Product Mix and Merchandising

Optimizing basics while integrating new levers

Context

Store mix and merchandising are basic sales components that require continuous improvement to increase their appeal and profitability.

Traditionally, category-specific approaches help to structure the development of mixes and merchandising by integrating performance analyses, national trademarks and own-brand product innovations, customer knowledge, and feedback from operating lines. However, they must now factor in the greatest needs, in terms of offer location, and develop strong e-commerce synergies.

For example, the mixes currently offered by most traditional distributors are still very limited compared to those offered by pure players. In fact, they are primarily shaped by the in-store offer, plus 5-15% of online-only exclusives. Traditional distributors therefore have a major hurdle to overcome to win the supply battle with pure players.  

Challenges

The main challenges facing distributors are:

  • Elaborating category strategies by factoring in more customer knowledge and store business lines, and developing e-commerce, in line with the pricing strategy
  • Adjusting mixes to better suit market area profiles (adjusted central offer and non-inclusive add-ons), in connection with store business lines
  • Developing e-commerce long tail for key product categories, to improve general appeal and brand image
  • Reviewing the linear space attributed to each sector/department/category more frequently (optimizing space management once a year)
  • Eliminating duplicates more frequently and improving the management of product arrivals and departures
  • Improving collaboration with suppliers on promotions
  • Simplifying administrative operations, ensuring consistency of benchmarks 

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How can Argon Consulting help you?

Argon Consulting assists distributors in improving their mixes and merchandising, as part of optimization, revision or creation initiatives.

We provide proven methodologies for developing mixes by combining a sales approach with economic rationale, standard performance analyses (Pareto, margin/growth matrix, coverage of units required, level of best customer penetration, space management, etc.) and a command of good practices relating to organizational frameworks (organization of central functions in the management category, development of business lines, etc.).

We have developed specific expertise in defining and implementing consumption/competition clusters for stores (and applying mixes according to the cluster and size of store), as well as in developing successful mix long tails (in particular on behalf of leading pure players).