Why Product Segmentation is Worth Your Time for Retail Success
April 30, 2020
In our previous blog, we taught ‘How Products Build Stronger Base For Retailers Than Customers’. Now let us guide you through a simple question and its answer. It will prove the exciting significance of product segmentation and why it plays a crucial role in optimizing your inventory to sell only the bestselling products.
The simple question that also takes you through the beginning of a retail business is:
How does a retail business start?
Before we guide you towards the answer of this emancipatory question for retail business, ask yourself the same question and then look out whether it turns out to be the correct answer. We believe our answers will be the same.
If you’ll lookout for a synonym most relevant to Retail then let us put you straight to the aptest one: Selling. Retail business is all about selling. All the strategies revolve around making the sales happen and making them go high. But selling what? Selling what will keep your retail business up and going, and what will also make it start. Products.
Yes, a retail business starts with products. The next best thing about retail business is surely customers. And the success story of every retail business stars the best products and caters to the best customers.
As now we know that retail business starts with products, now it’s time to know how you get started with these products. First of all, you either produce or choose the products you want to sell. This thing can be of your specific interest or related to the industry you see profit into. Whatever it is, the right choice of which products you want to sell determines how well your business will perform.
Being a good businessman depends upon how marginal you are in planning for profits. A retailer must have a well-calculated plan in deciding which products will give the best profits. Once a retailer knows the type of products he or she wants to sell, then choosing the right products to stock is what keeps the retail business upfront or lagging. And this is right where the need for Product Segmentation takes birth.
Why Product Segmentation is Worth Your Time?
One thing should be well known and well accepted by every retailer: the intent of the business. Every retailer must know the true intent behind putting their day and night into the retail business. Of course, every retailer wants to sell products and serve as many customers they can. But the true intent is to make money by selling the products. And this intent with all the expertise and perfection should reflect into the inventory of your store.
How great it would be if you could maintain an inventory without buying the products beforehand, right? But as it is not possible for a retail business, you need to pay a little better concern on choosing the best products that are capable of attracting sales.
As you buy products to sell, you are obligated to stock products that are capable of giving a good ROI (Return on Investment). So the whole retail business revolves around choosing, buying, stocking, and selling ‘products’.
When a business is started, the products related to the industry are chosen to base the retail store. An optimized inventory determines how well the business will run. Although it is a crucial task to fill the fresh inventory with a stock that could perform well, let us remind you that maintaining it is a pretty hard one.
Imagine if you know which products will give the best ROI, won’t it be great to choose and put only those products on a catalog that can be bestsellers? It is a dream of every retailer and trust me, it can be manifested in reality too. By segmenting products as per their performance and promoting them to either score sales or eradicate them from inventory is the best option to keep the store inventory optimized.
But the realization of this dream opens up by realizing ‘The Retail Truth’. The truth is simple Products are the life of retail. If you’ll run your business on this biggest truth, then going by the product-oriented strategies will never put you down on your way to retail success.
Choosing the right products can’t be achieved by a hit and trial method to reach the desired results. Recognizing the best products based on their own capability is one thing while acknowledging the response of customers towards them is another significant aspect.
An ideal product segmentation considers both of these aspects and gives deep insights to optimize the inventory with the best selling products. After all, it is products that customers are interested in and it is the sole duty of retailers to sell the best products.
You can fill your inventory for the first time, but without product segmentation, the performance and response towards the products is unknown. Thus it is impossible to keep it optimized without accumulating dead stock.
Product Segmentation is the first step towards building a product-oriented foundation for your retail business. Knowing each and every product is the best thing but it’s not feasible. But knowing the groups of products defining their own capability is the revolutionary way to optimize inventory and sell only the bestsellers.
Let your products tell you how better they can sell and to whom they want to get sold to. Product segmentation is the first correct step you can take in your product-oriented retail journey. Stay tuned for all the next steps to a successful retail business.