Building a High Performing Product Assortment
Do you have a large, robust product offering and need help trimming it down?
Or maybe you have just one or two products and want to figure out the best way to add more SKUs?
Product Assortment is part science and part art. It’s tackled differently in various industries, including some (like the apparel industry) that have dedicated roles (Merchandiser) for people in charge of product assortment.
While I’ve never been a “product assortment” professional – I’ve overseen product assortment creation and editing for a few businesses, so I wanted to take a moment to share some simple strategies to help wellness and beauty business leaders to review and tackle this topic.
If you haven’t already, you can check out my previous post, where I highlight some of the primary ways that product assortment impacts business performance HERE.
PRIMARY INGREDIENTS
The two primary ingredients when it comes to product assortment planning, are:
Product range/curation
Sales Performance
Of course, there are many other factors that come in to play, and I will touch on a couple of additional elements at the end that directly impact product perception and sales.
1. PRODUCT RANGE/CURATION
When looking at your product assortment, it is important that you are reviewing it through multiple filters. While some brands will successfully dominate a single category, for most, it will be important for your assortment provide sufficient range in an effort to maximize your brand. And with that being said, curation, or careful editing of your product assortment is absolutely necessary in order eliminate dead weight.
When reviewing your product assortment, here are the key filters to consider:
Customer needs & Product use considerations
Categories/Sub-categories
Navigation
Category Representation
Positioning
Examples of key questions to ask yourself:
Are you tapping into your customer needs and how your products are intended to be used? As an example if you’re selling a cleanser, adjacent categories like moisturizers or toners are a no-brainer. Or offering a regular and non-caffeinated variant may serve your customers well.
Are some sub-categories more bloated than others?
Is your assortment easy for customers to navigate and understand?
If you have 1 SKU in one category, while you have 8 SKUs in another, do your products reflect your brand’s intention for each category? If that single SKU a hit, it may be fine – but if it’s a dud, remember that it may skew brand perception whereas a dud within the 8 SKU category may be more forgiving.
When a customer encounters ANY product, does it accurately or sufficient reflect the brand and product positioning?
2. SALES PERFORMANCE
When reviewing your assortment’s sales revenue, deciding on which products to keep and which to discontinue can feel black and white. Strong sales, means keeper, and weak sales means discontinue, right?
Not so fast.
When reviewing product performance, we want to review each SKU and category through multiple filters as well:
Sales by geography
Sales by channel
Sales of related products/categories
Marketing/Communication/Education support
By reviewing your sales through these filters, you will need to consider the following:
Does your brand maximize each region/channel/product category?
Are adjacent products/categories maximized? For example, if you have a top selling product in a given flavor or shade - and have created other SKUs with this customer favorite (flavor/shade) - how are you supporting or cross-promoting these adjacent SKUs?
Is communication and education for each of product weighted appropriately? While management may think that a weak product simply isn’t selling, sometimes a closer look will reveal that less time is spent training the field team on the given product - or the product may not be getting sufficient exposure on your website or advertising efforts.
There are many variables when it comes to purchasing behavior, so it’s important not to expect the same results in each region/retailer/channel/etc. What sells well in one state or country may not perform nearly as well in another.
ADDITIONAL CONSIDERATIONS
There are many factors outside of what the “primary ingredients” above that impact sales performance. Product integrity, marketplace demand, packaging design and marketing, just to name a few.
However, I want to include a few notes on two additional elements before wrapping up: pricing and messaging.
PRICING
Sales performance can be negatively impacted by pricing strategy for a few reasons, and thus it is important to review your product pricing from multiple angles.
How your pricing compares to other brands in your space.
How your SKU-specific pricing compares in relation to the pricing of other SKUs within your assortment.
How promotional pricing strategy compares in relation to your “retail” pricing. This could be bundles, sets, discounts and more.
MESSAGING
Many people under-estimate the value of good copywriting. But I’m not just referring to marketing copy in an ad - I’m referring to the language you use to describe your products.
Here are some things to consider when it comes to messaging, and ensuring that your products have the best chance at becoming high performing SKUs:
Is the language your brand uses easy for customers to understand?
If your product is truly unique – be careful of using the same language as your competitors, as this will not help you differentiate.
There are many opportunities for good copy writing even if you don’t do a lot of traditional marketing. The product name, descriptor, and product descriptions are all opportunities to help your product stand out from others.
Developing a distinct tone of voice ensures that all of your copy sounds like “your brand” and thus helps build your IP and brand assets over time.
What challenges do you face with editing or building your product assortment?