How to Create Winning Product Assortments in Retail: 6 Tips

Getting your product assortment right is one of the most important — yet trickiest — things to do in retail. Having a good merchandise mix requires both an art and a science. You need data, a deep understanding of your customers and trends, as well as some foresight and intuition into what your customers want.

This post will give you an overview of assortment planning and optimization, and will offer tips so you can implement the practice successfully in your retail business. 

Product assortment defined

Product assortment, sometimes referred to as merchandise mix, refers to the variety of products that a retailer stocks and sells. It’s made up of two key components:

1. Product breadth, which is the variety of product lines in a store. Product breadth is all about how wide and diverse an assortment is. A retailer that sells many different types of products is considered to have a large product breadth. One example is Walmart, which sells everything from toilet paper and diapers to PJs and jackets.

2. Product depth refers to the number of variations within a particular product line. This time, it’s all about how deep an assortment is in a given category. Most specialty retailers have deep product assortments. For instance, a store that specializes in office supplies can stock the same type of pen but in various colors. 

Wharton School of the University of Pennsylvania sums it up quite nicely:

Optimizing your merchandise mix: 6 product assortment tips

Every store is different, so there’s no one-size-fits-all product assortment strategy that would work for everyone. But there are a handful of general guidelines and pointers you should consider when coming up with the right product mix.

Check them out below. 

1. Get clear on your store’s image and purpose

The first step to having an optimal product assortment is to recognize who you are and what your brand means to your target customers. 

Who are your customers? How do they perceive your store and what purpose does it serve? 

Pondering these questions will help you determine the right product breadth and depth to implement. 

For instance, if you cater to die-hard fans of card games like Magic: The Gathering or Pokemon, you’ll want to have a deep assortment of cards within the key games that your customers love, as opposed to say, stocking a wide variety of products beyond games. 

Stratagem Cards & Games in Australia is an excellent example of a store with a deep product assortment in select categories. Stratagem offers the largest gaming space in Perth and has earned the reputation of being the “go-to place for tabletop gaming North of the river.”

One of the keys to Strategem’s success? Its deep product assortment. “We make sure that we always have a good range of the current most popular gaming products,” shares Mark Lester, founder at Stratagem Cards and Games. “Our range of D&D products, X-Wing and Dice are the best in Perth.”

Further Reading


Discover how Stratagem Cards & Games keeps its store fresh and engaging through community-building and great customer service.

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Of course, deep assortments in select categories isn’t the best strategy for everyone. If you cater to a more diverse demographic and your customers that fall into different age groups, then you’re better off going wide with your assortment.

For instance, gift shops that attract everyone from lone travelers to families and even local shoppers should stock various product types, like key chains, clothing, toys, mugs, etc. 

35th+Butter, a store in Walla Walla, Washington, which sells home accessories, clothing, and gifts, is an example of such a store. The shop is loved by locals and tourists alike and it’s known for carrying an eclectic mix of products that make for perfect gifts (even to yourself).

Further Reading


Read about how 35th+Butter keeps their assortment fresh and engaging. Hint: the owners use both their intuition and data.

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The bottom line: When you’re clear with what your brand is and what it means to your customers, you’ll make better assortment choices. Failing to get this right may confuse or alienate your shoppers.

If your best customers love a deep assortment and you suddenly go wide and start stocking things outside your core categories, you could send shoppers packing. On the other hand, if you serve a wide customer base and your assortment isn’t varied enough, then those shoppers may choose your competitors.

2. Analyze your inventory data

While sales and inventory data are most useful for deciding how many units to order and stock, they can also contain nuggets of information that you can use in your product assortment strategy. 

For example, if merchandise from a particular brand or designer keeps selling out, you may consider expanding your range with more products from that designer. Or if you find that shoppers are purchasing different colors or sizes of a particular product, you could take that as a sign to deepen your range and stock even more variants of that item. 

Dig through your reports and pay close attention to what’s selling, then use that information to decide if you need to expand or deepen your assortments. 

Vend Tip


Vend’s comprehensive reporting lets you monitor what’s selling and what’s not, so you can forecast trends, make informed buying decisions and keep your stores stocked with products that sell.

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3. Observe shopping habits and patterns

It’s not just about stock levels and numbers. You should also pay attention to how people behave in-store and online. Gleaning insights into your customers’ shopping habits and patterns can help you figure out the right product mix in your stores. 

In-store shopper observation

You and your associates should pay attention to how shoppers behave on the sales floor.

Which products do they explore most? What questions are they asking? Knowing these things can supplement the inventory data we talked about earlier. 

For instance, if shoppers always asking if you have more sizes or colors of certain items, it may be time to deepen your range. If they buy the same colors and ignore the rest, then you’ll want to remove the non-movers.

Another great thing to observe is the items that people typically purchase together. Let’s say you sell skincare products and discover that your shoppers want to purchase facial masks while they’re buying cleansers, toners, and moisturizers. In this case, it may make sense to start expanding to masks. Otherwise, you could risk losing customers to competitors with a wider range of products.

Online shopping behavior

You should also observe people’s website browsing. One area to look into is your on-site search. Take note of what people are typing into your site’s search box. Are there brands, product types, or variants that keep showing up? Use that information to decide on what items to stock up on. 

The home improvement store MyD.IY.ie did just that and found great success. According to Alan Grant, the store’s owner, they pay close attention to their on-site searches to figure out what to stock. 

“We have reports that we look at the end of every month or every week even. If a customer is searching for a Makita drill or a DeWalt drill and we don’t have it in stock, then we know it’s something to consider.”

“Or, if a shopper is looking for a particular type of lawnmower or something, and we haven’t got it in stock, then we put it on a restocking list, and we have a chat at the end of the week.”

Further Reading


Learn about the 3 clever inventory tips that helped MyDIY.ie achieve 30% year over year growth.

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4. Pay attention to local and national trends

Certain trends can also influence your assortment at a given time, so pay attention to what’s happening in (and perhaps even outside) your market. 

Take the COVID-19 pandemic as an example. Health and safety concerns, lockdowns, and the shift to remote work changed the behaviors and needs of consumers, which resulted in an increased demand for certain products. Think: face masks, loungewear, home office equipment and even baking supplies. 

The homeware retailer Crate and Barrel, for example, sold more bread makers in April 2020 than all of 2019 because more people were staying home and baking.

Retailers that adapted and came up with assortments based on the needs of shoppers were able to capitalize on consumer demand. 

The takeaway? Look into current events and trends, then be prepared to switch up your assortment strategy (even if it’s just temporary). 

5. Remember that seasonality is important

Seasons should also be taken into consideration when planning your product mix. Depending on the time of the year, you may need to narrow down your assortment for certain categories while widening the others. 

For instance, during the warmer season, you’ll want to carry a wider and deeper assortment for summer apparel, while scaling back on outerwear. If a holiday or shopping event is coming up, you’ll need to modify your assortment accordingly. 

During the back-to-school season, for example, it may make sense to carry more variants of pens, markers, and notebooks.

6. Use the right tools

Creating a winning product assortment can be tricky, but you can make your life easier by arming yourself with the right tools. In addition to a solid inventory management system that makes it easy to track stock levels, add variants, and count your merchandise, consider investing in assortment planning tools that can streamline the process. 

From tables and databases to apps that leverage AI to help you make assortment decisions, there are plenty of platforms out there that you can check out. 

Here’s a quick list that we shared in our post on assortment planning:

You can also use a planogram, which is a detailed drawing of your store, layout, retail merchandising displays, and product placement. Planograms are used to maximize profitability. Some great planogram software options include: 

Creating the right product assortment is both an art and a science

Getting your merchandising mix requires a combination of data and intuition.

A deep understanding of your market and your customers’ shopping habits, combined with sales and inventory data — plus the right tools to boot — will enable you to come up with winning product assortments that drive traffic and sales. 

About Francesca Nicasio

Francesca Nicasio is Vend's Retail Expert and Content Strategist. She writes about trends, tips, and other cool things that enable retailers to increase sales, serve customers better, and be more awesome overall. She's also the author of Retail Survival of the Fittest, a free eBook to help retailers future-proof their stores. Connect with her on LinkedIn, Twitter, or Google+.