A Holistic Approach to Customer Centric Assortment

In retail, the art of assortment planning has long been a critical factor in determining success. Traditionally, the focus has been on financial metrics such as sales, units sold, and stock holding. However, these decisions' often unseen and underestimated impact lies within customer satisfaction and loyalty.  

The widely-used 80/20 rule, analysing sales data to prioritize items, seems effective at first glance. However, the repercussions of eliminating slow-moving products can significantly affect customers. It's not merely about replacing these items with potentially better-selling ones. It's about acknowledging the unique attributes or niche appeal of certain products. Some items might cater to a loyal customer base or hold exclusive characteristics that set them apart. Deleting such items can compel customers. Particularly the most loyal ones, to seek these products from competitors. This could lead to a loss of that specific sale and a decline in overall basket value. Customers might end up purchasing more from competitors. 

Retaining only the best-selling items might not guarantee improved sales. Within an assortment, products or brands often compete for customer attention. In such cases, customers exhibit low loyalty and easily switch between alternatives based on price or promotions. This behaviour opens up an opportunity for retailers to explore other suppliers. It fosters innovation, higher margins, lower prices, and increased volumes. 

Crafting an assortment that balances the business’s financial goals with customer satisfaction is a blend of art and science. At datasapiens, we emphasize the fusion of business and customer-centric metrics. This amalgamation and expertise from merchandise and commercial teams allow for a comprehensive iteration process. It leads to more informed decisions catering to business interests and customer needs. 

Holistic Approach

The key to successful assortment planning lies in considering a holistic approach. It involves understanding the intricacies of customer behaviour. As well as acknowledging the importance of niche or unique products, and recognizing the potential in exploring alternative options. Retailers can optimize their offerings, enhancing customer satisfaction and improving business outcomes. 

Customer-centric assortment planning isn't just about numbers and sales. It's about creating a shopping experience that resonates with the customer base. It also fosters loyalty, and maximizes the potential for growth. It’s an intricate dance between what the business needs and what customers desire—a balance leading to mutual benefit. 

In conclusion, the evolution of assortment planning must prioritize blending financial strategies with customer-focused insights.

It's this combination that defines a retailer's success—ensuring short—term sales uplift and long-term customer loyalty and satisfaction.