Why a Product Assortment Strategy is Essential for CPG Brands
Product assortment is a crucial aspect of the consumer packaged goods (CPG) industry that can greatly impact a company’s success. A brand’s product assortment refers to the selection of products that the company offers to consumers. Even if a brand has a large product assortment, that doesn’t mean that retailers will carry each item, nor does it guarantee that each offering is performing well. That’s why it’s important to analyze the data to find the competitive advantages your products have over competitors and develop a product assortment strategy that will win over retail buyers.
The importance of a product assortment strategy for CPG brands
For CPGs, a product assortment strategy is essential to secure and maintain shelf space and gain the upperhand against competitors.
A product assortment strategy helps to ensure that companies are offering products that are in demand by consumers. This is especially important in today’s market, where consumers have more options than ever before. If a company doesn’t have a product assortment that appeals to consumers, they may find it difficult to compete.
Product assortments can help to increase sales and revenue. When companies offer a wide range of products, they can appeal to a broader customer base, which can lead to increased sales. Additionally, by offering different products at different price points, companies can appeal to customers at different income levels, which can also increase sales. This data can also be used to show which products are underperforming or may be candidates for discontinuation.
Product assortment can also help to differentiate a company from its competitors. By offering unique or exclusive products, companies can stand out from the competition and create a competitive advantage.
There are various product assortment strategies that may be deployed by CPG brands, but the three most common are a full assortment, a limited assortment, or an exclusive assortment.
- A full assortment refers to offering a wide range of products to appeal to a broad customer base. This strategy is often used by companies that want to appeal to a wide range of consumers and increase sales.
- A limited assortment focuses on a select number of high-performing products. This strategy is often used by companies that want to focus on a specific niche or target market.
- An exclusive assortment refers to offering unique or exclusive products to differentiate from competitors. This strategy is often used by companies that want to create a competitive advantage and stand out from the competition.
Factors that can influence a product assortment strategy
There are several factors outside of a brand’s control that can influence product assortment in the CPG industry, such as market trends and consumer preferences, competition, and distribution channels.
Market trends and consumer preferences are perhaps the most important factors to consider when developing a product assortment strategy. Companies need to stay up-to-date with the latest trends and consumer preferences, as these can change rapidly. For example, there has been a growing trend towards health and wellness products in recent years, and companies that offer these products are likely to be more successful than those that don’t.
Consumer preferences can also influence regionality in product assortment. Some CPGs may choose to release or create a product, such as a special flavor, for a particular region, that is released and available only within that region. CPGs deploy this tactic to ensure that their product offerings are better suited to the preferences of local consumers.
Competition in the industry is also an important factor to consider. Companies need to be aware of what their competitors are offering and how they are positioning themselves in the market. By understanding the competition, companies can identify opportunity gaps and make strategic decisions about their product assortment.
Distribution channels and retail partnerships are also important factors to consider. Companies need to build relationships with key retail partners and understand their needs and preferences. This can help companies to ensure that their products are being placed in the right stores and that they are being marketed effectively.
The Bedrock Solution
At Bedrock, we know data and a compelling sales story is the key to winning over retailers and gaining the competitive advantage over the competition. We start by harmonizing all CPG data from syndicated providers and retailer portals to give brands a better look into the true market landscape and product performance.
Through Bedrock’s Sales Decomposition feature, CPG brands can see how their product is performing relative to the competition. With this view, users can look at a market or product individually, allowing CPGs to see if a retailer or product is outperforming the rest of the market across various key measures.
Book a demo today to see how Bedrock can help refine your product assortment.