Product assortment also referred to as merchandise mix is the variety of products sold in a store.
It is made out of two components:
1. Product breadth
This is the variety of product lines or categories. The more types of products you sell the bigger the product breadth. For example, stores like Costco and Walmart have big product breadth because they sell everything from toothpaste to alcohol.
2. Product depth
The product depth, on the other hand, refers to the number of products in a line. To put it in other words, the brands and variations of the product available in your store. For instance, if you sell potato chips and you have only 2 brands and 2 different flavors of each, you have a small product depth.
Specialty or niche stores are the ones that normally have the biggest product depth.
Having enough products and types of products is important in regard to customer satisfaction. However, it might be difficult for your inventory and it comes with great costs. This is why you need to plan and optimize your product assortment. Stock more of your best-selling products and let go of products or variations that are not selling well.