Why An Edge Assortment Strategy Matters To Retailers
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Edge Assortment Strategy: From innovation to different pack sizes

August 21, 2023 | By HIVERY

In the dynamic landscape of retail, where trends shift like quicksand and consumer preferences evolve in the blink of an eye, one challenge remains constant for Consumer Packaged Goods (CPG) businesses - finding the perfect assortment that not only caters to diverse consumer demands but also drives substantial revenue growth. Enter the era of Edge assortments powered by the horsepower of Artificial Intelligence (AI). Let's delve into how AI transforms the game and learn why an Edge assortment strategy can unearth new hidden value while maintaining operational and in-store execution efficiency.

What is the Edge Assortment Strategy?

Before we begin, let's define the "Edge assortment strategy." It refers to a strategic selection of products that lie at the periphery of traditional or core assortment plans. These can be innovations or different pack size formats of the same brand. These assortments are characterized by their ability to impact business outcomes, often outperforming standard assortment choices significantly. Edge assortments are identified through advanced analytical techniques, such as machine learning models used by HIVERY Curate, which sift through extensive data to uncover hidden trends, consumer preferences, and market opportunities that conventional assortment planning approaches might overlook. Contrary to a complete overhaul of the assortment plan, edge assortments pinpoint a limited number—typically just 5 or 10—of products within a larger store-specific assortment (which may encompass up to 600 items). When strategically positioned, these select items have the potential to deliver noteworthy revenue gains, enhanced consumer satisfaction, and a distinctive competitive edge, thereby augmenting the overall effectiveness of a retailer's product offerings.

Spotlighting the Hidden Gems

CPG customers are no strangers to assortment planning. Having navigated the intricate paths of product selection for years, they've honed their instincts in identifying trends and predicting winners. Yet, even the most experienced assortment planner acknowledges that some gems remain buried beneath the surface. Here, AI flexes its analytical muscles, scouring vast datasets and extracting insights that might have eluded traditional approaches.

Consider this: AI-powered tools, armed with the prowess to sift through copious data, can highlight those outlier items that, while seemingly insignificant in number, can potentially create a monumental impact on the bottom line. Imagine discovering just a handful of items per store that, when strategically placed, unlock untapped value, driving significant revenue gains. These hidden champions might otherwise have been lost amidst the sea of conventional assortment choices.

Empowering Proactive Decision-Making

The power of AI doesn't stop at uncovering edge assortments. It extends into scenario exploration, granting assortment planners the freedom to imagine and experiment without the constraints of guidelines or merchandising rules. This avant-garde approach allows for creating scenarios where potential opportunities can be assessed and visualized in their unadulterated form sans any preconceived limitations.

The magic happens when these scenarios are subsequently overlaid with retailer-specific constraints. This incremental approach enables assortment planners to witness the potential outcomes of various decision paths and proactively sell those assortments to retailers, ensuring that the crucial moments of decision-making are well-informed and optimized.

Unlocking the "Trailing Analysis"

AI's impact doesn't end when assortments hit the shelves. The "trailing analysis" concept emerges as a tool for fine-tuning future assortments. Imagine capturing the essence of a perfect assortment, complete with merchandising rules and constraints, and then comparing it against the assortment that ultimately finds its place in stores. This comparative analysis reveals the nuances of the retail buyer's choices, shedding light on the deviations between theoretical perfection and practical execution.

This analysis informs strategy and fuels transparency in interactions between CPG suppliers and retailers. This wealth of data becomes the foundation for insightful discussions in product line reviews and joint business planning sessions. Armed with insights about what worked and what didn't, both parties can collaboratively adapt and innovate, thereby nurturing a symbiotic relationship that drives success.

In the race to secure the edge assortments that matter, AI has proven to be the secret weapon in the arsenal of modern assortment planners. Its ability to reveal hidden opportunities, foster proactive decision-making, and facilitate nuanced analysis has ushered in a new era of assortment planning that marries the art of intuition with the science of data. As CPG businesses continue to harness AI's potential, the retail landscape will undoubtedly witness the emergence of assortments that stand out and make a lasting difference.

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