Companies such as Target, Gap and Macy's have all talked about the strategy behind their assortment management and how they are navigating everything from inventory levels to port delays to forecasting sell-through and out-of-stock. The trick is to offer an assortment of goods that can maximize customer value as well as profits.
When it comes to assortment, retailers can go deep with a vast array of goods, wide by covering every category, localized or mass market. Assortment optimization refers to trading off breadth and depth to optimize value. Toss in private label goods and the assortment game gets complicated. One thing is clear, retailers will need process transformation to remove inefficiencies needed to balance assortment and prices in an inflationary shopping environment.
