Tesco’s ongoing Project Reset may have placed the spotlight firmly on retailers’ ranging decisions, but the tricky question of which lines to cut and which to keep isn’t new. During my time at Sainsbury’s it was a question I confronted daily.
Buyers are used to rapid turnover - a significant proportion of NPD is cut within 12 weeks of appearing on the shelf. We track around 30,000 new launches each year. Of those, only 16% will reach annual sales of £1 million - just 3% will go on to achieve £5 million. So how do retailers go about deciding what needs to go?
The starting point has to be the number of units sold - sales figures are a part of the picture no retailer can afford to ignore. But the kneejerk removal of a product based purely on low sales demonstrates a failure to understand how people actually shop.
Retailers need to think about who chooses the product in question - do people buy it once, then never again? Or does it have a small but loyal cohort of repeat purchasers? If the latter is the case, think about the product’s USP. Will your range be lacking if you remove it, or do you have an acceptable substitute?
This may make rationalising product lines without losing customers seem an impossible task. That is certainly not the case - a process which demands such rigorous reappraisal can only be a worthwhile exercise, and should actually improve the quality of what’s offered to shoppers.
It’s simply important to fully understand the big picture implications of delisting a product before you end up accidentally turning customers away. Keep the products which provide points of differentiation - items which set you apart and define your offer in the eyes of the consumer.
Retaining a wide variety should be the focus only in categories where consumers are looking to save time or treat themselves (since NPD tends to do well there), or when there is genuinely an extensive set of consumer needs to cater for.
Appreciation of these nuances is vital as retailers look to retain only the products that will drive footfall to their stores.
Kirstin Knight is retail director at Kantar Worldpanel and formerly head of own-brand marketing at Sainsbury’s
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