Assortment Strategy - Explained
What is an Assortment Strategy?
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What is an Assortment Strategy?
An assortment strategy seeks to display a variety or all products in a company's inventory that will be displayed for sale. The seller generally provides details of products, such as the depth, breadth, and width of products.
Academics Research on Assortment Strategy
- Retail assortment: more better, Broniarczyk, S. M., & Hoyer, W. D. (2006). Retail assortment: more better. InRetailing in the 21st Century(pp. 225-238). Springer, Berlin, Heidelberg.
- Efficient retailer assortment: a consumer choice evaluation perspective, Amine, A., & Cadenat, S. (2003). Efficient retailer assortment: a consumer choice evaluation perspective.International Journal of Retail & Distribution Management,31(10), 486-497. This research shows that to reach their prime goal of building an efficient assortment, retailers need, beside increasing the outlets costefficiency, to evaluate shoppers assortment perceptions so that what the store actually offers can be tailored to meet customers needs and expectations. Our findings reveal that consumers perceptions of the assortment range stems from the combination of few indicators, mainly the number of stockkeeping units proposed and the availability of the favorite brands. Also demonstrates that consumers evaluation of the overall store assortment draws on the perceived choice within the product categories where they are highly sensitive to the assortment range.
- How to launch a high-tech product successfully: an analysis of marketing managers' strategy choices, Hultink, E. J., & Schoormans, J. P. (1995). How to launch a high-tech product successfully: an analysis of marketing managers' strategy choices.The journal of high technology management research,6(2), 229-242. The launch strategy for a new product is a crucial decision issue for marketing managers. Little agreement exists however about the content of a launch strategy and about the individual and combined effects of its constituent parts on new-product success. In this study, the relative importance of some launch strategy tactics (pricing, promotion, product assortment and competitive advantage) on the expected success of the new product is investigated by using a one-third fractional conjoint-analysis design. All respondents (N= 28) were product and marketing managers in the Dutch consumer electronics industry. The results of the study showed that two clusters of managers can be identified with distinct preferred launch strategies. The first cluster of managers preferred a penetration pricing strategy, a small product assortment and a customer oriented promotional campaign. The second cluster of managers preferred a skimming strategy while keeping the product assortment small. We discuss criteria for assigning managers to one of the two clusters and discuss implications of the study for further research.
- The retail accordion and assortment strategies: an exploratory study, Hart, C. (1999). The retail accordion and assortment strategies: an exploratory study.The International Review of Retail, Distribution and Consumer Research,9(2), 111-126. Retailer merchandise assortments need to be constantly reviewed and developed to retain existing and attract new customers. Diversification and specialization are two extreme assortment strategies which are periodically pursued by retailers, forming the basis of the retail accordion theory. While this theory attempts to synthesise the patterns of diversification and specialization, empirical research into the factors explaining variations in diversification and specialization decisions tends to be sparse and anecdotal. This paper focuses on the rationale behind the contrasting assortment strategies of two retail sectors. It presents an exploratory study of ten UK retail multiples. The results of in-depth interviews with senior managers are discussed, the possible constraints on portfolio innovation are determined and the retailer perceptions of the extent of diversification are identified.
- Category management and coordination in retail assortment planning in the presence of basket shopping consumers, Cachon, G. P., & Kk, A. G. (2007). Category management and coordination in retail assortment planning in the presence of basket shopping consumers.Management Science,53(6), 934-951. This paper studies the assortment planning problem with multiple merchandise categories and basket shopping consumers (i.e., consumers who desire to purchase from multiple categories). We present a duopoly model in which retailers choose prices and variety level in each category and consumers make their store choice between retail stores and a no-purchase alternative based on their utilities from each category. The common practice of category management (CM) is an example of a decentralized regime for controlling assortment because each category manager is responsible for maximizing his or her assigned categorys profit. Alternatively, a retailer can make category decisions across the store with a centralized regime. We show that CM never finds the optimal solution and provides both less variety and higher prices than optimal. In a numerical study, we demonstrate that profit loss due to CM can be significant. Finally, we propose a decentralized regime that uses basket profits, a new metric, rather than accounting profits. Basket profits are easily evaluated using point-of-sale data, and the proposed method produces near-optimal solutions.