With manufacturers extending product lines and churning out new product after new product to find the new trend consumers will embrace, the number of products in stores has increased dramatically in the past few years.  This proliferation of new products has resulted in increased costs for both the manufacturer and retailer.  In addition, it has had the added effect, in some cases, of increasing consumer choice so much that the consumer has become overloaded, choosing not to choose. 

As a result, everyone (consumers, retailers and manufacturers) has an interest  in reducing the number of SKUs in-store.  Consumers may purchase more given a less overwhelming array of choice.  Further, retailers would benefit with a simplification of stocking and warehousing issues, while the operational issues associated with manufacturing would be simplified, thereby reducing costs.   SKU rationalization benefits all parties.

Our approach to SKU rationalization relies on our SimuShop method.  Shoppers are taken on a virtual shopping trip and tell us what they would purchase.  Given this approach, we can either help you identify strong candidates for removal from the category or evaluate how your existing plan might affect your sales or sales in the entire category.  We also have several approaches we use to identify product substitutability and how shoppers will respond to the discontinuation of a product they normally purchase.

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