Retail Strategy 101: Product Breadth, Depth and Assortment
Understanding Basic Industry Terms
In the retail industry, product breadth refers to the scope and variety of products that a store offers. A good selection of merchandise is key to attracting and keeping customers, no matter what type of products you sell. But having too many different products in too many categories can be confusing and cause shoppers to have too many options where they freeze up.
Finding a balance between product breadth, depth, and the merchandise mix will be critical to your store's success, but first, you need to understand what it all means. These are the fundamentals of retail inventory strategy, and if you begin with a clear understanding of it, you will find it helpful for years to come.
In its most basic definition, product breadth is the variety of product lines that a store offers. It is also known as product assortment width, merchandise breadth, and product line width.
For instance, a store may only stock four items of each SKU, but their product breadth (the variety) may consist of 3,000 different types of products. A big box retailer like Walmart or Target often has a large product breadth.
The other part of the retail inventory equation is product depth (also known as product assortment or merchandise depth). This is the number of each item or particular styles that you carry of a particular product.
For instance, a store may strategize that to keep inventory costs down, they will have a shallow product depth. This means they might only stock 3-6 SKUs of each product in the store. A good example of a store with good breadth but less depth are club stores like Costco, which sells almost everything under the sun, but only one or two options for each type of product.
Breadth + Depth = Product Assortment
The product breadth is the number of product lines, while the product depth is the variety within each of those lines. These two elements combine to make up the store's product assortment or merchandise mix.
Specialty retailers will likely have a smaller product breadth than a general merchandise store. This is because their products have a narrower focus and specific niches. However, they may have an equal, if not wider, product depth if they choose to stock a greater variety of each product line.
A candle store, for example, will have a smaller variety (or breadth) of products than a corner drug store, even if they have the same number of products in inventory:
- The candle store stocks only 20 varieties of candles (the breadth), but they may stock 30 colors and scents (the depth) of each of those candles.
- The corner drug store stocks 200 different products (the breadth) but may stock only one or two variations, brands or styles (the depth) of each product.
These two stores have entirely different strategies for their product assortment because of the needs of their customers.
Fragrance and color are more important to the candle store customer than having 100 candle styles to choose from. On the other hand, convenience is essential to the drug store customer and they may want to pick up toothpaste and batteries in one stop. The drug store needs to stock all of the essentials, even if there is only one option for each.
Seasonal Merchandise Mix
A store's merchandise mix may also change with the seasons. Many retailers choose to add a greater variety during the busy holiday shopping season. This is a good strategy because it gives customers more gift-giving options. It can also allow the store to experiment with new product lines without making a big investment in inventory.