As I have traveled the world working with home centers on five continents. I have found that there is a general tendency to over assort the product range. That is to continue to add more and more different products into the store or onto the website with the assumption that more products will create more sales. This results in duplication and redundancy of SKU’s [Stock Keeping Units] This is a false assumption and, in fact, will create the opposite result of decreasing sales.
As more and more products are jammed into limited space, the result is a reduction of space for the best-selling items and the allocation of more and more space to slow or non-selling products. The obvious impact is to slow sales on the better selling products and to overstock the store with dead merchandise. This piling on of products in the stores creates a cluttered unpleasant shopping experience. It puts the focus on housekeeping instead of selling which impacts the quality of the salesforce.
The department stores have always been the worst culprits of over assortment, and their solution has been to create an open-to-buy system that prevents the merchants from reordering the better selling product until inventories are reduced by selling the less desirable units. Common sense would say that his is self-defeating. Customer accommodation is always better than customer manipulation. However, the department stores have continued this policy while they forfeited sales and loyal customers to non-mall competition.
The next detrimental course of events is to respond to falling sales and slow turning inventory by running limited time sales. Now they have added insult to injury as they try to bribe the customers to return to stores that do not have the products they want or the shopping experience they enjoy. Meanwhile they destroy their price/value image.
Macys has been the quintessential department store to exhibit all these worst merchandising practices. Smart retailers have known that there is value in understanding that Less is Moreis the smart merchandising strategy to accentuate the positive and eliminate the negative. It seems that perhaps Macys has got the message. Here is a quote by Jeff Gennette the CEO of Macys quoted in the Wall Street Journal [Nov. 20, 2021]
“Through the pandemic, our opportunity to work through our stock and get in line with demand is a benefit we’ll hold on to going forward.” He said stocking fewer goods translates into less cluttered stores, which is a better experience for customers, and results in more full-priced sales.”
There is a lesson here – a story with a moral for all retailers to understand that the customers do not want more products, they simply want the right product for their need. The primary job of the competent merchant is to curate a model stock that provides the features and benefits that fit the target customers needs without needless duplication and redundancy.