A product that flies off the shelf in one place may linger unwanted in another. In France, people prefer croissants and jam for breakfast while Brits demand toast, bacon and baked beans. Every country has its own requirements when it comes to the product range available in stores. There is no global one-size-fits-all solution. And even within a country, there are regional differences. For example, Germans in the north love their Grünkohl mit Kassler (kale with sausages) while in the south, Butterspätzle (butter noodles) are a hot favourite.
But actively designing a product range is about more than selecting goods based on local customer needs. Factors such as freshness and quality, value for money and attractive presentation are also crucial. In-demand trend products also increase the appeal of a product mix – from organic products to convenience foods.
Higher, deeper, wider?
Every merchant also has to decide how wide and how deep their product range should be. The more product categories offered, the wider the mix. The more product variants within a category, the deeper it is. For example, a speciality cheese store essentially just sells one product category – cheese – but offers a variety of different sorts. In other words: the product range is not very wide, but it is extremely deep. In contrast, a department store has a wide but relatively shallow product mix.
Last but not least, the height of the mix is also an important factor. This describes the number of articles in stock. There is little point having the perfect product mix if the goods are always out of stock.
Experts create exactly the right product mix
METRO combines 2 ways of creating the ideal product mix. Firstly, several international trading offices are responsible for the global procurement of foods. The offices buy the products directly from the source, without any middlemen. This ensure that the goods reach the shelves via the quickest route – whether it’s beef filet from Argentina, salmon from Norway or papayas from Thailand. ‘We constantly monitor the markets and are always on the lookout for innovative products,’ says Claude Sarrailh, Chief Procurement Officer at METRO AG. ‘Our global procurement ensures that we can meet the individual needs of every country and live up to the high standards of our HoReCa customers around the world.’
Secondly, every METRO country has special teams on the ground for local procurement and product mix design. The category managers play an important role here. They ensure that the assortment is put together with customer needs in mind, and continue developing it on an ongoing basis. Their remit includes defining groups of products that belong together, such as jams and marmalades or oil and vinegar. They develop sales strategies for these categories and concepts for their optimum presentation on the shelf.
The right mix is crucial
‘A product mix should exude clarity and competence. It should offer unique solutions and stand out from the competition,’ says Vincenzo Tralli who, as Head of Own Brand at METRO Italy, knows how to put together the perfect product mix in the own brand segment. ‘As own-brand experts, we support the category managers in their work by identifying gaps in the product range and developing new own brands precisely tailored to meet the needs of the HoReCa sector.’ The aim is clear: ‘We are looking for a product mix that covers a broad spectrum – from basic everyday staples to exclusive premium products, from goods from all over the world to regional products.’
Vincenzo Tralli keeps a close eye on the trends and preferences of his fellow Italians. For example, poke bowls are the big sellers in Italy at the moment. These exotic salad bowls containing raw fish such as salmon or tuna that is marinated and diced are among the most-ordered items. Another popular trend product is gourmet pizza with local ingredients such as olives, mortadella or pistachio pesto.
Tips for small merchants
But what lessons can Traders – i.e. independent retailers such as small grocery stores, kiosks or fuel stations – learn from strategies for the wholesale trade? The answer is, there is no universal formula for a good product mix. But there are a few tried-and-tested principles. For example, small merchants should remember the adage: less is more. Rather than cramming a small selling space full of goods, it is better to concentrate on the essentials. Instead of 20 varieties of pasta sauce, 2 is enough – provided that they are exactly the products that consumers prefer. So it is important to ask regularly: Who are my customers and what matters most to them? What are the biggest selling articles and which are less popular? Merchants should also look around them. What do neighbouring merchants sell? Where is there a gap?
Last but not least, a nose for trends is vital. Every Trader should remain curious and keep on eye on what is happening within their sector. Because one thing is clear: no product mix should be set in stone. Slow sellers should be regularly weeded out and replaced with new products. As a strong partner for strong product mixes, METRO can help Traders to rise to this challenge – so that every pot can find the right lid.
Product ranges at METRO
The product range in Germany currently contains around 50,000 articles, around 7,500 of which are METRO own brand products. Internationally, there are around 60,000 METRO own brands. They make up around 20% of the product mix by area. Globally, METRO lists more than 500 organic products in its own-brand range – 100 of which have been developed internationally and 400 regionally. Own-brand products are an important lever for translating the METRO sustainability strategy directly into products.