SKU Rationalization: Keep Your Brand Off the Chopping Block

SKU Rationalization: Keep Your Brand Off the Chopping Block
2 min read time

Getting your brand onto retail shelves can be an uphill battle for many – market competition is fierce, and people have more options than ever before. So, once your brand finally makes it into its ideal retail outlet, how can you ensure that it stays there?

SKU rationalization, or range rationalization, is a common exercise employed by retailers where they try to eliminate less productive SKUs in favor of ones that might be more productive. This can be due to a variety of causes. Maybe they have too many brands that blend into each other and need to focus on others that offer more differentiation. Maybe the demand for a brand is erratic, undependable, or consistently below forecast. Maybe they already have too many brands on-hand and it’s creating a nightmare for internal operations and supply chain.

Great, you may be thinking – so how can I avoid being one of the products that gets cut?

The truth is, range rationalization is a normal thing. Part of a buyer’s job is to make brands feel like they’re never on solid ground. In order to make sure you get off the chopping block safe and sound, your brand should have a strong innovation pipeline in development.

What is an innovation pipeline?

An innovation pipeline is simply a set of new products at the ready to be launched. The products within your innovation pipeline must meet a new consumer need, be relevant to drive category value, and be something that is genuinely different to what’s being offered today.

Having an innovation pipeline is extremely important, as it shows the retail buyer that your brand is in touch with what people need and how their needs continue to change. More directly, having a new set of products ready to launch year on year ensures that when your brand’s products fall into a retailer’s “long tail” of SKUs with a slower rate of sale, you can easily delist them, launch new products, and either hold or grow your shelf space.

innovation pipelineInnovation pipelines can stretch across 2-3 years. Products aiming to launch in say, 2023, may only be a concept at this stage, whereas products launching in 2021 may already be getting ready for production.

A good innovation pipeline does the following:

  • Predicts changes in the category and develops products to meet those changes so they launch on time in the moment of need.
  • Deeply understands people’s needs, bringing additional benefits to the category that are proven to be needed but not yet available from your brand or your competition.
  • Creates a strong business case for your brand and an attractive opportunity for the retail buyer; enabling your brand to grow bigger, faster than the competition.

At proquo ai, our Brand Management platform gathers people’s feelings and thoughts on your brand every day, empowering you with the intelligence that you need to develop rock-solid innovation pipelines, develop growth strategies – or pivot, when you need to. Our LIVE Summary Dashboard provides you with the latest information on your brand, where it stands vs your competitors, and what people are saying about it. And we offer you AI-powered brand guidance so that you can become the best brand possible.

Want to learn more about optimizing your brand for retail stores? Check out our guide, “How to Craft a Killer Trade Story” to discover how to position your brand for success when presenting to retail buyers, investors, and more.

Download our Trade Story Guide

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