Use Case: Optimizing Assortment for Maximized Revenue and Minimized Churn
In the dynamic retail landscape, assortment planning challenges Consumer Packaged Goods (CPG) manufacturers and retailers alike. Traditional assortment planning tools cannot often provide granular, store-level insights, making it challenging to maximize revenue without increasing SKU churn. This use case outlines how HIVERY Curate can be leveraged to maximize revenue and minimize SKU churn at a hyper-local level, enabling precise assortment decisions that align with brand and retailer goals.
- To maximize revenue by optimizing SKU assortment across retail stores.
- Maintaining or reducing SKU churn to below 5% ensures operational efficiency.
- To provide actionable, store-level insights for assortment planning.
- To simulate and validate multiple assortment strategies under real-world constraints.
- To align the optimized assortment with both manufacturer and retailer objectives.
- Historical sales data for each SKU at a store level for the last 12-24 months.
- Current SKU list and their respective attributes (e.g., price, size, category).
- Store attributes such as location, size, merchandising styles and fixtures
- Planogram configurations and shelf space constraints.
- Data Integration: Integrate all the required data sets into HIVERY Curate's AI-driven platform.
- Initial Analysis: Run an initial analysis to understand the current state of SKU performance and churn rates.
- Scenario Planning: Create multiple assortment scenarios to evaluate strategies that aim at revenue maximization and churn minimization.
- Simulation and Validation: Use HIVERY Curate's simulation capabilities to validate each scenario under real-world constraints.
- Store-Level Insights: Generate store-specific recommendations for SKU assortment.
- Stakeholder Alignment: Share insights and recommendations with key stakeholders for alignment.
- Implementation: Roll out the optimized assortment plan across stores, keeping track of any changes made in the planogram configurations.
- Monitoring and Feedback: Continuously monitor performance and adjust strategies as needed.
Key Performance Indicators (KPIs):
- Percentage increase in overall revenue
- SKU churn rate
- Store-level compliance rate for new assortment plans
- Operational efficiency metrics such as Days of Supply (DOS)
- An increase in overall revenue through precise, data-backed assortment planning.
- A churn rate maintained at or below 5%, ensuring minimal disruption in operational efficiency.
- Enhanced collaborative relationships between CPG manufacturers and retailers through data-driven, mutually beneficial decisions.
Risks and Mitigation:
- Data Quality: Poor data quality could affect the accuracy of the model. Ensure data is cleaned and validated before integration.
- Stakeholder Resistance: There may be resistance from retailers or internal teams to adopt new assortment strategies. Effective communication and demonstrating quick wins can alleviate these concerns.
By leveraging HIVERY Curate, retailers, and CPG manufacturers can navigate the complexities of assortment planning with ease and precision. This results in maximized revenue, minimized churn, and strategies that align with retailer and brand objectives.
Experience the power of HIVERY Curate for yourself. Request a demo today and discover how HIVERY Curate can revolutionize your role, whether you're in Revenue Management, Analytics, or a Revenue specialist.
Related resources you might be interested in:
- Category Growth Strategies Through Better Strategic Questions
- Discovering 'Sleeper Stores': How AI is Redefining Retail Insights and Shaping Buying Behaviors
- Interactive Assortment Planning: Using AI-Driven Visual Insights to Make Difficult Decisions
- Can you find individual stores that are worth going to store-specific assortments? AI can