What are the best practices for creating a balanced and profitable product mix?

When performing an assessment of the product and market landscape I like to focus on both the total market and a couple of key competitors. Initially I'm trying to build a strong foundation to direct more in depth research and analysis. My POV is to start broadly: what is type of product being introduced, key price points in the market, color depth and breadth, and when is it being introduced. Ideally there is also a YOY comparison to access where strategic changes are taking place. I'll then use these initial findings to help direct what areas to go deeper in. Retail analytics platforms like Edited make this type of exercise easier and repeatable.

Start by analyzing sales data and customer preferences to understand which products drive revenue and meet market demand. Include a diverse range of products that cater to different customer needs and price points, ensuring both high-margin and volume-driving items are represented. Regularly review and adjust the product mix based on performance metrics and market trends. Monitor inventory levels to avoid overstocking or stockouts, which can impact profitability. Finally, collaborate with suppliers to stay updated on new products and industry innovations, integrating them into your mix to stay competitive.

Best practices include analyzing market trends and customer data to identify high-margin products while ensuring diversity across categories and price points. Regularly review performance metrics and adjust the mix to capture emerging opportunities. Collaboration across teams helps align product offerings with strategic goals for long-term profitability.

Organize your products into clear categories and subcategories to simplify decision-making for customers. This structure helps identify where you may need to expand or refine offerings to meet market demand more effectively.

Understanding your target market and competitive position is crucial for optimizing your product assortment. By analyzing your customers' needs, preferences, and behaviors alongside a detailed review of competitors’ offerings, you can pinpoint market gaps and opportunities.

Another input I like to add is a POV on the value that buyers of different products bring to your total store. What you may find is that certain products in the tail of your assortment are great for attracting and retaining consumers who are more valuable to the profitability of your total store than to the individual product line. The same analysis may also uncover product lines with diminishing customer returns. Combined these can help inform the strategic direction of your product line - what are the products that grow my category and what are the products that grow my store.

Balancing product breadth and depth means offering a variety of categories while ensuring each category has enough options to satisfy different customer needs without causing confusion. Product breadth is about the range of product lines, and depth is about the number of variants within each line. Achieving this balance requires aligning customer preferences with efficient inventory management, turnover, and margin goals.

When doing this type of analysis it can be very useful to narrow the scope to your full price sales only. A lot of products can look very appealing on markdown, but it may not be in the best interest of your brand to comp product that had to be marked down 30% to sell. In this scenario are the sales reflective of true consumer needs, wants, and loyalty or are they more reflective of a bargain? Ideally my strategy is to create product for consumers that were willing to buy my products then and now at full price. The products that attract those consumers are the consumers I want to build my brand with.

In curating a balanced and profitable product mix for a global fashion business, prioritize market research to understand regional preferences. Align product assortments with consumer trends, ensuring diversity while maintaining brand cohesion. Collaborate closely with design and merchandising teams, monitor inventory levels judiciously, and leverage data analytics to optimize pricing and promotions. Regularly reassess and adapt strategies to reflect evolving market dynamics, fostering a dynamic and profitable product mix.