Our client, a major food manufacturer, was having issues with a lack of space on the shelf in their key refrigerated category, due to an increase in SKU density.
Essentially, retailers were rapidly growing their category by adding more SKUs without actually adding any additional space to the shelf. Thus, the best selling products within the category were frequently out-of-stock and the shelf was then dominated by the lower selling SKUs. This led to a perceived increase in shopper confusion, which was starting to impact overall brand and category dollars.
InContext Solutions recommended using ShopperMX™Indicators for this client, to help determine the optimal amount of SKUs on the shelf within the category. Six different SKU amounts were tested against the current planogram configuration:
The Indicator Included:
Current POG (Control)
+15% Additional SKUs
+10% Additional SKUs
+5% Additional SKUs
-5% Current SKUs
-10% Current SKUs
Determine the optimal number of SKUs for the refrigerated category with the goal of growing or maintaining sales and increasing overall shopability for the category.
Key Findings & Results
Analyzing the results of all six indicator tests showed that reducing SKU count by 5% drove the highest category performance as well as the highest shopper affinity/preference. Maintaining or increasing the amount of SKUs on the shelf actually proved to hurt the brand performance and category overall.
By conducting a ShopperMX™ Indicators, our client saved significant costs and time as they were able to quickly share results with key retail partners. In turn, their partners were very receptive to the information and used the client's recommendation to more efficiently add more holding power on their best selling items. The ShopperMX™ Indicators and subsequent recommendation helped both the retailer and manufacturer reduce out-of-stocks (more facings on key SKUs) and shrink (by removal of slower moving SKUs).