Retailing holds great lessons for marketers in all industries because as long as there have been customers, retailers have focused on the customer experience. And one of the biggest elements of the customer experience is assortment - literally addressing the customer's need for variety or choice. Think of a time when you weren't exactly sure of what you were looking for - didn't you go first to places you knew had a wide variety? That's assortment.

How do retailers manage assortment? When you layer on the challenge of multiple locations, you can see how the issue quickly expands. In order to deliver a consistent customer experience, many retailers maintain a standardized layout or “floor set” among their locations - either keeping the same assortment in all locations,  or varying by location. Neither approach is always better than the other, but in either case the question is how to best vary the product offerings to deliver the best customer experience.

That concept is also known as localization, and it can be quite a challenge without analytics. Early in my career, I would pull category level sales by location and put it into a spreadsheet. Then I'd sort it and make a note of the top locations by category and use that for decision making. I now know how inadequate that was. To complete the picture for you, when an order for a specific category arrived in to the distribution center, I would refer to one of the hundred sticky notes attached to my computer monitor and manually make sure that the locations received the product.

Not only was my little process painstaking, it fell short in accuracy, it was clearly inefficient, and it definitely was not scalable. With that old approach, a top volume location would likely end up on the top of the list for every category, but a lower volume store may not even get a sticky note. Sticking strictly to my sticky notes would mean ignoring the need to create a great customer experience in every location, regardless of sales volume. Quite a problem, right? But it's not insurmountable.

Using analytics, retailers are able to cluster stores based not just on demand but many other factors. Similar selling patterns of specific product attributes such as sleeve length, silhouettes, and colors can be utilized to find groups of stores that have similar customer demand. Also, location attributes such as location size or whether the store is in a shopping mall or a lifestyle center can be utilized. Even demographics of the area can be leveraged such as the average income or average age information.

Utilizing analytics enables retailers to leverage all of these factors to determine what's most relevant in the customer’s purchasing decisions. Analytics can uncover similarities that a volume based analysis may not. For example, two stores with similar volume and in the same region may need different assortments simply because of the varying tastes and preferences of the shoppers that frequent those locations. Get the assortment wrong and you miss the mark and lose sales, but if you get it right then you don't lose the sales and you deliver on a key part of the customer experience. Getting it right consistently helps you cultivate loyalty and bolster your brand. Analytics help you localize your assortment in a way that is scalable, automated, and actionable. And it will definitely save you from using a lot of sticky notes!

Assortment also affects the customer experience online, and analytics also can be applied to improve the online customer experience. Not sure where to start? Put aside your sticky notes and check out our page on analytics. Or you can take a look at the 2015 Forrester Wave report where SAS was named a leader in Big Data Predictive Analytics Solutions.