As a retailer, the merchandise you choose to stock acts as the fuel powering your entire business. Get your product assortment right, and you will drive excited customer traffic translating into surging sales and healthy margins. But make poor inventory decisions, and you’ll quickly find yourself sitting on piles of unsold, outdated stock hemorrhaging cash.
Mastering the delicate art of curating an optimal product mix requires careful analysis of your consumer demographics, sales patterns, and market opportunities. With intentional data-driven merchandizing strategies, you can select items guaranteed to fly off shelves while sidestepping potential duds.
Identify Your Heroes and Zeros
The first step toward optimized product selection is conducting a thorough inventory audit categorizing your current merchandise into distinct performance tiers. Which products are your consistent all-star sellers? Which products are weighing you down?
Most retailers use inventory management software providing detailed sell-through data, replenishment rates, gross margins, and other key performance metrics for every single SKU. This granular intelligence shines a spotlight on those “hero” items to double down on as well as the slowest movers prime for clearance and discontinuation.
Quick Inventory Turnover = Cash Flow
While trendy limited-stock items generate plenty of retail buzz and consumer enthusiasm, they should not comprise the bulk of your product mix. That is an inventory management nightmare waiting to happen.
Instead, seasoned merchants typically construct their assortments with a solid foundation of “bread and butter” core essentials proven to provide steady sell-through rates and rapid inventory turns. These are the wardrobe basics, replenishment goods, and functional commodity items customers continually demand.
For instance, many apparel retailers dedicate healthy space to baseline items like bulk sunglasses, basic tees, denim, athletic wear, and accessories cycling through inventory every few weeks. According to the good folk over at Olympic Eyewear, this ultra-fast inventory turnover keeps cash flowing smoothly with minimal overhead costs or stagnant stock building up.
Cultivate Treasure Hunt Discoveries
Of course, no product selection is complete without integrating some tantalizing unique finds that get shoppers excited about treasure hunting. Perhaps it’s an exclusive indie apparel brand, limited import goods, novel seasonal novelties, or artisan accessories.
While these specialty items do not necessarily become mega-sellers, they inject energy and desire into the customer journey. Offering unique, can’t-get-anywhere-else products delights customers seeking differentiated finds beyond basic commodity goods found everywhere.
And when properly merchandised as supplemental discoveries complementing your core sellers, these product gems boost average ticket values and create their own demand cycles through perception of fleeting availability.
Strategic Profit Boosting Opportunities
Amid all this product curation, savvy merchants also look for strategic opportunities to amplify their profit margins and revenue chemistry through smart inventory buys.
Countless retailers have also found success spotlighting premium limited allocation goods at luxury price points. When balanced with ample opening price point options, these upscale splurges allow customers to treat themselves guilt-free while significantly inflating total transactions.
By analyzing your specific customer demographics, you can determine their precise needs, demands, and willingness to engage. Customizing your product assortment to meet specific preferences means you can increase sales momentum at the cash register.
Conclusion
At the end of the day, your product selections represent your single greatest revenue growth opportunity and competitive advantage. Becoming a student of category management backed by unrelenting data scrutiny means you can devise highly tuned assortments minimizing dead inventory while perpetually activating the desire centers in customers’ minds and wallets.
It takes discipline, analysis, and a constant pulse on evolving preferences. But those efforts provide merchandizing mastery capabilities that competitors simply stocking shelves lack. Ultimately, that prowess manifests in stronger sell-through rates, maximized inventory productivity, and robust top-line sales. Now that is a formula for serious growth.
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