What constitutes "good" inventory?

Is "good" inventory a lot of things to sell? In a marketplace context, we often speak of one platform having better inventory than the other. Please correct me if I'm wrong, but this is often a statement that comes out of an inside-out view. Let me try and explain. 

My usual method to feel the elephant in the room, regular readers know by now, is to ask questions. So, when we say a platform has good inventory, do the customers also say that? Is buyer-feedback good enough on this topic or is non-buyer feedback equally if-not-more important? Let's take an example of shirts. If you have a million shirts and none in my size, do you have good inventory? If you have a million in my size but none that I like? What if you have a thousand that I like in my size and like the ones I like, and I'm not able to find them using your search and browse? What if I find what I need but I don't like the price or terms of delivery? Feel the elephant? Isn't it bigger than we imagined? The end of all these paths is no sale. 

But like they say, no two silences are the same since both could be the absence of a different word.

Let's get the basics out of the way. Having a lot of products to sell, on the shelves, is not a guarantee to a perception of good inventory. Second basic, the perception we just mentioned, is reality. There is no other sense of 'good' or 'bad' inventory. Third, all enablers we keep worrying about - having the right sellers or suppliers on-board, getting them to list everything they can - are all just that - enablers, and the customer doesn't think of those as inventory. 

Consumer in, the first thing to build would be Demand. If the consumer doesn't want it, or is not aware that the category exists on your platform, why even bother? The second could be findability. Through browse or search, the consumer must be able to find or discover the product. The third bit could be decision-tools if needed (spec-compare, shade-match, size-converter etc) along with the completeness of range (could mean SKU coverage for standard cataloged products and width otherwise). Then there is the catalog itself, or listing quality if the category is uncatalogued - often a stumbling block for marketplaces. And the picture still isn't complete without the all-important wrappers of price, payment and delivery terms. If all matches, and these don't, it is still, after all the effort, not a sale. 

Before we link a perception of bad inventory to bad sourcing, therefore, we should check for where the funnel is broken. It is possible for customers to, rightfully, feel you have bad inventory for more reasons than that. 

How much Variety is good?

a) a lot?

b) sufficient / enough?
c) too much?
d) any other_____?

It is not as simple as it looks. Sometimes I'm in a hurry and I just want to go right to the counter and pick up my stuff, sometimes I have the time to wallow. That's just me. Sometimes I feel a store isn't even credible if it doesn't have five brands of shirts, and sometimes I get annoyed when the salesperson 'encourages' me to try just one more brand. Imagine being led through a thousand shirt-options, to be told in the end it's not available in your size!! Extremely non-funny, this.

So it is complex, and all this while it's still me. There are other kinds on the planet with their own preferences. Mars and Venus, I  hear, are different. Mission-shopping and Impulse-Shopping is different. Routine and Occasional shopping is different. Variety could satiate or irritate. So is it that complex or are we looking through the wrong lenses?

Maybe yes. What the consumer looks for is availability, when it is mission-shopping and assortment, when impulse-shopping. Variety is the backend lever that leads to availability and assortment. A good retailers knows it is not wise to put your entire assortment on the shelf. I was chatting with an experienced retail CXO recently and he told me about this very interesting incident. Their shoppers complained of low variety, while their SKU count was actually higher than competition. After a drastic reduction in SKU-count, the customers turned around and said now you have variety. Counter-intuitive? Maybe not.

Maybe what gets articulated or captured as variety is simply the ability to find or discover your product.

Don't get me wrong - again - I'm not saying variety is bad, and I'm not saying the buyer wants only one choice (aside - views from Google might be interesting, I really want to know who the search engine impresses with the total number of results and time, and I really want to know how many ever clicked the "I'm feeling lucky" button).

But if we are on the same page, implications are many-fold for retailers and marketplaces. When one is creating the initial assortment, variety adds to the experience and lends credibility. Beyond a point, it could add to confusion. This is super-critical in the online world, where one might feel real estate is free or unlimited, while it is actually not. The first-fold of the homepage is not unlimited space. More important, the buyer's ability to process information and his / her patience is always limited. It could be cool to say I have 247,000 results for your search, but unless we guide the buyer to what (s)he wants or needs, it's just noise. The buyer knows 246,999 out of these results are not what (s)he's looking for, and maybe we're giving him / her more and more of what (s)he's not looking for.

The two broad approaches could be either to curate via a Tailored Shopping Experience (i.e. we as store-owners decide / guess what you need, and show you only that one item you most-probably want, not the endless variety it takes to ensure we find a match) or via decision-aiding tools. Give the user a set of check-boxes and sliders to reduce the 247,000 to just 4 items (s)he can now compare on key attributes.

In a retail store, they lay out some key designs of shoes, in some sizes, in a way that looks most welcoming and least threatening. It will be scary if every size in every design is laid out on a table. You probably realize that's how good offline sales-people work. They just ask the buyer a few initial questions, narrow their eyes, lean back slightly and say, "I think I know what you're looking for", smile, and pull out four shoes you love.

Image courtesy: wallpaperscraft.com