🎓 Definition

An assortment cluster refers to a grouping of products, often based on specific criteria or characteristics, designed to cater to a particular segment of shoppers.

The goal of creating assortment clusters is to optimize product offerings based on the preferences, needs, or behaviors of targeted customer segments.

Here's a breakdown of the concept:

  1. Purpose: Retailers use assortment clustering to cater to local preferences, customer behaviors, or specific demographics. For instance, stores in upscale neighborhoods might have a different product assortment than those in more budget-conscious areas.
  2. Based on Data: Assortment clustering is typically driven by data analytics. Retailers analyze sales data, customer feedback, and other relevant metrics to determine which products are most relevant for a particular store or location.

🧪 Example of Assortment Cluster
  • Geographical Cluster: A store in a coastal city might have an assortment cluster for beach-related items, while one in a mountainous region may focus on hiking gear.
  • Demographic Cluster: A store in a university town might have an assortment cluster catering to students, with products like affordable furniture, study aids, and instant foods.
  • Cultural/Ethnic Cluster: A Retailer might create an assortment cluster focused on specific ethnic foods such as Thai or Chinese to cater to a significant population of that ethnicity in the area.

❓What is used for

  • Competitive Advantage

Retailers that efficiently utilize assortment clustering can create a distinct edge over competitors by offering products that are more attuned to local or specific group demands.

  • Rapid Response to Trends

Assortment clustering, especially when backed by real-time data, allows Retailers to quickly spot emerging trends and adjust their product offerings accordingly.

  • Efficient Space Allocation

Retailers can utilize shelf space more effectively by allocating more room to high-demand products in each cluster, thereby maximizing sales per square foot.

  • Loyalty Program Enhancement

By understanding popular assortment clusters, Retailers can design loyalty programs or rewards that specifically cater to those preferences, making the programs more appealing to customers.

  • Tailored Marketing and Promotions

By understanding the specific product clusters preferred by their customer base, Retailers can create more effective marketing campaigns and promotions targeted towards these preferences.

Learn more about the Assortment Cluster
Assortment Optimization
Share of Space
Loyalty Program