Less is More if You Assort it Right
Fast-paced lifestyles have reduced the number of times shoppers make trips for everyday shopping needs. Today, 80% of UAE and KSA shoppers prefer to shop in-store just once a fortnight or once a month. This translates to fewer chances for retailers and manufacturers to capture shoppers’ attention as they stroll the aisles.
On the other hand, store shelves have never had more products. Yet despite the abundance of product assortment offered within a category, only a small portion actually drives category volume sales. In many countries, more than 50% of the SKUs contribute to less than 2% of fast-moving consumer goods (FMCG) sales. This leads to the question: Do we really need that many SKUs?
Many sales leaders believe that increasing the number of SKUs within a portfolio can help boost sales. Research, however, shows that there is absolutely no correlation between change in assortment size and a change in volume, which means that adding SKUs does not necessarily translate into sales increase.
There is, however, a direct correlation between assortment size and out-of-stock of a particular brand: The more SKUs a manufacturer has, the more chances the manufacturer has in creating an out-of-stock situation, which negatively affects brand sales and perceptions.
Our Assortment Optimization report explores assortment trends across top FMCG manufacturers and the impact on the market in 2018: factors leading to and resulting from assortment inefficiencies as well as how best to approach the planning of assortment offering to get maximum returns.
Download white paper to learn more about the key steps to creating a successful assortment optimization strategy.