to target the first segment. You can combine lower-priced fashion apparel and kids fashion apparel in another section to capture the attention of the second segment.
New or Old Based on Customer Demographics
Some products get old quickly, for instance, smartphones. Trend-setters may form a small group of your customer base. These customers will flock to buy the latest smartphone model releases, and you can have a higher margin on these products.
On the other hand, you may also have customers who are in the wait and watch group, who will wait till the dust settles and the prices go down. Still, others will be satisfied with older models that have been tried and tested and satisfies their needs. You need to decide which items to stock more or less of, based on your customer demographic.
Add staples to your assortment
Including more staples in your assortment can lead to more impulse buys and hence, generate more sales. Staples are products that your customers need, rather than want. For instance, if your customer base includes a lot of young parents, you can add diapers to your inventory. Near these diapers, you can place other baby products like toys, baby beds, and blankets to enhance your chances of generating more sales.
Lead Them On
If your store is located in a residential area, you will probably have many customers in need of household supplies. You can use your aisles to guide your customers towards related items. For instance, aisles that display regular cleaning supplies like floor cleaners, brooms, brushes etc. can lead on to sections that sell vacuum cleaners and robotics. Many may decide to spend some money on these higher-priced conveniences, leading to higher sales margins for you.
After your initial product assortment of purchases and placements, always keep an eye on your sales and market trends. You may spot a shift, with many customers buying an innovative new product, or shifting to another brand in one of your product lines that offer more value for the price. Having an extra budget allocation to instantly stock these new items, will help take advantage of the high demand.
Studying customer behavior and purchase patterns, competitor data and market trends can help optimize your merchandise assortment and give your customers what they want by avoiding overstocking or understocking issues. Invest in Retail Analytics products like Intelligence Node’s Incompetitor to make informed decisions and manage your assortments better.