Art of Assortment: How Retailers Optimise Product Placement for Maximum Impact

The placement of products in a store is a complex process that aims to optimise sales and enhance the overall shopping experience for customers. The decisions behind product placement are influenced by a variety of factors, like-

• Customer Preferences: Retailers use data on customer demographics, buying habits, and lifestyle to understand what their customers are likely to purchase. Example- a store located in a small town will have a different product mix as compared to a store in metropolitan city.
• Product Attributes: The type, size, shape, brand, and the number of product variants (SKUs) play a significant role in deciding where and how products are placed. Example- Heavy or bigger products (eg- a 10Kg bag of rice) of the brand/category are usually placed at the bottom shelf for easy pickup.
• Supplier Availability and Costs: The availability and cost of products from suppliers are essential factors. Retailers need to consider lead times, delivery schedules, and supplier reliability. If a supplier can consistently deliver a product at a lower cost, it may be given more prominent placement.
• Location of the store: Location is an important factor to determine Product mix and assortment of the store. Example — Airport stores will have a different product mix as compared to a store in city centre.
• Focus Metric: Product mix and layout is highly dependent on focus metric decided by business. It can be based on revenue maximisation or margin maximisation as per the decided strategy.
• Demand: Retailers leverage historical sales data to predict the future demand of their products. High-demand or frequently purchased items are usually more accessible to customers, while less popular items might be placed on less prominent shelves.
• Store Space and Layout: The available store space and its layout are crucial. Store managers and visual merchandisers need to maximise the use of space. The layout is often carefully planned to lead customers through the store in a way that maximises exposure to various product categories.
• Seasonality and Promotions: Seasonal demand and promotional events, such as holidays and sales, have a significant impact on product placement. Seasonal products are typically moved to prominent areas during their peak times, while promotional items may be placed at the front of the store to attract attention.

Some assortments strategies commonly used by retailers-

• Complementary Products: Ever notice how shirt, jeans, shoes and bags are often grouped together in vertical shelves in an apparel store? That’s because these are complementary items. Placing them near each other makes it convenient for shoppers to complete the look and find everything they need for a specific purpose.

• Private Label Alternatives: Many stores have their own brands of products, often offered at a lower price. Retailers strategically place these private label items next to popular name brands, making it easy for budget-conscious shoppers to compare and opt for the more affordable store brand.
• Seasonal Rotations: Retailers frequently change the assortment to reflect the seasons. For instance, swimsuits and sunscreen in summer, while winter coats and gloves appear in colder months. These changes not only align with customer needs but also create a sense of novelty and anticipation.
• Impulse Buys at Eye Level: Products that retailers want you to buy on impulse, like snacks or small gadgets, are often placed at eye level on the shelves. This makes them highly visible and tempting as you stroll down the aisles.
• Limited-Time Offers: Limited-time or exclusive items can create a sense of urgency and excitement. These are often displayed prominently at the front of the store, encouraging shoppers to check them out before they’re gone.
• Cross-Selling: When you buy a camera, you might find accessories like memory cards, tripods, or camera bags displayed nearby. Retailers want to make it convenient for you to get everything you need in one place.
• End-Cap Displays: Those displays at the end of store aisles are highly coveted spaces. They often feature high-margin, promotional products or new products to catch your attention as you walk by.

• Product Bundles: Stores sometimes bundle related items together at a discounted price. For example, a gaming console with a bundled game and accessories. This strategy encourages shoppers to buy more while feeling like they’re getting a good deal.

Assortment strategies are all about making shopping convenient for customers while maximising focus metric (revenue or margin).

Retailers carefully plan product mix and where and how to place products to meet customer needs, encourage impulse buys, and create a pleasant shopping experience. It’s a mix of leveraging machine learning for demand planning and iterations for space and coverage maximisation and years of business experience to understand customer preferences.

For tailored assortment optimisation solutions powered by machine learning, get in touch with us at TrueGradient.

Let us help you fine-tune your product placement strategy for maximum impact and increased sales.