Assortment

Brief

Aecommerce firm in APAC used our analytics services for assortment planning

Challenge

As brands/ products were continuously evolving, our client’s the SKU range was growing and it was important to decide which ones to keep and ones to discard to meet the client stated business objective –improved margins and reduce stock-outs, burden on the supply chain and customer complaints.

Though ecommerce can have relatively larger shelf space than the brick and mortar store but still it was important to rationalise large set of SKUs –to reduce the strain on the supply chain network and have those products which are in alignment with the

Our Action

• Collected and cleaned 3 years historical data related to sales volume,revenue, margins, customer geography and demographics; product – depth and width, supplier & inventory
• Analysis of SKUs performance, correlation & cannibalization was carried out using advanced statistics tools to get deeper perspective
• Further, a multivariate regression model helped in analysing the impact of changes in the assortment on the sales number
• Categorization of SKUs in high performing SKU/ Low performing SKU based on business objective set by our client

Results

• Profit margin projected growth was 0.5 -1% based on rationalised assortment mix
• The expected reduction in the inventory stock-outs was close to 15% - which could lead to more satisfied customer
• With rationalised SKUs- the customer care cost reduced due to lower confusions and less number of SKUs