Are You Neglecting Your Product Assortment?

 
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You’d be surprised how many companies have a lot of “dead weight” in their product offering.

A few years ago I was working with a client with 200+ SKUs in the natural food category. As we were planning for a global rebrand, we also took this opportunity to review the product assortment to tighten it up in an effort to create a high performing product portfolio.

But editing an established product line up is often an uphill battle.

For many mid-sized companies, this often boils down to some form of attachment or fear. It’s hard to let go of products that the company has invested time and resources into over the years.

Sometimes it’s personal (i.e. founder-developed product) and sometimes it’s merely because it’s been there for so long that they don’t know what to do if that item were to be removed.

In other instances, the sales team may have fear of discontinuing SKUs as this can cause disruption with retail partners and buyers (and let’s not forget, customers). And while this is a valid challenge, it’s important to remember that EVERYONE wants strong performing products.

 

In some industries, like beauty, it is common to discontinue products after a few years in an effort to keep assortments manageable. I would argue that evaluating and editing your product assortment every 5 years (depending on how prolific your team is with product development) is a good business practice.

To put it simply, product assortment is directly and indirectly connected to your business performance in a multitude of ways:

  • Larger product assortment = increased costs (product development, production, marketing, etc)

  • Slow performing SKUs = drain internal sales and marketing resources

  • Low sales volume can take away precious “shelf space” whether it be brick & mortar or online

  • Weak SKUs can dilute brand positioning and customer perception

  • High performing SKUs = maximized resources and often can account for large percentages of your revenue

 

So next time you catch yourself not feeling thrilled about how your company’s products are performing, take a moment to review your sales and embrace change.

Not only is it manageable – it’s important for your assortment to stay relevant as your customer needs and the market changes.

 
c okubo