An eclectic product mix can be a double-edged sword

Discount Store News, Nov 17, 1997 by Tony Lisanti

The addition of opportunistic merchandise categories to a retailer's existing product mix can be interpreted in two ways.

On the one hand, a retailer can be praised for adding a niche business that extends the franchise, garners consumer excitement and generates incremental sales and profits. On the other hand, a retailer can be criticized for adding a product line because it doesn't fit into the merchandise mix, causes confusion among consumers and perhaps shows a sign of weakness or a desperate attempt to boost traffic and sales.

Certainly, both scenarios describe some of the recent examples of retailers jumping into new merchandise categories. Their attempts to boost traffic have resulted in some natural extensions as well as some odd offerings. Consider the following:

* Ames. Testing frozen pizzas. A frozen pizza to go with that ball of yarn?

* Best Buy. Adding books, magazines, and fitness equipment. A Sidney Sheldon novel to go with your home theater system?

* Home Depot. Adding more soft home products. A comforter to go with that buzz saw?

* Nobody Beats the Wiz. Adding white goods and appliances. A washer/dryer to go with that car stereo?

* OfficeMax. Adding dozens of business travel items including luggage. A suitcase to go with that ream of copy paper?

* T.J. Maxx. Expanding gift items and gourmet foods. A little balsamic vinegar to go with your designer sweater?

* The Big Three. Wal-Mart, Kmart and Target are adding more items to the basic bread, cakes, eggs, milk and juice assortments in their traditional discount stores.

* Wal-Mart. Adding gasoline stations, hearing centers and contemplating the idea of adding general doctor examination services. A complete check-up for you and your car?

Or how about a car to transport your purchases home? In fact, someday retailers may even be selling cars. At least that's the plan of Japanese conglomerate Daewoo, which will begin marketing three models of cars in the United States next spring, not through dealerships, but through traditional retail channels.

Many retailers describe merchandising as a very sophisticated complex business, but in reality, maybe it's just as simple as it was in the early days of discounting.

Let's face it, 25 years ago, the late Sam Walton stacked watermelons in front of the store, offered donkey rides and added products at his discretion to attract customers. And it worked!

Maybe it's time to put less emphasis on the technology, the research and the numbers, and rely more on the basic judgment of a savvy merchant. Maybe solid merchandising isn't as sophisticated or as complex as so many retailers make it out to be.

Ideally, a retailer should carefully analyze the addition of a merchandise category and not quickly jump into a trendy category for a quick sales fix. But in today's competitive marketplace, the reality is that most retailers have to roll the dice and try almost anything just to keep the register ringing.