Variety and assortment in retail can have a significant influence on where consumers choose to shop. Research published in Marketing Science found that consumers ranked assortment variety just behind location and price when explaining why they patronize their favourite stores.
But offering more choice is not as simple as stocking more products. Retailers have to balance breadth, the range of products offered, with depth, the number of options available within them. Too little choice can hurt sales, while too much can spread inventory and investment too thin.
In this article, we’ll look at how breadth and depth shape retail assortments, what determines the right balance, and how retailers can make better assortment decisions.
How breadth and depth of merchandise influence retail assortment
Breadth and depth of merchandise are often used to describe the variety and assortment of retail products a retailer makes available to consumers.
Breadth and depth are two essential dimensions of a retailer’s product mix.
Breadth
Breadth refers to the range of different product categories.
For example, a shoe retailer may have a variety and assortment of various shoe categories such as:
- Athletic
- Dress shoes
- Seasonal (boots and sandals)
These products are related, as they all fall under the category of footwear, but they range in the kind of footwear.
Depth
On the other hand, depth of merchandise refers to the number of different options available within a specific product category.
For example, as noted above, a shoe retailer who develops depth within the footwear category would offer various:
- Styles
- Sizes
- Brands
So, a retailer with a good depth of merchandise would have many shoe options within a single category.
Take The Shoe Company for example. This omnichannel retailer carries all categories of shoes, running shoes, boots, sandals, and work boots–a wide breadth. And then it offers a depth of merchandise by providing many varieties of styles, sizes, and brands from various manufacturers within those categories.
Together, an excellent combination of both breadth and assortment depth satisfies consumer wants and leads to customer retention.
Now it may appear a relatively simple matter–just order a lot of everything to cover your bases.
However, that is a costly strategy.
Let’s see why.
Striking the right balance of breadth and depth of merchandise
More breadth and depth can give customers greater choice, but simply carrying more of everything is rarely practical or profitable. Retailers have limited inventory budgets, selling space, and demand to spread across their assortment. Every decision to add another category, style, size, colour, or brand means committing inventory and resources that could have been used elsewhere.
The right balance depends on a number of factors, including:
- Customer demand
- Trends and seasonality
- Available space
- Competition
- Cost and profitability
- Inventory turns
- Supplier relationships
The challenge is determining where additional choice is likely to generate incremental sales and where it may simply divide existing demand across more products.
Too little or too much breadth
Insufficient breadth can leave gaps in the assortment. If customers regularly look for product types a retailer does not carry, those shoppers may turn elsewhere to meet their needs.
Too much breadth creates a different problem. As the number of products or categories grows, inventory investment can become spread across a larger assortment. A retailer may technically offer more choice while carrying too little of the products customers actually want most.
Too little or too much depth
Insufficient depth can also limit customer choice. A retailer may carry the right category but fail to offer enough variation in sizes, styles, colours, brands, or price points to meet customer demand.
However, adding more variations is not always better. Excessive depth can create overlapping products that compete for the same demand, tying up inventory in options that add little incremental value.
The right assortment varies
The ideal assortment can vary significantly by category, location, season, and channel. A product that deserves significant depth in one store may have limited demand in another. Similarly, a seasonal category may require broader choice during its peak period and a much tighter assortment later in the season.
This is why assortment decisions need to go beyond simply offering more products. Retailers need to understand which products create meaningful additional choice, how much demand exists for each option, and where their inventory investment is most likely to generate a return.
Add science to the art of variety and assortment in retail
Finding the right balance of breadth and depth becomes much more difficult as assortments grow. Retailers may be making decisions across thousands of products, multiple locations, different sales channels, and constantly changing demand.
Leading retailers increasingly use forecasting and assortment planning technology to understand where additional choice is likely to add value and where assortments should be reduced or rebalanced.
1. Demand forecasting
Demand forecasting gives retailers a clearer picture of what customers are likely to buy, where they will buy it, and how that demand may change over time.
Rather than relying only on historical sales or broad averages, retailers can forecast demand at a more detailed level, such as by product and location. This makes it easier to identify where an assortment may need greater breadth, where certain products require more depth, and where inventory is being committed to options with limited demand.
Forecasting can also help retailers account for factors such as seasonality, changing trends, promotions, and differences between locations. For example, a style that warrants significant depth in one store may have much lower expected demand in another.
These insights give retailers a stronger foundation for deciding what to carry before inventory decisions are made.
2. Assortment planning
Assortment planning turns demand insights into decisions about which products to carry and how much choice to offer within each category.
Retailers can use assortment planning technology to evaluate the expected contribution of individual products, identify gaps or unnecessary overlap, and determine where adding or removing an option could improve the overall assortment. Instead of applying the same product mix everywhere, assortments can also be tailored to the demand patterns of individual stores, clusters, regions, or channels.
For example, two stores may sell a similar volume of women’s footwear overall but have very different demand by style, size, or price point. One location may benefit from broader style variety, while another may generate a better return from greater depth in a smaller number of proven sellers.
This helps retailers build assortments around expected customer demand while making better use of available inventory, space, and budget.
3. Inventory and supply chain management
Even a well-planned assortment can underperform if inventory is not available in the right quantities and locations. Inventory and supply chain management help retailers support their chosen breadth and depth after assortment decisions have been made.
For example, a retailer may decide that a particular store needs greater depth in a high-demand product. Forecasting, purchasing, allocation, and replenishment can then help ensure enough inventory is available to support that demand without overcommitting stock to locations where the product is less likely to sell.
As demand changes, retailers can also rebalance inventory between locations, adjust replenishment, or modify future purchasing decisions. This helps maintain the intended assortment while reducing the risk of stockouts in high-demand products and excess inventory in slower-moving ones.
4. Omnichannel assortment planning
E-commerce gives retailers more flexibility to offer greater assortment breadth and depth because online channels are not constrained by physical shelf or floor space in the same way as stores. Retailers can use this additional flexibility to carry more specialized products, extended sizes, colours, or styles that may not justify space in every physical location.
However, a larger online assortment still needs to be planned carefully. Retailers need to understand which products should be available across all channels, which should be exclusive to certain channels, and how inventory should be positioned to support demand.
For example, slower-moving or highly specialized products may make more sense online, while stores may focus on a tighter assortment of products with stronger local demand.
By planning assortments across channels rather than treating each one separately, retailers can offer more choice while still making efficient use of inventory.
Together, these capabilities give retailers a more complete view of where assortment should expand, contract, or shift as demand changes.
Variety is the spice of retail
The right balance of breadth and depth helps retailers give customers meaningful choice without spreading inventory too thin.
But that balance is rarely static. Demand changes by product, location, season, and channel, which means retailers need to continually evaluate where greater variety adds value and where a tighter assortment may be more profitable.
With accurate demand forecasting, assortment planning, and inventory optimization, retailers can make those decisions with greater precision and build assortments that better reflect what customers actually want.
If you are unsure whether your assortment has the right breadth and depth, Retalon can help you identify where to expand, reduce, or rebalance your product mix.
About the Author
Abigail B. Guevara is a strategic communications advisor with a passion for translating complex ideas into clear, compelling stories. With years of experience leading communications initiatives across sectors, she brings a thoughtful and results-driven approach to every message. At Retalon, Abigail explores the evolving intersection of retail, AI, and strategy—bridging insight with impact.  
