Depth is measured by how many options are offered for each distinct product, i.e. sizes, colors, other variations. Variety has to do with the range of distinct products offered—otherwise referred to as breadth.
Assortments can be strategized to be enterprise-wide, or localized, or anywhere in between. Quality has an effect, as does variety and consistency, on the successfulness of an assortment’s ability to meet customer needs. All of these constantly changing factors can be hard to keep track of.
Let's use an old favorite as an example - peanut butter. This is a product category that seems like it would be fairly straightforward due to its relatively low variety. However, when you go to the grocery store in search of peanut butter, you see a large variety and depth of product choice. Peanut butter today comes in different sized jars and serving mechanisms, different flavors, varying degrees of healthiness and is offered by many different brands. Some are cheap and some cost more, but you can guarantee you’ll find one you are interested in. Chances are you didn’t even know you were looking for something specific. It is just peanut butter after all.
When considering this same predicament for something more complicated, like clothes, shoes, or accessories, the solution is even less obvious. There are incredibly more alternatives in this situation as well as more variety among competing products and retailers. Navigating the customer’s mind to find what they actually want would be almost impossible. But you need to know this information regardless. You need to know how many colors of a particular cardigan you should carry in which stores. You need to know how many different fits of pant are appropriate. These decisions are essential to your business. You want to make sure you have something for everyone, but how do you know what that really is?
Product assortment strategies don't happen in a vacuum. These strategies and decisions are based on historical demand from the market, buying trends, and expected choices made by customers. But how can you as a retailer know what the true demand for an item is? When a customer buys a jar of peanut butter they are making a choice. A choice that rejects the other options, resulting in a clear choice - or preference. This is a firm demonstration of demand, impacting many other products and utimately your merchandise plan. Digging deeper, these choices differ across distribution channels, product features/styles, as well as geographic locations. There is a surprising amount to learn from this information that has a direct impact on how you should treat your assortment strategy.