A software product for writing product matrices. Product assortment matrix. Determining the articles that will be included in AM

05.12.2023

Ugh... Product. But making only one product or one service is wrong. This way you will lose most of your money.

And even an assortment of thousands of items may not save you. It is necessary to approach not only quantity, but also “quality”. You need to know not only how much, but also what.

Brick by brick

You need to create so many products in your company that all the needs of all your customers are covered. After all, if a person has a need, he will solve it, the only question is – will he do it with you or with a competitor?

Therefore, the formation of an assortment matrix is a mandatory action from a marketing point of view.

What is it? An assortment or product matrix is a list of all product names, the entire product range, approved for a specific point of sale, and compiled... So, stop! Too smart.

Product matrix– these are goods (services) in your business that you create or purchase taking into account various factors.

I think it's simpler and clearer this way. I’ll say more, you already have it, but it’s not a fact that it’s in perfect condition.

Our task for today is to figure out what you have and what you lack to increase sales. So put on your wetsuit, we're diving into the deep end.

While we are still in shallow water, let’s first determine what factors the product matrix is built from.

After all, it depends not only on the area of business. Everything is much more interesting. So, when shaping our products we must consider:

Market demand now;
Future trends;
Competitors (range, prices, advantages);
Features of the city, climate, living conditions;
Location of the point of sale;
Area or size of the company.

Based on the above data, an assortment matrix is compiled for successful sales of goods and services.

Therefore, if you are going to do everything wisely, you need to start with analysis. This is not the fastest way, but it is the most effective.

You need to analyze not only the external market, but also yourself. If you are an experienced company, you need to look at current sales and their profitability.

If you are a company that is just gaining momentum, then you need to understand where you are moving.

At one time we were shaking up our services and realized that for some of them we were not associated in the market.

That is why sales on them were extremely low. As a result, we replaced some of the services. Moreover, we did such an analysis not only on the scale of the service, but on the scale of work formats in one service. But more on that later.

WE ARE ALREADY MORE THAN 29,000 people.
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Divide into groups

In order for the product matrix to be optimal for all the needs of different target audiences, it must contain several product groups.

Their presence is mandatory; if something is missing, then consider yourself losing money.

Important. By default, I believe that you have a “Main” product group. These are your central products or services on which. Therefore, they are not on this list, but in your business they definitely are.

1. Goods locomotives

Your business must have driving products. Their goal is to attract buyers to your business, to show that your prices are really profitable, even lower than those of your competitor (allegedly).

And encourage people to make purchases. Literally one product category can solve all these issues.

We also call these goods “milk”, since everyone knows how much it costs. And if suddenly at the entrance to the store you see milk for 200 rubles, you will immediately turn around and leave.

Because decide that if milk is so expensive here, then everything else is expensive here too.

Another example, but from the other side. You see advertisements on billboards that the store is now selling a vacuum cleaner from a well-known brand at a very low price in the city.

You come to the store, and they tell you: before you buy this vacuum cleaner, please listen to another vacuum cleaner, it is a little more expensive, but much better.

In this case, due to the locomotive's product, you were attracted to the store, and earned money by selling a more expensive product. Naturally, some will only buy locomotive goods.

But there will also be those who will buy something in addition to it or take a more expensive offer.

Important. You can earn 0 rubles on a locomotive product, or perhaps even go into a small minus. But all this is provided that you upsell, transfer to another product or take into account.

2. Related

Selling an additional service or product is a nice thing for a seller. Everything is simple here. You must have related products to your main purchases.

As a rule, such up-sales have very high margins and some businesses rely solely on them.

Also a good example from catering, where we will definitely be asked to add syrup to coffee or cake to tea.

The sale of related products largely depends on the professionalism of the seller.

And to help them perform more successfully, add special phrases for upselling to this.

3. Status

The presence of a VIP product always excites the consciousness of the owners. Moreover, when I talk about VIP, this means a very, very expensive offer compared to the rest.

And even if you are a seller of premium goods or services, this also applies to you. There are obvious reasons for this:

There will always be someone who wants to buy the most expensive offer;
Compared to the expensive offers, everything else seems more affordable.

The first point is clear and obvious; there are always people who are accustomed to taking the best, considering cost an indicator of quality. Let's look at the second reason in more detail. And I’ll give you an example right away.

You scroll through the construction of houses and see three cost options: 800 rubles, 1, 2 million rubles. and 1.8 million rubles. Which one will you choose from this?

Most likely average, since most people think with the idea of a golden mean (price = quality). Plus, it's obvious that the third option includes premium extras if it's so expensive.

Now let’s imagine a situation where a house for 3.2 million rubles is added to these options. What do you say now? Right.

Now the house costs 1.8 million rubles. It doesn’t look so expensive, and the first option is completely free. The effect is achieved, the mind is deceived.

4. Substitutes

Or they are also called . The same human need can be satisfied in different ways.

The task of substitutes is to satisfy the need of a person who came for another product.

That is, this is an alternative to his choice. But this is too clever, I’d better give examples: orange-tangerine, shorts-breeches, margarine-butter, Turkey-Egypt, curtains-tulle.

Marketers even have a belief (based on numbers): an increase in the price of one substitute product entails an increase in demand for another.

In addition, the more substitute products in your assortment, the easier it will be to convince a potential buyer to buy from you.

Continuing the idea of the first paragraph, not all companies can find a substitute, and in some it is better not to do so.

In some cases, such products can reduce sales, since the client will begin to hesitate between choices and, as a result, will “spit” on the whole matter. The same story with the quantity of assortment (see video below).

5. Polar

I did not find a description of such a group of products in the stories of other specialists. More precisely, no one brought out these goods and services separately, but I think it was in vain. Therefore, I present to your attention the “Polar” products (the name was invented by us).

These are products that are either cheaper or more expensive than the main solution. They are necessary so that the client can choose something more profitable from our company or, on the contrary, something more worthy.

And our sellers could skillfully earn more (by switching to an expensive product) or not lose customers (by offering to purchase a more profitable product).

Moreover, do not confuse cheaper goods with locomotive goods. They have different tasks. The locomotive attracts the client and rarely makes a profit. And cheap polar, in addition to attracting, also brings profit to the company.

Also, do not confuse expensive polar with VIP. They also have different goals. With VIP, we make prices contrasting and radically different from the main offer.

And the expensive polar one differs from the main one by its low cost, so that the client has the opportunity (psychologically and financially) to switch to it.

6. Partner products

A very rare find in business is partner products. In Russia, it is customary to perceive all companies in the area as competitors. The perfect phrase is: “He who is not with us is against us.”

This position is firmly in the minds of all entrepreneurs, but we are quietly breaking it down with various materials. We have prepared a video for you, watch it below.

Now that you understand that partners are good and not evil, you can introduce your partners’ products.

The goal is to make a profit through the so-called affiliate program. Used in both offline and online points of sale.

For example, we made a mannequin at our client (a shoe store), which we dressed in our shoes and various products from partner companies.

Thus, we removed the headache of what to wear these shoes with, since the client immediately saw where to go to get things. The partners did the same.

7. Complementary

One way is to sell more units. We can immediately sell 2-3 items of one product.

But if this is not possible, then it is better to form a complex of several goods or services. Alternative words for this approach: packages, bundles, kits, selection.

To assemble a set of several products, you need to have complementary goods or services in your product matrix. These are those products that play an independent role, but become even more effective with another product.

In practice, we see this in cosmetic stores. Especially often during the holidays, where several care products are combined into one transparent film with a ribbon and bow.

Sometimes we can find products in such sets that are not sold separately (but this is quite rare).

You can put “Additional” into a separate product matrix. But, as a rule, they are already present in products and are “Main” or “Related”.

The services may not have them, so you will have to think carefully before implementing them.

Lifehack. You can create bundles of goods and services. This is not a traditional solution, but it looks very interesting.

Briefly about the main thing

Depending on a number of factors, the product matrix may vary. And an experienced owner should correct it in time.

But do not forget that the variety of product categories described above affects the company’s goal, as it gives freedom of choice to the potential buyer, which is also not always good.

Thus, building a product matrix must be a thoughtful and verified process.

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The point of sale can be positioned as a store with the widest possible range or the lowest prices, a boutique with premium branded goods, etc.

Conducting demand research and consumer segmentation

To identify exactly your buyer and understand his interests, fears and purchase motivations, segmentation is carried out. To do this, all consumers are divided into different groups, united by certain characteristics. The choice of parameters for classification is determined taking into account the features, advantages and cost of the product, geographic coverage, and format of the outlet.

Consumer segmentation can be carried out by gender, age, income level, type of occupation, social status, place of residence, interests, behavioral and other factors. Segmentation can be carried out for a store or chain of stores, as well as for different product groups.

For example, customer segmentation is carried out for a chain of construction stores. To promote this direction, we can distinguish a group of corporate clients (construction companies, construction teams providing repair and finishing services, etc.) and individual buyers (purchasing building materials for self-repair of their home).

Each of these groups can be divided into subgroups. Next, demand is studied by studying the number and volume of purchases made by different groups (such data can be obtained by studying competitors or analyzing your own sales for previous periods). If the study reveals a clear advantage for corporate clients in terms of volume and quantity of purchases, then when forming the assortment matrix, emphasis should be placed on professional goods and equipment.

Segmentation is carried out in several stages:

Definition of segmentation criteria. Selecting the most important parameters from the maximum list of possible characteristics, allowing you to divide all consumers into homogeneous groups.
Using the selected segmentation characteristics, you need to identify loyal and disloyal customers. This division will allow us to analyze the high and low loyalty of the target audience in the context of social, demographic, behavioral and other factors.
Drawing up a portrait of the target consumer of your competitors. You can analyze the target consumers of those competitors whose products are cheaper than those whose prices are at the same level as yours and those whose prices are much higher.
Analysis of differences and selection of important segmentation criteria. It is necessary to study all the resulting groups and identify the characteristics by which they differ. The most important of them are the reason for the purchase, switching to another brand, or abandonment of the product. These behavioral and psychographic characteristics tend to be the most significant, while demographics and geography are considered more descriptive characteristics that enable planning.
Dividing potential buyers into segments and providing a detailed description of each of them. Each segment must be described by social, demographic and geographic characteristics, behavioral (places and frequency of purchases, important properties of goods, number of brands purchased, etc.) and psychographic factors (life values, priorities, motivation for purchasing, etc.).
Assessment of the potential of each segment (approximate number and volume of purchases made by different consumer groups).
Selection of target market segments. One or two target groups with the greatest potential are selected, and it is taking into account their characteristics that a further promotion strategy is formed in a particular store.

Sample product matrix for competitive analysis

A comparison of your own assortment with the list of products from a competitor is carried out to identify the strengths and weaknesses of competitors and your company. This type of research begins with identifying the main competitors (3-4 large companies) offering similar products or substitute products. Next, an analysis of the product range of various competitive companies is carried out, their list of services, advantages.

To compare the product policies of the main competitors, a product matrix is compiled for each individual company, indicating product range groups, grouped by manufacturers, models, quality, prices and other characteristics.

The data obtained is used for optimization when creating your own assortment. For example, in the process of competitive analysis it was revealed that most of them offer a very wide selection of product groups, but at the same time they are all represented only by the most popular items. In this case, you can choose a tactic of maximum depth within a product group (increasing the choice of models, volume, color and other characteristics of a particular product).

Selection of the main product groups of the product network

An assortment or product matrix is a complete list of goods presented at the point of sale. Product content must be formed before the store opens, taking into account its format, location, features and preferences of the target audience. Spontaneous formation of an assortment, focused on current demand or copied from competitors, without analyzing costs and each product group, can lead to losses and ruin.

In addition to the preliminary compilation of a product matrix before opening a retail outlet, it is also necessary to update such a list at least once every six months. Ideally, this task should be performed by a group of specialists: a category manager or supplier who knows suppliers and has information about what is sold and in what volume, as well as a marketer and commercial director.

Features and stages of compiling an assortment matrix:

The product matrix is adjusted based on an analysis of sales for the previous period (the number of goods sold, total profit, and profitability by position are taken into account). A retail outlet's product database is formed indicating all key parameters - assigned internal code, name, brand, purchase and retail price, stock balance, etc.

The entire assortment can also be divided into price categories (usually, the division occurs into cheap, medium and expensive segments).

Deepening the product range

In order to satisfy the needs of the target audience to the maximum, a marketer (commercial director or other) of a retail chain or individual store must constantly work to optimize product content.

By choosing a strategy to increase the number of products within one product group, you can achieve a competitive advantage by offering those products that competitors cannot offer. This is called deepening the range (differentiation).

This policy allows us to offer target consumers product variations that best suit their needs. An in-depth assortment is relevant for the sale of adult and children's clothing and shoes (various colors and sizes are offered), furniture, mobile phones and other consumer goods.

All activities related to managing the assortment of a chain of stores or a specific point of sale are aimed at several goals - increasing retail brand awareness and loyalty of the target audience, increasing sales volumes and business profitability. Long-term goals also include increasing competitiveness and increasing market share. To achieve your goals, you need to choose the right store format, formulate a sales concept, and create a product matrix taking into account demand and the competitive environment.

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Maintaining an adequate and effective policy for the development of a retail outlet is impossible without drawing up an important document - the assortment matrix is an integral element of management.

You will learn:

What is an assortment matrix?
How to create an assortment matrix for a store in Excel.
How to manage a large assortment volume.
How to implement an assortment policy.
What are the 5 basic principles of assortment management?

An assortment (product) matrix is a document consisting of a complete list of goods sold in a store or other outlet. When compiling the list, the location of the store, the features of its format, and the general requirements of the assortment policy should be taken into account.

When developing a business development strategy, the management of a retail outlet does not set the goal of creating an assortment matrix. The formation of this document occurs as a result of the selection of a specific assortment for a specific store, taking into account all its consumer characteristics. That is why the flawless creation of an assortment matrix is available only after the trade policy has been fully formed and the general development strategy of the company has been determined. Responsibility for drawing up and implementing an assortment matrix most often rests with supply managers who know the suppliers of goods and have information about the state of the pricing policy of the sales market. This information helps to create the most effective product range.

It is believed that the range is effective when the following conditions are met:

the product is attractive to visitors to the outlet, which ensures optimal traffic;
the product is quite diverse, which allows the consumer to find everything they need in one place without visiting other stores;
The product is profitable, which means that the volume, price and net income from its sale provide a marginal profit sufficient to achieve the company's goal.

The most effective assortment of goods convinces the buyer to constantly visit this particular store, distracting him from competitors’ outlets, and completely buy up the goods within a certain period of time, leaving only minimal stocks of leftovers. At the same time, prices are set for goods that allow the company to receive optimal profit from sales.

Compliance with all these aspects in reality is a rather complex process, because many factors must be taken into account. But, understanding that a highly competitive battle cannot be won without an effective assortment, it is necessary to strive for it. It is to solve this problem that an assortment matrix is formed in the form of a table, with columns and graphs reflecting information about the necessary product groups, optimal prices for each product and the volume of inventory for each outlet. The Excel format is most convenient for creating an assortment matrix.

An example of an assortment matrix (product matrix) in an Excel table for a grocery store:

Sample product assortment matrix

The development of a competitive market is always accompanied by jumps in the marginal profit received from the sale of one service or unit of goods. Retail trade demonstrates this process perfectly. An increase in the number of stores certainly provokes price competition, which ultimately affects each of them by a decrease in income. Competition is a kind of struggle for survival. A short-sighted entrepreneur who has not restructured his business to suit the new reality will not be able to make it effective and will be forced to simply leave the market, giving his place to more acumen.

How to manage a large assortment: example price list

The correct price list allows the client to focus on the assortment he needs, and the seller to correctly set prices and calculate allowable discounts depending on the volume of purchase.

Find out how to compose it from the article in the electronic magazine “Commercial Director”.

How to implement an assortment policy

Assortment policy- This is a strategic element that greatly influences the success of the development of a retail outlet. Even the presence of a well-functioning personnel management system, experienced accountants and talented administrators will not save the store from collapse without thoughtful work with the assortment.

Many people still work, forming the assortment of a retail outlet only on the basis of their intuition. This is acceptable if the entrepreneur is not at all interested in the development of his store. To build a highly profitable business, you cannot do without developing an assortment matrix, market analysis, planning and assortment management.

Effective and correct compilation of the assortment and raw material matrix serves to:

increasing gross profit;
reduction of inventory;
increasing the average check amount;
stimulating the growth of customer loyalty and, as a rule, in the near future, a daily increase in the number of receipts;
efficient use of funds.

Modern market policy allows retail chains not to invest their money in goods, but to obtain interest-free trade credit provided by suppliers. Their income is used to open new stores, purchase modern equipment and innovative materials.

The assortment matrix will be close to ideal if it is compiled separately for each group of goods related to the store classification. This is very convenient and allows you to take into account all the consumer properties of any product item, features and delivery conditions. All these factors cannot be covered by a single model of the assortment matrix. In these cases, it is important to specify the different groups of goods.

The main parameters when forming the product assortment matrix

The first step in preparation for drawing up an assortment matrix is a clear identification of possible product groups. Each group is then detailed down to a specific product. Try to determine the assortment based on consumer demand and the needs of the outlet’s customers. When determining the price, start from its average value, taking into account the percentage of profit for each product item.

Having identified the most relevant product items, analyze the offers of suppliers on the market. When choosing a supplier, always collect information and reviews about the quality of the company’s work, its reliability, partnerships, and the rules it adheres to.

To compile an assortment matrix, the following information is required:

on the name of a group of goods (for example, haberdashery);
about the name of the product category (for example, belt, gloves, wallet);
about the price category of the product (premium class, middle class, economy class);
about the product code;
brand;
on the designation of packaging or packaging;
on the name of each product item;
supplier of goods;
about the employee responsible for the category;
on the inclusion of this product item in the minimum assortment.

Minimum assortment are the goods that have maximum consumer demand in a given store. It is important that the product items that make up the minimum assortment are constantly available on display.

The assortment matrix of a large shopping center will consist of a large number of product items. In medium and small stores it is much less. The head of a trading enterprise independently chooses how detailed the development of the assortment matrix should be. The main condition is that the document must be convenient for constant use.

When opening a brand representative office in a region, the specifics of the stores are always taken into account. Undoubtedly, it would be much more convenient to work with one type of product. This makes it easier to organize logistics, search for suppliers and new products. But in stores located in different places, consumer demand is not the same and the assortment matrix must be built in accordance with it.

Try to staff your staff with professionals whom you can completely trust. Only in this case, changes in the assortment matrix will be reasonable, appropriate, based on an analysis of customer interest, and in demand. The manager must review and approve all local inventory management activities before changes can be made. This centralizes the activities of all representative offices. The selection of assortment is significantly influenced not only by consumer demand, but also by the availability of suppliers, methods of delivery of goods, etc.

It is important that the assortment minimum is observed, there are no dramatic changes in the main percentage of the assortment matrix, and new products are included after an analysis of their profitability for a specific territory.

When drawing up the minimum assortment, try to determine the role of each product item. There is a certain classification that should be followed.

1. Locomotive goods.

This is a group of products that form the basis of the assortment matrix. It includes the most popular products for a given outlet, sometimes with a minimum markup, since their main task is to attract customers to the store, and not to provide high profits. The matrix allows for the presence of several locomotive groups of goods. It should be understood that these should not be essential goods, but products that have visual appeal.

2. Substitute goods.

Products in this group can be divided into two categories:

expensive and profitable;
cheap and highly profitable.

It is important to ensure that the buyer becomes interested in this group, and not in locomotive goods. Place them side by side on the display and give the buyer the opportunity to compare them and choose a product that is more profitable for you.

3. Related products.

This group includes products that complement the main purchase. These are various accessories, fittings, batteries, etc. This also includes services accompanying the purchase. For example, setting up equipment, etc. It is important that everything increases the value of the average bill.

4. Status goods.

Status products are more likely to create an image for a retail outlet than to bring noticeable profits or increase the number of sales. But it is these products that provide the buyer with the feeling of a large choice.

Buyers at any retail outlet are representatives of one of three categories:

people interested only in stores with low prices;
people for whom value for money is a priority;
people interested in purchasing a product that can satisfy their needs, regardless of its price. Status goods are purchased for this group.

A correctly compiled assortment matrix is an example of a significant simplification of the process of managing goods and services. You need to know all the nuances of its construction.

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3 important rules for forming an assortment matrix based on your goals

Assortment planning cannot be carried out without first determining priorities that influence the overall development strategy of the company. It is very difficult to build an assortment matrix so that all goods simultaneously bring maximum profit, have long-term trade credit and a minimum price. It is to select the most effective product for a specific outlet and improve the financial results of the company that assortment matrices are built. Try to adhere to the following directions:

Focus on maximum profit. This direction is characterized by the inclusion in the main assortment list of goods that have a maximum markup, consisting of the actual markup and retrobonuses, if any. It is necessary to analyze the retail price level of competing companies to determine the maximum possible markup.
Focus on maximum trade credit. In this case, it is implied that a product is included in the assortment matrix for which a long-term deferred payment is possible. It should be understood that an increase in deferment provokes an increase in the price of the product, which will lead to a decrease in the markup or an increase in the retail price.
Focus on the maximum level of service for customers. Working in this direction, build an assortment matrix, focusing on covering the desires and needs of the maximum number of customers. Buyer preference should be a priority, even if it conflicts with advantageous deferred payment offers or product profitability. According to experts, this is the optimal path, aimed at the long term and leading to maximum results.

Professionals in assortment management take into account in their work three basic rules:

1. Customer orientation.

The meaning of this rule is that, when developing the product range of a retail outlet, the company adheres to a general development strategy, but the main guideline is aimed at the needs of the target audience: regular or potential visitors to the store. In this case, we consider not just an abstract group of people, for example the middle class, but a specific group that has clear characteristics, in particular income level, marital status, average purchase bill, product preferences, area of residence, etc.

Retail and chain trade in Russia at the initial stages of its formation identified three levels of income of buyers - poor, middle and rich. The current level of competition has significantly expanded these segments, requiring a more loyal attitude towards customers, a clear focus on them assortment and prices.

It should be understood that a narrow focus on the buyer’s income level is advisable only in large cities with a large population and developed infrastructure. For owners of stores located in small towns, with two or three retail chains and various retail outlets, there is no point in focusing their work on a narrow group of people; it is more profitable to cover the needs of representatives of several segments. There is no doubt that expanding the assortment will smooth out the depth of the store’s focus, but it will significantly increase the number of its visitors.

2. Taking into account the specifics of store localization.

This rule emphasizes the importance of taking into account the location of the store when forming an assortment matrix. For its competent compilation, the specifics of the locality where the retail outlet is planned or located, its location, surroundings, the approximate contingent of regular visitors, etc. are important. In accordance with these criteria, the assortment of each specific outlet is finalized, depending on the specifics of the region or city.

Many retail chains, represented in various cities and regions of the country, strive to standardize the assortment list of their stores, which completely contradicts the identified need to adjust the assortment matrix to the needs of a particular region or city. In such cases, it is customary to use one of two approaches to interaction between the central office and regional offices.

The first approach assumes that regional offices are completely subordinate to the head office. They submit their proposals on the assortment matrix and analytical reports to the central office for consideration and decision-making. Any product item can be included in or removed from the matrix only with the permission of the head office. This approach helps to strictly control the activities of the sales office and eliminates the need to make biased decisions at the local level, for example, when working with suppliers.

In the second approach, regional representative offices are provided with a fully formed assortment matrix, including subgroups, but the specific names of goods sold by the outlet are determined directly by the managers of the sales office, taking into account the specifics of its location.

We should not forget that the assortment matrix must correspond to the retail space of the store and its format.

3. Optimization of the supply chain.

The need to optimize trade supplies is determined by the level of actual work of the head of the retail outlet with suppliers and manufacturers, as well as the attitude towards the introduction of exclusive new products to the market. All these issues are inextricably linked with assortment management, focused on the regional characteristics of a particular market. For example, for retail outlets in large cities that have a high level of migration between settlements (Moscow, St. Petersburg, etc.), it is important to orient the assortment matrix towards well-known and widespread brands and brands. Trusting one brand, which is found quite often and in any city, a person purchases its products more often than unknown local brands.

On the other hand, in regions with low daily migration, local manufacturers are often more popular than name brands. Statistics show that products made in their own city are more trustworthy compared to well-known brands, and have a lower chance of being counterfeit or stale, since they are produced nearby. Patriotism and pride in one’s small homeland also play an important role in choosing local products, especially if the quality characteristics of the product are not inferior to well-known companies. You can leverage these benefits by focusing your inventory on local brands. In this case, not a single representative of a retail chain with a head distribution center will be able to compete in providing the store with a wide range of products from your local manufacturer.

A store seeking to create a competitive advantage with an exclusive assortment is recommended to fill the assortment matrix with products that are not represented on the local market. Capital boutiques are becoming the standard for regional stores, which, in turn, follow the example of European or Western stores. You should be aware that additional financing will be required to purchase exclusive products. Try to introduce only those new products that correspond to the format of your store and can attract customers because they are presented only in your store.

Stages of assortment matrix formation

Understanding the goal and knowing all the rules, feel free to begin forming an assortment matrix. Conventionally, the whole process can be divided into three stages:

Stage No. 1. We analyze the source data.

You should not start compiling a product range before considering all the characteristics of the outlet: what format, size, and whether it has any special features. Try not to miss anything and take into account all parameters, including:

shape and area of the store, number of floors of the building;
location of the outlet, including area, degree of accessibility for customers, level of competition, etc.;
socio-economic features of the microdistrict;
estimated assortment and necessary equipment.

After analyzing all the data received, decide on the retail format, giving preference to a self-service store, a discounter or trade from a counter. Then formulate inferred visitor preferences. Work out your positioning.

The correct formation of the assortment matrix and the purchase of relevant goods is carried out with the obligatory presence of a general strategy for development and positioning in the eyes of visitors. But this is the ideal option. In reality everything is different. First, goods are purchased, completely randomly, only to fill display cases and shelves, and then the sales methodology is determined. The current level of high competition makes this path completely ineffective.

Stage No. 2. We segment customers based on research of current demand.

The second stage is devoted to understanding potential customers, their habits, requests and needs. Based on this, they determine the best way to influence the target group and choose marketing and advertising concepts. The characteristic by which the segments are divided does not play any role. It is important to identify your potential client audience and understand their expectations. The result will be a key segment of visitors to which all efforts must be directed.

Obtaining this information is quite simple, for example, by conducting a survey of potential clients.

Stage No. 3. We compare our own assortment with that of competitors.

An important point in drawing up an assortment matrix is to analyze the level of competition and positioning your outlet relative to others.

It is not necessary to analyze the activities of all stores in the area. Two or three main competitors are enough. Identify their strengths and weaknesses, what makes them different from each other. Conduct an analysis of pricing policies by comparing the cost of goods from key groups. This provides an excellent opportunity to identify your competitive advantages and add if they do not exist.

However, this step is not always necessary. There are store formats where competitor analysis is not expected.

Expert opinion

The main thing for me is consumer demand

Anastasia Kondratenko,

owner of the store “Our Housekeeper”, Tyumen

You should not focus on competitors when forming the assortment of your outlet. The only thing that matters is customer demand. My store is located in the courtyard of residential buildings, I often have to work behind the counter myself, and this helps to make timely adjustments to the assortment list of goods, knowing how much of which product is sold over a certain period of time.

I try to form an order so that by the time the new product arrives, the entire existing batch has already been sold. This is very popular with customers who understand that the store always has fresh goods. Of course, you need some experience to learn how to correctly and competently form a store’s assortment; it took me a year and a half to avoid mistakes and clearly draw up a matrix, confidently knowing what and in what quantity of goods to order. For example, elderly people living in the neighborhood of our store have a pension on the 12th of every month, and the majority receive their salary on the 18th. I always try to strengthen the product range by this time, but at the beginning and end of the month I order the minimum amount of goods.

I always create an assortment matrix for the grocery store, which makes my work easier and faster. This quickly and reliably shows the most profitable price segment and product positions. I make notes right in the table to make it easier to understand the real situation.

How to divide products into categories and bring order to your assortment

Stage No. 4. We determine the main groups of goods presented in the store.

Having chosen the location of the store, having analyzed the possible category of customers, their preferences and the offers of closest competitors, proceed to forming an assortment matrix for your own outlet.

Based on the general concept of the store, fix prices for the main product groups. Determine for yourself what price level your store will occupy - above the market, below or average. The next step is to select the most convenient suppliers of the necessary goods.

Stage No. 5. We divide the assortment into categories.

For marketers, this part of preparing the assortment matrix is the most interesting. Taking as a basis the analysis of consumer demand, adding to it your own experience and knowledge of psychology, divide the main groups of goods first into subgroups, and then into individual positions.

This is a rather interesting process, as it allows you to imagine yourself as a buyer in your own store, think like him, and proceed from his considerations. Only this approach will allow you to fill your store shelves with in-demand goods, increase the turnover and profit of your outlet.

Stage No. 6. Understanding the balance of the company's product range.

This stage of compiling an assortment matrix allows you to analyze how balanced product items and categories are. The assortment must be balanced in both depth and width, taking into account the key role assigned to the product group. There are few such roles:

unique products, supporting the store’s image and related to impulse demand. Such goods are taken thoughtlessly on the way to the checkout;
priority goods, attracting buyers and bringing maximum profit. Customers intentionally come to the store for this group of goods. If the desired item is not available, customers leave without purchasing anything;
basic goods that have a high turnover and can attract a flow of buyers. The buyer also comes to the store intentionally for goods of this group, being confident that he will find what he needs;
convenient product categories, forming customer loyalty and attracting customers to this particular store;
seasonal goods aimed at changing the assortment and attracting new customers.

Expert opinion

We have many items that we introduce or reduce depending on the season

Irina Krechkevich,

grocery store owner, Guryevsk (Kaliningrad region)

I analyze the compiled assortment matrix every six months, removing products that have become irrelevant. I consider it inappropriate to do it more often, since demand always varies depending on various factors, in particular the season. An adequate assessment can only be given for at least six months.

I always try to get ahead of demand a little and introduce new season items into the assortment a month before it starts. For example, I start forming a beer base for the upcoming summer season at the end of March. This makes it possible to calmly decide for the season on the purchase volume, display, advantageous positions, etc. I do not accept subsequent offers from suppliers of new brands of beer, believing that if the buyer did not see this product at the beginning of the season, then he will not be interested in it in the middle . Most often, customers decide on the choice of brand back in May.

Any grocery store has many seasonal items that are periodically introduced and then reduced. This does not raise questions for suppliers. They know that they are of interest to us only at certain times of the year. Our cooperation begins a month before the start of the season and lasts on average three months. After this, this product item is excluded from the assortment matrix.

Stage No. 7. Final compilation of the assortment matrix, formation of the final document.

The final stage of forming an assortment base, when all that remains is to enter everything into a single database. At this stage, additional preferred characteristics of the product are also taken into account: its color, size, packaging, etc. All the nuances that help the buyer make his choice in favor of your store are entered into a single array, and then the minimum assortment is determined.

The formation, processing and analysis of assortment matrix data is most often carried out by a highly professional manager. It is in this case that the desired result is achieved, guaranteeing the stable development of the company.

The most commonly used method is ABC/XYZ analysis.

Formation of the store’s product range from A to Z

Formation of product assortment matrices using the ABC/XYZ analysis method

When distributing work among managers, remember that warehouses should not be overfilled with goods of one type; the application should not be formed on general sales reports by suppliers, but strictly in a specific product subgroup.

It is much more convenient for a professional working with several product subgroups to control the availability of a particular product, to avoid excess stock, as well as a complete absence of goods on display shelves. To optimize the work of the purchasing department, it is necessary to clearly divide product groups between managers, covering the entire assortment. This will allow you to control and analyze the assortment matrix of the outlet as accurately as possible.

The job responsibilities of a manager with a high professional category should include responsibility for identifying and forming a minimum assortment and a general list of goods, as well as for conducting purchases within the assigned product group, taking into account seasonality and market fluctuations in consumer demand.

A professional manager does not just generate requests and transfer them to the supplier, he manages the range of goods included in the subgroup assigned to him, knowing which and in what quantity is available, and which needs to be ordered or added. An experienced manager always knows the tools with which these requirements are met.

When forming an assortment matrix, they most often use ABC analysis. But for thorough work with a product subgroup, analysis alone is not enough.

The point of this analysis is to show quantitative sales product items, but no information on profitability of a particular position there is no. There is no point in using this method to analyze anything other than the number of sales, or to draw conclusions about the profitability of products based only on this method, because the sale of one product from group C in terms of profitability can close the sale of 25 items from group A.

Forming an assortment matrix without taking into account the profitability of product items is considered incorrect. The professional approach to the formation of the assortment matrix corresponds to ABC/XYZ analysis, where the number of sales is ABC, and profit is XYZ.

The specified selection criteria provide a set of similar product subgroups with parameters AX, BX, CX, AY, AZ, BY, BZ, CY, CZ.

This implies:

AX represents the product subgroup of the assortment matrix with maximum sales and maximum profit.
BX represents the trading subgroup of the assortment matrix with the average number of sales and maximum profit.
CX represents the trading subgroup of the assortment matrix with minimum sales and maximum profit.
AY represents the product subgroup of the assortment matrix with maximum sales and average profit.
AZ represents the trading subgroup of the assortment matrix with the maximum number of sales and minimum profit.
BY represents a product subgroup of the assortment matrix with average indicators in terms of sales and profitability.
CY is a trading subgroup of the assortment matrix with a minimum number of sales and average profit.
BZ is a subgroup of goods in the assortment matrix with minimal profit and average sales.
CZ is a subgroup of goods in the assortment matrix with minimal profit and minimal sales.

Such an analysis makes it possible to form an assortment matrix, observing the following principles.

The basis of the assortment matrix, let's call it a group A, constitute subgroups of goods that have characteristics AX, BX, CX, AY, AZ. Subgroup products should not be neglected either AZ, whose representatives are characterized by the maximum number of sales and minimum profits. These are goods of absolute demand that attract store visitors with their minimal markup.

To product subgroups BY, CY, BZ refers to auxiliary assortment IN-row.

Subgroup CZ comprise illiquid positions, as well as new items WITH.

An assortment matrix built in a similar way, which has subgroups A, B And WITH, fully visualizes the required purchase items.

Significant interruptions in the supply of goods make this matrix incorrect and not always relevant. In this case, you should increase the period of the analyzed interval, saving the sales history. This step will help to obtain reliable data necessary for further work.

If necessary, not wanting to miss anything, you can record the items selected for ordering in a matrix.

This method of analysis using an assortment matrix demonstrates the real state of product subgroups by position and supplier. This helps identify a priority supplier to route the order to.

For product items within the context of one supplier, selection is also done using analysis ABC/XYZ.

What to do if customers want products that are not in stock

5 basic principles of assortment matrix management

The development of an assortment matrix as an element of a strategy for the successful development of a retail outlet should be based on modern principles of assortment management, combined with the general marketing direction of the company.

1. Compatibility.

All company strategies, including assortment, sales, pricing, communication, etc., must be combined and effectively complement each other.

2. Focus on customers-clients.

The entire assortment of goods presented at a retail outlet must have a high level of consumer demand and meet the wishes of customers, otherwise it will not be sold and will not generate any income.

3. Development.

Managers responsible for drawing up the assortment matrix are required to keep one step ahead of customer needs, which are constantly changing and growing. Adding to the assortment or removing certain items from it should not only correspond to new wishes, but also be ahead of them.

4. Professionalism.

As you know, personnel decides everything. Only a competent professional who knows the theory of assortment management, knows how to correctly apply it in practice, taking into account all the nuances of a particular case, and has analytical thinking, is able to analyze all the facts and make an informed decision that guarantees the company's effective development.

5. Efficiency.

All aspects of assortment management have the goal of increasing company profits. With the right approach to this issue, each product item makes an optimal contribution to increasing the profitability of the company, contributing to an increase in marginal profit.

Definition and types

An assortment matrix is a list of goods (product items) to be sold in a retail company, compared according to one indicator important for the store - for example, depending on the supplier or price.

The most common types of assortment matrices are found.

List of goods

The key factor is the list of goods to be sold by the retail company. That's where we need to start. How to define it? We need to go from the general to the details.

First we answer the question: Who are the customers who are guaranteed to come to our store? Who are they, where do they live, how much do they earn, where do they prefer to buy jewelry, where else do they go to buy it, how much do they spend on jewelry and how often do they buy it, what styles and types of products do they prefer, etc. It is important to understand exactly the image of a typical (target) buyer and present it in as much detail as possible. There may be not just one type of such typical buyer, but two or three (but not five or ten). It is important that you are sure that they are guaranteed to come to your store because:

They already go to it;
. live or work nearby;
. there are no other shops nearby;
. we have something that others don’t have and that our target customers need;
. Everyone already knows us (a well-known store or a well-known chain).

Then we select (specify) the store format: in what area, in what location do we work for our target customers?

The format is a specification of the company's strategy. Their number is limited; for jewelry retail it is usually:

Jewelry shop,
. jewelry salon,
. jewelry boutique,
. jewelry section.

Next, based on the target groups of buyers and the selected (suitable for target buyers) format, we determine the product groups that, in our opinion, must be in the store, because these are the types of goods that our target buyer wants to buy. For example, our buyers are low-income residents of residential areas, and to a lesser extent – buyers with an average level of income, mainly housewives with children; format - a small jewelry store (20-30 sq. m) in a class “C” shopping center. Therefore, we determine that our store should present silver products and gold products. In this case, gold products should be represented by the following groups:

Products made of red, yellow and mixed gold 585;
. rings, earrings, pendants, chains, bracelets, watches, necklaces;
. each type of product (except chains): without inserts, with zircons, with semi-precious stones, with pearls, with precious stones (including diamonds).

Thus, the first step is to determine which product groups we will trade.

Assortment tree

The next step is to compile a multi-level product classifier, the so-called assortment tree, from the generated list. As a rule, the classifier contains five levels, although three to five are acceptable. Using less than three levels does not allow the assortment structure to be fully reflected and, accordingly, makes management more difficult.

The product classifier must also have lists of product characteristics - those that are not reflected in the classifier itself, but are important and necessary for analyzing sales, income, turnover and for purchasing planning. For example, the characteristics of gold products are: gold purity and color; any ring - size; diamonds - stone size, number of stones (one or scattered), type of setting, type of cut, characteristics of the diamond; jewelry in general - design (type of style - classic, geometric, floral, fantasy, etc.), etc. You need to compile, firstly, a list of characteristics for your assortment, and secondly, all the options within each characteristic (library of characteristics).

Construction of the matrix

Then it is necessary to determine how many of which types of products there should be, that is, to indicate the capacity of product categories and product groups. If you already have a store, you need to use the updated list of product groups/product categories to analyze the shares in income, turnover and occupied retail space (area of counters and display cases). And bring the retail space of product categories into line with the categories’ shares in income based on the principle “the amount of space for a product should correspond to the amount of profit generated; The more revenue a product brings in, the more space it should take up.”

After this, knowing how much space is allocated for each product category, determine the number of products that can be placed there, taking into account the specifics of the format - the boutique displays fewer products on the counter, more decor and free space; in a store - the goods are placed tightly together, usually on palettes, with little free space. The result of this stage is exact knowledge of how many products of each type should be in the store.

It remains to determine the proportions of price segments (high, medium, low) for the entire assortment (this is partly duplicated with the assortment-price matrix). As a result, we must know, for example, that there should be 60 chains in the store, five types of length, 15 types of weaving. We list the quantity for each combination of length and type of weaving. For example, the Belzer weaving chain is available in sizes: 45, 40 and 35 cm. And so on for all product categories.

All. The matrix has been built.

Product views

But that is not all. Any matrix requires management - adjustments, changes, input-output of goods, their rotation depending on changes in the composition of buyers, the amount of money they have, their tastes, fashion, demand in general, depending on the number of competitors and their actions, on the general economic situation in country. The stable components in this process are the store format (it is not recommended to change), the store capacity (if the area and number of counters have not changed), the list and ratio of the main product groups.

Note: It will not be possible to change (optimize) the assortment to achieve higher results (turnover, income) without organizational changes. The assortment is created by specific people in the company, and for them to create a different assortment, they must work differently, or it must be different people. In order for them to work differently, they need different knowledge, conditions and resources: differently set tasks, a different information system, differently established business processes, a different organizational structure, finally. Therefore, it is important to be prepared for the fact that a change in the assortment entails the need for other changes in the company.

In practice, so-called product views are often used in order to carry out analysis and draw up plans not on the basis of a sufficiently large number of product categories, but on the basis of aggregated (combined by a certain characteristic) data (views). Below this will be shown with an example - see the figure.

A company can have several product angles:

Catalog (product classifier, which is usually an assortment matrix);
. customization for category management;
. customization by manufacturers (suppliers);
. other settings.

As can be seen from the diagram, settings can be made not only at the level of categories and subcategories, but also at lower levels - subgroups and even products.

views

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