Historically, assortment planning has had different meanings for different parts of a consumer products (CP) organization. Supply may plan assortments around operational efficiencies, while sales may look to align their assortment to the retailer’s categories and promotional strategies. Marketing may look at it from a completely different perspective, as well, to bring in the consumer decision lens.  

However, as the industry moves toward focusing on revenue growth management (RGM) – a broader evolution of trade promotion management that focuses on a more holistic view of a CP organization – there’s also a need for a more holistic view of product assortment that drives toward consistent understanding, planning, and execution around assortment to drive better organizational success. Below, we’re unpacking how to holistically approach your CPG product assortment strategy.

Taking a Holistic Approach to CPG Product Assortment 

For CP companies, this means thinking more holistically about what role products play at the various retailers to which an organization sells. Sure, promotion plans will still play a large role in how we think about assortments, but now CP organizations should also be looking at and asking other questions, like:  

• Is there a product missing that my competitors are selling? 
• Are there enough unique items that are special to my brand as opposed to a different brand? 
• What are my “loss leaders” (products consumers will specifically go into a store for when on discount) vs. my “hero products” (products that will always make money; a brand’s calling card)? Do I have the right combination of these to drive revenue? 

Even when taking assortment out of the context of TPM or TPO, a number of CP organizations think of it simply as “price pack architecture (PPA).” Even then, when they think of PPA as it relates to their products, they typically only look at it from “look and size” – how does the product look, and how many sizes should we offer this to consumers?  

Moving Beyond Look and Size 

As we take our thinking to the next level with RGM, we can also evolve our thinking about assortment beyond this basic understanding of price pack architecture – looking at your portfolio and optimizing the products within it. Brands can go past just offering different looks and sizes for products and instead dive deeper into the “why” of your brands and “what” your consumers are looking for.  

We encourage companies to invest in PPA to drive towards a better understanding of what value consumers are seeking from the various features and benefits of their products as well as what value these same consumers see from the features and benefits competitor products may provide. 

Consumers are looking for products that will meet their evolving needs, and sometimes those are needs that they didn’t even realize they had. If a product can provide value by addressing those needs, consumers will pay for it and pay extra. For example, if a consumer is looking at two cans of beans, both of similar size, but one can has a pull tab for convenient opening but the other doesn’t, the odds are the consumer will pay the extra few cents for that feature even though the products are essentially the same look and feel. 

Assortment is changing alongside the industry as we move from trade promotion management / optimization to revenue growth management, but functionally, where does that leave you as an organization? Where do you and your brand’s processes fit in the maturity model or future of assortment?  

Let’s break it down into three categories below: (1) the foundational activities brands should be doing with product assortment; (2) leading edge product assortment processes to drive revenue successfully; and (3) the future of product assortment. 

Foundational Assortment Activities 

At a minimum, your organization should have a structure or process to look at your portfolio from the brand lens as well as the customer lens to identify the key roles that your products are playing. Below are some sample activities to help your organization determine if you’re reaching this foundational level: 

1. Understand the role of your products at the retailer for the organization as well as for the consumers 
2. Structure your product groupings in a way that allows for operational planning and trade planning 
3. Keep the consumer front and center throughout all your planning and strategizing 
4. Invest in understanding existing price pack architecture 

These activities will help you review and evaluate the value proposition that your brand and products are providing to consumers. Price is not always correlated to size; in fact, today, many consumers will pay more to get less if it makes sense for their needs (i.e., help with portion control, limiting indulgence, etc.)    

Leading Edge Activities 

If you’ve completed the above activities confidently and accurately, your brand is on its way to being leading edge with product assortment. The next step, however, to truly be at the leading edge of product assortment activities is to be able to connect all these data points to then take back to your product marketing teams. Some sample activities to bring your organization to the leading edge of product assortment: 

1. Conduct an advanced PPA review to optimize your pricing against features and benefits 
2. Coordinate your product development process to take advantage of blank spaces identified 
3. Refine your organization’s price and promotion planning to optimize margins for the manufacturer and the retailer (ex. Are you simply subsidizing existing buyers or are you stimulating new or incremental purchases?) 

Future of Product Assortment 

If you’ve completed all the activities in the leading edge section, chances are your product assortment processes are more mature than most other brands. So, how do you stay leading edge to ensure continuous revenue growth for your brand? What does the future state of product assortment look like at CP organizations? 

From our perspective, the future state of effective and mature product assortment processes looks like: 

1. High coordination and alignment internally between all cross-functional teams 
2. Leveraging technology and tools to streamline the reporting process to allow focus on the analytics and identification of opportunities 
3. Performing regular reviews of your company’s product assortment to stay on top of competitor and marketplace trends – and being able to quickly put those into action with your product development process 
4. Developing aligned price and promotion strategies so that your organization isn’t leaving any money on the table 
5. Engaging regularly with consumers and retailers to get feedback and avoid siloed thinking and actions 

If you’re able to look at the category overall and see the trends with consumers and competitor brands, what will start setting your brand apart from competitors is how quickly you can deliver those insights to your product innovation / product development teams to act on it and get a new product on the shelves to address those new consumer needs. 

We’re beginning to see more tools pop up to help with driving insight development and delivery as the analytics field becomes more accessible to brands (data & analytics departments have grown over the last 10 years as well as the increased mainstream usage of generative AI). However, brands – especially younger brands – need to have access to data that are beyond just their own data.  

If you’re looking at just your own brand shipment data, you likely will never understand the role your product is playing at a retailer because you can’t look at the category from a holistic perspective and see how your products compare to others. If you can see those holistic insights for a product or a category and quickly transition those to your product development team, your brand will continue to grow and resonate with consumers. 

If you’re experiencing any of these challenges with your product assortment process, you can check out our comprehensive list of trade and RGM services here.