The goal of creating assortments that target individual preferences at the store level is not without its challenges. The way retailers have traditionally viewed store clustering is at the center of this initiative to get ever-closer to shoppers today. Typically, they have employed a one-dimensional approach to store clustering – commonly grouping stores by volume or space, or capacity. Although easy to implement and understand, such an approach presents a variety of setbacks, as factors like population density and local competition can come into play. The result is a product mix far too generic to appeal to anyone. It could miss the mark altogether, or, it can result in assortments that are far too large with stores with smaller footprints but high sales volume.
In order to get closer to the customer, retailers must rethink the way they cluster stores in order unleash the true potential of assortment planning. In this new thought leadership article, JustEnough, an Mi9 Retail company, will explore five store clustering strategies to help organizations provide the right mix of products to the right locations.