Assortment Strategies for Australian Retailers in 2025

In 2025, Australian retailers face a rapidly changing landscape. From supply chain disruptions to evolving consumer expectations, the pressure is on to get product selection right. Enter the era of sophisticated assortment strategies—where data, technology, and customer insight converge to drive profit and loyalty like never before.

What Are Assortment Strategies?

Assortment strategies involve deciding which products to stock, how many variants to offer, and how deep to go into each category. For Australian retailers, it’s about striking the perfect balance: too much choice can overwhelm shoppers and tie up cash flow, while too little risks lost sales and disappointed customers.

In 2025, the mix is increasingly curated using advanced analytics, AI-driven demand forecasting, and a laser focus on localised consumer behaviour. Today’s leaders know it’s not about offering everything—it’s about offering the right things, in the right places, at the right time.

2025 Trends: How Retailers Are Rethinking Their Assortments

• Hyper-Localisation: Chains like Coles and Woolworths are leveraging store-level data to tailor product ranges to each neighbourhood. For instance, a store in Sydney’s Inner West might feature more plant-based options and specialty imports, while a regional store focuses on staples and bulk buys.

• AI-Powered Forecasting: Retailers are using machine learning to predict trends and adjust assortments in real time. In 2025, AI tools help identify emerging categories—such as sustainable packaging or wellness supplements—before competitors catch on.

• Omnichannel Integration: As online and in-store shopping continue to blur, successful retailers align their digital and physical assortments. Click-and-collect, endless aisle kiosks, and real-time inventory visibility mean customers can get what they want, however they shop.

Consider Kmart’s recent rollout of dynamic shelf allocation, which uses sales data and shopper heatmaps to reallocate shelf space weekly, maximising high-turnover items and reducing markdowns.

Financial Impacts: Why the Right Assortment Matters

Getting assortment strategy right isn’t just about customer satisfaction—it’s a direct driver of the bottom line. Here’s how:

• Inventory Efficiency: Leaner, smarter assortments reduce excess stock and free up working capital, crucial in a high interest rate environment.

• Higher Margins: By prioritising high-margin or exclusive products, retailers can boost profitability without raising prices across the board.

• Reduced Discounting: Fewer slow sellers mean fewer markdowns, protecting both margin and brand perception.

According to the Australian Retailers Association’s 2025 outlook, stores adopting advanced assortment planning saw inventory turnover improve by up to 15%, and customer retention rise by nearly 10% year-on-year.

Building Your 2025 Assortment Strategy: Key Steps

• Leverage Data Analytics: Invest in tools that analyse sales patterns, seasonal demand, and customer feedback. Use these insights to inform product selection and depth.

• Stay Nimble: Shorten your planning cycles. Quarterly or even monthly assortment reviews allow for rapid response to shifting trends or supply chain shocks.

• Partner with Suppliers: Collaborate closely with key brands for exclusive lines, limited editions, or flexible supply terms. This can differentiate your offer and mitigate risk.

• Focus on Local Relevance: Don’t treat all stores the same—tailor assortments to reflect local tastes and demographics, using geo-targeted promotions and feedback loops.

Woolworths’ 2025 ‘Local Favourites’ initiative, for example, sources community-chosen products for select stores, deepening ties with customers and boosting basket size.

The Future: From Assortment to Experience

In the ultra-competitive retail environment of 2025, assortment strategy is no longer a back-office function—it’s a core part of the customer experience. The most successful brands treat their product mix as a living, breathing asset, constantly evolving to reflect trends, feedback, and real-time data.

Whether you’re a boutique, a supermarket, or an online-only player, the message is clear: a smarter assortment strategy delivers financial resilience, customer loyalty, and a sharper competitive edge.