SKU rationalization remains an untapped lever. There are many instances where companies have rationalized products only to bring them back and more. The failure rate of SKU rationalization is due to the lack of quantitative analysis on the item affinities on low volume sellers.
As SKU management is getting a lot of attention, there is need for robust solutions based on real customer buying behavior, to help companies maintain their SKUs on an continuous basis. The value is high sales, higher margins and improved customer service
Understanding the product relationships in the market basket is key to driving up the order size or basket size. The results from this case study showed that adding one more item to 10% of the baskets can increase sales by 5%.
In today’s post, we talk to Mark Gottfredson about product complexity and customer choice.
Emcien: It’s natural for companies to add products and features to keep customers happy. What are the downfalls?
MG: The challenge of adding complexity is it’s the most natural thing in the world. Marketing comes up with new ideas for products or configurations [...]
In any manufacturing company that builds configurable products, there is a lot of discussion around what product complexity is. What’s interesting is that when times are good and there are lots of sales, the discussion is usually around how to simplify or streamline with the goal to sell more product even faster, that complexity is [...]
