Assortment Matrix: Rules for Compilation, Examples, and Samples

What is an Assortment Matrix and Why Does a Business Need It? An assortment, also known as a product matrix, is a product catalog sold in physical or online stores. Sellers create the catalog not only to control product positions but also to note characteristics, stock, and purchases. Data collection is carried out in CRM, Excel, or Google Sheets.

This tool is used to organize store management issues such as:

●      Identifying the most popular positions - the report shows what customers buy most often.

●      Understanding customer satisfaction in relation to price - if sales are falling, prices may be discouraging customers.

●      Planning purchases - the tables show popular products and help determine when purchases should be made so that the warehouse always has the required amount in stock.

●      Identifying unprofitable positions - if a product has not been purchased for several months, it is non-liquid and better to remove it.

How Should Products Be Distributed in the Assortment Matrix?Sellers independently decide how to record products in the table, but general recommendations can be considered:

●      Basic products (locomotives): Customers consistently buy these positions, so they must always be in stock.

●      Complementary products: Items needed for the full use of basic products that increase revenue by raising the average check.

●      Status products: Products that complement the basic group, e.g., imported goods that are 30–40% more expensive than local ones.

●      Substitutes: Products that can satisfy customer demand when basic products are out of stock.

●      Seasonal offers: Products sold only at certain times, e.g., antifreeze for cars.

When to Create and Adjust the Assortment Matrix Entrepreneurs create a product matrix when launching a business, at the very start of the store’s operations. Initially, tables are used to combine all product positions, suppliers, and characteristics in one place.

If the store is already operating, additional information is added to the table. For example, removing low-demand products, planning purchase terms and quantities, and adding new product positions. Analysis is carried out once a quarter or during another convenient period.

Stages of Creating an Assortment MatrixThe product matrix is the result of analytical work. It is not simply filled in but includes products planned for sale, requiring prior market research and studies.

●      Defining the online store format: The format helps determine the assortment. For example, a small grocery store may not succeed online, while a clothing store can easily move some positions online. The format also influences the market analysis carried out by entrepreneurs.

●      Studying the target audience: The seller must understand who will buy the product. This affects positioning, development, and the choice of sales platform.

●      Market and competitor analysis: Marketers conduct studies to examine competitors and customer demand. Often, customers are not ready to buy foreign products and prefer local analogs. It is important to determine how much customers are willing to spend in order to calculate store economics.

●      Product selection: If a business starts from scratch, it is easier to first create the most in-demand basic and complementary product lines. Later, less-known brands can be added once steady sales are achieved.

●      Product segmentation: Sellers always divide products by categories. For example, engine oil exists both for passenger cars and heavy machinery. This means the product should be segmented by target audience, placed in different positions, and planned for different sales volumes.

●      Pricing: Once the seller decides what kind of products to sell, prices must be set. Blindly focusing on competitors is not correct. All calculations should be based on own costs. Competitors may have special arrangements with suppliers, allowing them to set lower prices that may not be acceptable for you. The goal is not to engage in dumping but to make profit.

●      Planning: Sellers plan expenses and purchase volumes based on the assortment matrix. For example, more funds are allocated for basic locomotive products that bring the greatest profit. Initially, it is better to allocate more budget to basic goods and earn one and a half times more profit than to invest heavily in status products with lower profitability.

Mistakes When Working With an Assortment Matrix

●      Lack of market analysis: This leads sellers to choose unsuitable products as locomotives. For example, a sportswear store that focused on sneakers without knowing demand, while customers wanted hoodies and accessories. As a result, demanded goods are out of stock, and purchased sneakers remain unsold.

●      Ignoring competitors: Without monitoring competitors, the store risks low sales if competitors sell the same products cheaper on online platforms.

●      Too wide assortment: Experts believe that any product group should include 5–6 positions to simplify customer choice. Too many categories often confuse buyers and complicate decision-making.

●      Lack of analytics: An assortment matrix is just a table, but the data in it is used for important store management decisions. Without collecting and analyzing sales information, problems will arise, e.g., late purchase of seasonal goods, which gives competitors an advantage.

●      Lack of financial reporting: Entrepreneurs must calculate revenue from each product group’s sales. Figures show which positions should be purchased regularly and which can be delayed. For example, an auto accessories store should regularly buy engine oil, but antifreeze is not necessary in summer and early fall.

SummaryThe assortment (product) matrix is a catalog of products sold by the store. Sellers divide products into categories: popular, complementary, or seasonal.

Sellers use data tables for control and analytics. With the matrix, they can manage assortment control, stock, demand, and timely warehouse replenishment.

Both physical and online stores build an assortment matrix according to the same rules. The table includes product name, category, price, and supplier information. Additional information can be added if necessary.