Assortment layout functions to consumers
- Facilitate easy processing
- Help them appreciate the available variety
- Help them learn about the category and construct their preferences
Facings
the number of identical products (same SKU) on a shelf turned out toward the customer
Benefits assigning more space to well-selling SKUs
- Draws more attention -> popular SKUs are found faster
- More on shelf inventory for popular SKUs -> reduces restocking costs and stockouts
Potential disadvantages assigning more space to well-selling SKUs
- Winner takes it all -> too little attention for niche products that build loyalty
- Tends to ignore decreasing returns to space
horizontal orientation
Categorization by brand
vertical orientation
Categorization by flavor
External categorization
grouping of items implied (revealed) by the assortment layout
Internal categorization
the way in which the consumer organizes the items in her mind
Category congruency
degree of fit between the external categorization (implied by shelf layout) and the internal categorization of the consumer
Increasing categorization congruency has several positive effects
- Consumers perceive more variety
- Consumers feel the organization is less complex
- Results in higher conversion and satisfaction with chosen item
Product information
information about the features and benefits of a product (incl. consumer reviews)
Assortment information
information about what products are carried in the assortment of a specific channel (incl. other than the consumer is currently partaking in)
Inventory information
information about the availability of inventory at the SKU level per channel (yes/no, how much)
The decisions of customers are susceptible to the influence mix:
- Prior preferences + Information from marketers + Input from other people and information services = P + M + O
- Increasing weight on O
Personalization
customizing assortment dimensions to the individual consumer
Contextualization
adjusting assortment based on contextual factors such as time, location and weather
