For those interested in retail strategy, Winning at Retail by Willard Ander and Neil Stern serves as a great resource. Over twenty years ago, when the book was written, both authors were affiliated with McMillian/Doolittle, a highly regarded leader in retail thought leadership. Their thinking has proved to be lasting.
The essence of the book is finding a meaningful niche, and then being the best at that niche. While it’s a bit more complicated than that, I find myself referring back to this resource more than several times a year, especially when devising retail strategies for clients, or more simply when I analyze retail performance.
The chapter “Winning with Dominant Assortment” stands out to me for several reasons. As a former retailer, I instinctively associate assortment with inventory and space management. As a consumer, I think of assortment in terms of a store always having what I need without confronting overwhelming choices that complicate decisions.
Ander and Stern would likely argue Dominant Assortment encompasses both perspectives.
They assert that achieving a Dominant Assortment doesn’t require the most items or the widest brand selection. It’s also not about having so many products that inventory costs prevent profitability or create a cluttered, confusing shopper experience. Does anyone remember the short life of Tandy’s Incredible Universe stores? Yes, even the largest foot-print retailers struggle to maintain a dominant assortment in every category due to inventory costs, space limitations, or some categories lack of importance to consumers.
Putting the Franchise Tag on Key Categories!
Every savvy retailer understands the role, the financial contribution, and the trajectory of their categories. From this understanding, they also recognize that not all categories are created equal.
Similar to NFL teams using a franchise tag to retain a star player, there exist categories that are so vital to the store’s success that they must be fiercely protected and prioritized. Extending the sports analogy to retailing, we could aptly label them as Franchise Categories.
To clarify, many of these key categories were previously called Destination Categories due to their central role in a retailer’s relationship with shoppers. However, I consider Franchise Categories to be even more vital, as they drive a disproportionate share of the retailer’s business and represent offerings shoppers would truly miss if unavailable. Once identified, these categories deserve tailored support. I find it useful to organize this support into three dimensions: visual, numerical, and ergonomic.
- Visual. Franchise Categories, whether in perishable departments, center store of a supermarket, or electronics sections of a mass merchant, should be displayed impressively to create a distinctive shopping experience compared to competitors, with sufficient space for effective merchandising and product presentation. Within this Visual Dimension, categories should feature an organized structure, achieved through specialized fixtures or a departmental ambiance, making them a standout area in the store. Ideally, clear identification signage should be visible to shoppers upon entering the store, guiding them to the category through open sight lines as they navigate the shopping environment.
- Numerical. Numbers are important Franchise Categories, but the metrics should heavily focus on top line sales. Measurements such as customer penetration, time in category, basket size impact and others that measure consumer interaction are among those to be considered. When possible, use syndicated market level data to track marketshare to gauge the success of the effort. Franchise Categories should optimally present a broad product mix of consumer-relevant items, complete with companion displays so that an extended number of items carried can be displayed without clutter and a preponderance of single-facing items, which make for less efficient trip for the shopper. It may involve extending variety of locally produced items and cross merchandising displays with compatible items from other categories. Franchised Categories are also excellent platforms to develop and market signature items whether they be a tasty bakery item, a local produce relationship, or a new line of premium private label.
- Ergonomic. While enabling shoppers to shop is critical, this aspect is often overlooked. Franchise Categories should be designed for easy navigation and quick purchase decisions. Providing sufficient space for engagement is crucial. Even categories with a strong assortment can underperform if confined to cramped, narrow aisles. Expansive categories with a broad product mix can generate interest, but may also create anxiety and prolong decision-making if choices are overwhelming. Offering extensive variety reinforces the perception that the category meets all shopper needs, which is a strength. However, as Ander and Stern note, unguided choices—lacking clear organization or in-category communication such as highlighting top sellers, best deals, or decision-support tools—can frustrate shoppers. These categories are also prime candidates for integrating technology-based shopper aids. More insights on innovative Franncise Category management strategies will follow in other posts.
The good news for retailers of all sizes and formats is achieving Dominant Assortment in critical categories is possible. The only caveat for smaller format stores may be restricted in the number of Franchise Categories they can effectively showcase. To Williard Ander and Neil Stern, thank you for your forward thinking in the pages of Winning at Retail. Your wisdom still rings true.
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