In 2011, a post on HBR said “In retailing, assortment is job one.” Five years later, this statement still holds true. With increased competitive pressures, providing customers with the right product offering is key to staying ahead. But with so many product choices available, identifying what customers are looking for can be extremely challenging.
Retailers have traditionally relied on supplier feedback or analyzed past transactions to determine what products to carry. But in an age where customers have more visibility into product choices and the competition is fiercer than ever before, that’s no longer a reliable solution. An increasing number of retailers are leveraging data and analytics to identify trending products and avoid costly assortment mistakes.
Applying outside-in analytics, i.e. blending freely-available consumer e-demand signals, competitor data and third-party market data with internal web analytics and transactional data, can help retailers identify the products that are trending in the market, understand how they compare with the competition for those products, identify where they are under-represented, where they should expand or rationalize their assortment.
Using this analytical approach, one of the world’s leading omnichannel sporting goods retailers has uncovered opportunities to increase conversions by 3-4% by addressing assortment gaps in certain categories. For example, they identified 17 out of the top 40 trending baseball bats, 11 of the top 30 trending mitts, products in specific price ranges, and fringe size offerings that were missing in their assortment.
To learn more about how leading retailers and brands are using data and analytics to improve decision-making and drive business growth, download our eBook Analytics in the Sporting Goods Industry: Four Success Stories.
Mihir Kittur is a Co-founder and Chief Innovation Officer at Ugam. He oversees sales, marketing and innovation and works with leading retailers and brands with insights and analytics solutions around their category decisions to improve business performance.