The retail environment has changed significantly over the past decade due, in part, to the dominance of Amazon and the growth of social media. As a result, shoppers expect the ability to search through a wide selection of products at their favorite retailers quickly and easily.
So if you’re a retailer that has decided to expand your ecommerce product assortment, you’ve made a smart move. Retailers with wider product selections enjoy more sales and greater customer loyalty.
Many retailers are expanding product assortment using a technique called drop shipping, where brands ship products directly to customers and bypass the upfront investment on behalf of the retailer. Drop shipping benefits everyone involved: retailers can expand assortment without investing millions in inventory and warehouse space, and brands get their products in front of more customers.
However, the challenge for retailers lies in determining which products to add to their ecommerce assortments. With virtually endless options, how can a retailer decide which additional products will maximize sales?
Be strategic about product assortment expansion
Product assortment expansion is proven to help retailers grow and compete in the age of Amazon, but only if done right. To maximize sales through product assortment expansion, it’s important to be strategic about which products you add to your ecommerce product assortments.
Here are a few tips for retailers to keep in mind when looking to grow product assortment:
- Focus on products that complement your existing assortment
As a retailer, you’ve probably spent time and resources developing your brand to create certain expectations for consumers. If you expand into product categories that don’t fit with those expectations, you’ll confuse your customers. Instead, focus on products within categories you already sell.
For example, home goods retailer could expand the types of curtains it carries by adding curtains of different colors, types and sizes to its ecommerce site. Expanding to blinds would also be an option. These additions could help drive more sales as window treatments are an expected product category for this retailer. But adding irrelevant products like jewelry or sporting goods, for example, likely wouldn’t drive that extra boost in sales.
- Analyze competing retailer assortments
Don’t forget to pay attention to your competitors. The process of finding new products that might be successful with your retail business is time-consuming and costly to staff, but looking at what’s selling at your competitors is easy.
Use automated tools to analyze the product assortments of your competitors as a start. Understanding which products are selling well with your direct competitors can help you make smart decisions quickly, and can also spark ideas for other products to add.
- Leverage existing supplier relationships
Rather than spending valuable time and overhead resources sourcing new supplier relationships and attending trade shows, leverage your relationships with current suppliers for product assortment expansion.
Most retailers carry only a small subset of the products offered by their suppliers, yet these products are a retailer’s most accessible opportunity for growth because that fulfillment relationship is already in place.
Changing customer expectations combined with the dominance of Amazon have forced retailers to evolve. Many are driving more sales and improving customer loyalty with expanded product assortment through drop shipping. However, it’s crucial that retailers don’t just expand their assortments, but that they expand intelligently.
CommerceHub gives retailers access to a wide selection of supplier and brand catalogs to quickly and easily add new products for drop shipping on their ecommerce sites. Learn more about our assortment growth offerings for retailers today.