Range Optimisation & SKU Rationalisation
Working with a premium high street greeting cards and stationery retailer to improve their optimal product range.
To discuss how we can help you with similar challenges, please contact Jeremy Smith.
The Problem
- As a result of frequent range changes and lack of clear exit policy, the retailer had a long tail of items across all product categories.
- The 4C team was tasked with removing at least 50% of the range and suggesting an optimal range to drive sales and margin, as well as improve availability of core lines.
The Solution
- We analysed the performance of each SKU within individual categories, stripped the product ranges down and then built them back up using a ‘bottom up’ approach.
- Concurrently we benchmarked the incumbent ranges with key competitors and highlighted areas where the business was over or under ranged in terms of product options and brands volume.
- Using this insight, a proposal was made for the optimal number of SKUs within each product category to maximise sales and margin.
The Impact
- The in-depth review led to over 8,000 SKUs being flagged for deletion from future ranging, improving future sales and margins without negatively impacting the customer.
- Subsequently COGs were reduced as a result of higher volume.
- The smaller range led to continuous operational benefits in terms of ordering, stock holding, visual merchandising and ultimately an enhanced shopping experience for customers in-store.