Updated: Nov 8, 2022
One of the top decisions a Buyer has to make when assortment planning is figuring out the breadth and depth of the assortment. These decisions will directly impact your OTB and may determine other retail metrics such as turn and weeks of inventory. First, let's discuss what breadth and depth mean and review some real-life examples.
Product breadth is how many different products a store carries. The more products are offered, the broader the product assortment of this business. Companies like Target or Off-Price retailers provide quite a bit of product breadth. As a customer, if you want options, this is the place to go.
Product depth is how many of each product the store is carrying. You can have depth on how many of each item you put on a rack, the color variation, or depth in size or print. Specialty retailers such as The Container Store or The Shade Store offer little product breadth (you know exactly what will be inside when you walk in the door) but offer quite a bit of depth in each product.
Product Breadth Examples:
You can have product breadth at the store level and the product category level. As mentioned before- Target has a range of assortment at the store level, meaning they have a lot of categories to shop from- this store has over 35 different categories! Other examples of companies with a wide breadth of assortment at the store level would be: Department stores, Mass stores, Convenient stores, and Off-Price Stores.
There are a lot of pros to having a wide range of breadth at the stores: customers may visit more frequently, they could purchase more items per visit, and you can bring in a fashion assortment more frequently. Cons to having a large breadth of assortment are that you may not be top-of-mind to a customer for a particular group, conversion may be lower, and as a Buyer, you may have less negotiation power because you are buying fewer units.
Stores like the Target above offer a large breadth of assortment at a store level, but depth of assortment at an item level. They may offer a few different options for a product and buy deep into each product. While an off-price retailer like TJ Maxx or Ross will have only 1-2 of each item in store, making it have a wide range of breath at the store, product, and item level. Retailers that do not often buy heavy in depth at an item level might do so for endcaps, seasonal promotions, or big sale buys.
Product Depth Examples:
Typically, specialty stores and club stores offer the largest product depth. There are usually two reasons to order very heavily into one product category: you are a specialty retailer or you offer a large discount. For specialty retailers- you want to become the authority in that product category. When a customer has a need for a product you want to be the store that first comes to mind. You are an expert on the products in your store and can offer great customer service. On the discount side, club retailers like Costco are a great example of product depth. They use volume buys to get great discounts that they then pass on to the customer. You won't find 32 different lightbulbs at a Costco, you will find 1-2 styles and about 50 of each on their shelves. The benefits of having product depth are: you can receive good costing, you may experience a higher conversion rate, and you can tell a better merchandising story. The cons of having product depth are having a smaller target market, the potential for high return rates if a product does not perform, and potentially relying too heavily on one brand in the space.
By first understanding what product groups you would like to carry and how deep of an assortment you would like to offer your customers, you are taking the first step in what is retail's toughest role: Open-to-Buy planning. I hope this helps give you more clarity on offering breadth vs. depth to your customer. If you have any merchandising questions please reach out at www.posstrategies.com
Published by Point-of-Sale Strategies, a retail consulting and website optimization company based in Asheville, NC.