The Right Balance Between Core Products, Basics, & Essentials: Understanding Merchandise Mix Strategy
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by Fiza Khan
In retail, understanding the best way to merchandise your store is key. After all, you want to sell as many items as possible, and the product mix is the strategy for doing that. Your product mix will determine which products you stock, how much of each you have on hand, and which ones are prominent in your store. Keep reading to learn more about what a product mix means in retail and how it can help drive sales at your business. If you’re not familiar with this term yet, don’t worry! It’s common for people working in retail or any industry related to it to hear new words every day. However, if you feel like something isn’t clicking here—we’ve got you covered! The following article contains everything you need to know about product mix as a merchandising strategy.
What is a Merchandise Mix?
Merchandise mix is the number and type of products that are featured in your store. For example, if you sell clothes, food, and electronics, the merchandise mix in your store will be the number and specific items within those three categories. Merchandise mix is closely related to the concept of inventory mix, in that both refer to the items being stocked. The main difference is that inventory mix refers to the quantity of each item, whereas merchandise mix refers to the type of items.
The merchandise mix of a retail store is closely related to the product mix of a manufacturer. But while the product mix is the range of goods a manufacturer produces, the merchandise mix is the range of goods a retailer stocks from the manufacturer.
The Importance of Product Mix in Retail
Product mix is a crucial part of any business, but it’s especially important for retailers. This is because the product mix determines the profit that can be made from each sale. The product mix may also determine the number of sales that can be made. In other words, the more products you can sell in your store, the more money you’ll make. The product mix can also impact the amount of foot traffic in your store, as well as the average order value. If you want a higher average order value, you could try to push luxury items. If you’re looking to increase foot traffic, you could try to stock more items that are impulse buys. What’s important to note is that every product you include in your product mix has the potential to boost these factors for your business.
Core, Basics, & Essentials: What’s the Difference?
The merchandise mix has three different categories that are placed into different areas of the store. Merchandise categories like the following are typically found in the apparel, grocery, and home improvement industries.
Core Products: These are the products that drive sales that you want to sell more of. They are typically higher-priced, and they are usually the main products that are advertised in your store.
Basics: These are typically low-priced products that you want to be sure to have available in your store. These are usually consumable items, like groceries, health and beauty products, and cleaning supplies.
Essentials: These are the products that are necessary to run your business. Items like furniture, computers, and items in the plumbing section of your store are examples of essentials.
Why Is a Strong Product Mix Important?
As mentioned previously, a strong product mix has the potential to impact a variety of factors for your business. It can impact customer buying habits, customer satisfaction, and customer retention. It can also impact your customer’s ability to pay for items, as well as their willingness to travel to your store.
Customer Buying Habits: If you have a strong product mix, you’re more likely to have products that appeal to your customer’s specific needs. This means that you’ll have a higher chance of selling the products that customers have come to your store to buy.
Customer Satisfaction: If you have a wide selection of products, you’ll likely have products that appeal to every customer. This can increase your customer satisfaction, as they’ll be able to find exactly what they want in your store.
Customer Retention: Having a wide selection of products can help you retain customers. This is because they’ll be more likely to find what they need in your store when they come back.
How to Develop a Strong Product Mix Strategy?
First, you’ll want to figure out what your core products are. This is usually a product that makes up 50% of your sales or more. You can do this by looking at your sales reports from the last few months. You’ll also want to take a look at your competitors and see what products are selling the most in their stores. Once you know what products you want to stock, you can look at the demand for various products. This can help you decide which products to stock more of, and which products to stock less of, if you need to. Now that you’ve got an idea of what you want in your store, it’s time to think about how they’re displayed. You want to make sure your products are merchandised in a way that is appealing to customers.
Invest More in Your Core Product
If you want to increase sales in a specific category, you could try investing more in that category. For example, if you sell a lot of shirts, but not enough shorts or accessories, you could try increasing your shirt supply. This can help drive sales in an area that needs it, while helping to keep the other categories stocked. It can also help you to balance out your inventory when some items are selling better than others. If you want to invest more in a product, you can try putting more of it on the shelves. You can also try marking down less popular items, to boost sales for those items that need it. Finally, you can try advertising the products that you want to see more sales from.
Look for Lower-Opportunities in Other Categories
If certain areas need a boost, it can help to look for higher-opportunities in other areas. For example, if there are a lot of people buying shorts, but not many people buying accessories, you could try to stock more accessories. This can help to balance out your inventory, while also boosting sales in an area that could use a boost. If you’re finding lower-opportunities in certain categories, you can try to boost sales by putting more popular products on the shelves. You can also try marking down items that aren’t selling very well to drive sales in those categories that could use a boost.
Have Planned Open-to-Buy Dollars
Retailers that sell a wide range of products with a large selection of good quality merchandise at competitive prices should keep open to buy dollars. The reason is that they need to have a good merchandise mix so customers can find the perfect items for their needs. This is especially important in a rapidly growing market like fashion and apparels where consumers are constantly on the lookout for new and exciting products.
It’s also essential for retailers to remain flexible and up-to-date in order to stay ahead of the competition and provide value for customers. By doing these things, retailers can ensure that they’re offering something different from competitors and are generating more sales. Finally, keep in mind that it’s never too late to add to your inventory if you see an opportunity in the market. At OFFPRICE, there is excess of inventory fillers, ready to be shipped immediately. You can use your open to buy dollars to purchase in season trendy goods.
Merchandise mix is a crucial part of any business, but it’s especially important for retailers. The product mix determines the profit that can be made from each sale, as well as the number of sales that can be made. The product mix can also impact the amount of foot traffic in your store, as well as the average order value. The merchandise mix has three categories that are placed into different areas of the store. The merchandise mix of a retail store is closely related to the product mix of a manufacturer. The merchandise mix is the range of goods a retailer stocks from the manufacturer. The product mix can be used to boost sales in specific categories, as well as in different areas of your store. It can also help you to balance out your inventory, while driving foot traffic to your store. To develop a strong product mix strategy, you’ll want to take a look at your competitors, as well as your sales reports. From there, you can decide which products you want to stock, and how you want to display them.