Product Assortment & Price Strategy
The choice and the variety of products (product assortment) that an ecommerce website offers, is one of the variables that influence the success and the profitability of ecommerce. In order to allow fashion customers to find the exact product they are looking for, an ecommerce store needs a rich catalog online to choose from. An online catalog can range from a few hundreds styles available to tens of thousands. On the other hand the cost of sourcing and stocking a large selection of products can undermine the profitability of the e-commerce business (Risks). For example if the company is left with a large amount of unsold stock at the end of the season.
The price in the ecommerce fashion business is usually determined by the brands which set a suggested retail price (SRP) at the beginning of the season, but during the selling season there are many moments and promotional activities that allow customers to buy fashion products at a reduced price. These prices are often referred to as Full Price and Off Price. An ecommerce manager has to leverage these moments in order to maximise sales while ensuring a target level of Gross Margin and preserving the brand positioning. We discuss this topic more in detail when we talk about the promotional calendar.