With the help of the assortment matrix, you can understand which product to add and which to remove from sale. We tell you how to create it and how to use it.
What is a product matrix?
Rules for creating a product matrix
How to create an assortment matrix
How often is it necessary to adjust the product matrix?
Possible errors
Expert advice
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What is a product matrix?
Table of Contents
An assortment or product matrix is a list of products sold in a store. First of all, a seller needs a matrix to understand what he offers to customers, manage the assortment and increase sales. A product matrix simplifies work: it allows you to plan a delivery schedule and track what products are in the assortment, what should be removed from the assortment, and what should be added.
The matrix helps classify products according to individually defined criteria. The product matrix is not a mandatory document of strict reporting; it is collected in any form. For example, seller A divides the assortment strictly by product categories, and his competitor B – by what sells better.
The most understandable example of a product matrix is a table, for example, in Google. It lists all the products, distributed by categories. For example, for a clothing store, these would be men’s, women’s and children’s clothing, outerwear and basic clothing, seasonal and clothing of constant demand. Categories are divided into subcategories: for example, long-sleeved and short-sleeved shirts, polo shirts, turtlenecks and T-shirts.
In addition to product categories, the assortment matrix may include the following information:
1.● warehouse balances;
2.● contacts of purchasers;
3.● supplier details;
4.● product expiration dates;
5.● prices;
6.● receipt dates.
If the company trades on the marketplace, not only the manager can work with the product matrix, but also third-party buyers who need to know how many products are left in warehouses. The matrix can also include contacts of the category manager and supplier data.
You can learn how to create sales cards , work with Excel tables and analyze important business data on the course “Marketplace Manager” . The introductory module to get acquainted with the profession is available for free, and you can pay for the full course in installments for 15 months.
Rules for creating a product matrix
Here are three important rules that will help you form a product matrix:
1. Analyze the platforms, target audience, and competitors
Before launching a store on the marketplace, you need to find out what is already being sold on the platform. Then think about what product to sell and in what segment — that is, what price category the products in the store will have. The product matrix needs to be compiled based on this data.
2. Focus on positioning and target audience (TA)
The product matrix should be formed based on the store’s positioning, TA , and price segment. For example, if it is a pet store, you need to determine what products will be presented there: for all animals or only for cats and dogs. Then you need to decide what will be sold: food, fillers, toys, accessories. Clear positioning helps to determine the TA and select products that are interesting to them.
Next, determine the price segment and make a rough list of what products to purchase and upload to the marketplace. For example, a store can operate in the high price segment and sell only electronic products for animals: drinking bowls, feeders, trays, heated mats. Therefore, its target audience and product range will differ from a regular budget pet store.
3. Keep the matrix intact
If a store offers ten products for men and ten products for women, five for children, one scratching post and something for the home, the buyer will most likely get confused by this strange assortment and go to another seller with a more consistent assortment.
What products should you always have in stock:
● Leading products
are basic items that are in constant demand, such as bowls or drinking bowls.
● Related products
are items that are bought in addition to the main item: mats for bowls, vitamins.
● Products that competitors do not offer
and the difference may be small, such as a square instead of a round water bowl.
In order for the store to develop, it is necessary to supplement the range of goods, for example, in a store of classic suits it is worth offering accessories in the same style: belts, ties, cufflinks.
How to create an assortment matrix
In order for the store to be profitable, when creating the product range matrix, it is necessary to determine in advance:
1.● needs of the target audience;
2.● assortment and pricing policy of competitors – what and at what price are stores with a similar matrix selling;
3.● store format – a showroom and a warehouse store have different matrices;
4.● price segment of the store – what class of goods will be sold;
5.● product categories – what exactly is planned to be sold;
6.● financial resources – will there be enough funds to maintain the number of goods in warehouses.
How often is it necessary to adjust the product matrix?
On average, a product stays relevant on the marketplace for two years. Then either a more attractive new product or a modification of the product appears. Therefore, it is necessary to regularly analyze the assortment matrix, introduce and promote new products, and remove the old product over time. It is better to do this at least once or twice a year.
To make adjustments to the product matrix , i.e. to understand which product to remove and which to put in, sales data for a certain period, for example, for a quarter, is needed. The ABC analysis method is popular, in which products are divided into three groups:
1. Category A
products that sold the most and brought the most profit, up to 80% of sales, they should be left in the matrix.
2. Category B
products that also sell steadily, but bring less profit, about 15% of sales. They need additional work: perhaps redo the infographics or advertising, revise prices and check availability in warehouses.
3. Category C
products that sell in minimal volume: up to 5% of all sales, at zero or even in the minus. It is better to remove them from the assortment, that is, sell off the remainder, and redirect the proceeds to products of category A.
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Possible errors
Here are examples of mistakes that are often made when compiling an assortment matrix.
❌ They load too wide a range of products at once
A large selection does not mean that people will buy a lot: a customer comes for a certain product and looks for a specific card. The assortment should be added gradually, not 100 cards at once, especially if there is no possibility to maintain stock in warehouses yet. It is better to work on quality: 10 well-designed cards with sufficient stock can bring more profit than 100 with incorrect descriptions, low-quality photos and one or two items in stock.
❌They do not analyze or correct the matrix
Regular adjustment of the assortment matrix helps to increase sales, but many sellers do not do this: they simply load the goods and work with the first matrix for years. Managers spend time working with cards of irrelevant goods of category C, but do not remove them from the assortment.
❌They don’t add new items
The opposite mistake is not to include new items in the matrix. For example, when light dresses sold well in the summer, but with the onset of cold weather, sales fell. The seller sees low sales, but does not analyze the matrix and does not add alternative options in time, for example, evening dresses, which are relevant before the New Year holidays.
❌They make the product matrix too big
In this case, category managers do not have time to monitor the balances: when the product runs out, sales will fall, cards will disappear from the product list, and it may be difficult to return them.
❌ Add products from different categories
A diverse product matrix can work, but the logic must be clear. If a store sells lawn mowers, low-priced women’s clothing, dog products, and adds garlands for the New Year, the buyer simply does not understand what to buy. You can add trends to the assortment, this will be appropriate. For example, a mid-priced bed linen store can sell anti-stress pillows in addition to regular pillows.
