Merchandise Mix Optimization

Most FMCG brands think their hero product is simply their biggest-selling SKU. That’s not how retailers like Walmart think. Walmart merchants don’t just evaluate products based on: * volume * margin * velocity They evaluate products based on how products influence: * shopper perception * basket size * store traffic * category growth * supply chain efficiency * digital conversion * overall value image This is where “hero products” become strategically critical in Revenue Growth Management (RGM) and Price Pack Architecture (PPA). A hero SKU is the product that disproportionately shapes shopper behavior. It becomes: * the price benchmark * the basket anchor * the retailer traffic driver * the mental reference point for value Think about categories like: * eggs * detergent * diapers * bottled water * soda * paper towels Shoppers remember these prices. If Walmart wins on those hero SKUs, shoppers often assume: “Everything else is competitively priced.” That perception drives billions in retail behavior. What’s fascinating is that the hero SKU is not always the highest-margin item. Sometimes Walmart intentionally protects pricing on certain hero products because the total basket economics matter more than the individual SKU margin. And today, hero products are evolving rapidly. The in-store hero SKU may not be the digital hero SKU. On Walmart.com, hero products are increasingly influenced by: * search ranking * ratings & reviews * subscription behavior * delivery speed * digital shelf visibility * image quality * conversion performance This creates massive new challenges for FMCG RGM teams. The winning assortment strategy is no longer: “What sells the most?” It’s: “What product best drives the total ecosystem?” That includes: * category growth * retailer profitability * shopper loyalty * basket attachment * omnichannel conversion * premiumization opportunities This is where conjoint research becomes incredibly powerful. Historical scanner data explains what happened yesterday. Conjoint helps teams simulate: * future shopper behavior * price elasticity shifts * pack architecture changes * assortment optimization * promotional mechanics * retailer-specific reactions * digital shelf trade-offs * premiumization opportunities Most importantly, conjoint helps identify: * which SKU SHOULD become the hero product * which SKU recruits new shoppers * which SKU improves retailer economics * which SKU drives larger baskets * which SKU protects value perception * which SKU unlocks profitable growth Because the future hero SKU is not always obvious from historical data alone. A smaller pack may recruit more households. A premium pack may increase margin without hurting penetration. A retailer-exclusive bundle may dramatically improve conversion. A digitally optimized SKU may outperform the traditional shelf leader. The future winners in RGM will be the teams that understand: The hero product is no longer just a product. It’s a strategic growth lever powered by shopper understanding, retailer strategy, and predictive conjoint insights.

📦 SKU Proliferation **More options ≠ more sales.** As Category Managers, we’ve all felt the pressure to expand assortments—more flavors, colors, sizes. But this pursuit of choice often backfires: 🎯 Demand gets diluted across too many products 📉 Forecasting accuracy drops 🏭 Production complexity increases 🛑 Higher chances of stockouts AND overstocks 💸 Inventory holding costs shoot up ⚠️ The Reality Check: Imagine scaling from **3 chopping boards to 12**. Suddenly: • 12x forecasts • 12x shelf spaces • 12x packaging/logistics setups …while 80% of sales come from just 2 core SKUs. Result: Excess inventory, wasted capital, confused shoppers. 🚀 The Fix? **Strategic SKU Rationalization:** ✔️ Ruthlessly cut low performers (ABC analysis is key) ✔️ Collaborate with Supply Chain & Sales teams ✔️ Empower store feedback—they know what sells ✔️ Optimize shelf space for clarity, not clutter ✔️ Focus on *quality* of assortment, not quantity #### 📌 Remember: **Winning supply chains aren’t defined by SKU count—but by knowing what *not* to carry.** #CategoryManagement #SKURationalization #RetailStrategy #SupplyChainOptimization #InventoryManagement

Here’s something kinda interesting I found recently 👇 Amazon usually sorts your listing variations alphabetically, not by conversion rate or popularity. So your best-selling color or size might actually be buried halfway down the list. By slightly tweaking the variation names, you can push your best converters to the top. For example, adding a simple prefix (like a space, symbol, or number) to the variation name can make it appear first in the list, which often makes it the default selection. When you think about it, the first variation is what most shoppers click by default. So variation order = conversion control. Here’s what I did: Pulled CVR by child ASIN to see which variations actually converted the best. Tweaked the names so my top performer sorted to the top. Left the rest alone. Result? A nice bump in conversion rate without touching price, copy, or images. Literally just reordered the variations. Kinda wild how something that simple can move the needle.

When creating SEO strategies for ASIN variations, the approach differs slightly from optimizing a single ASIN. 🧩 Why? Because variations open the door to getting more creative with backend keywords and alt text, allowing you to cast the widest possible net for indexing. 🤝 Here’s how: ▪️ 𝐁𝐚𝐜𝐤𝐞𝐧𝐝 𝐊𝐞𝐲𝐰𝐨𝐫𝐝𝐬: Each ASIN allows up to 250 characters for backend (generic) keywords. For a single ASIN, you’re capped at 250 characters. But with 10 variations, you could use up to 2,500 characters by using different keywords across each variation. ▫️ Include core keywords across all ASINs, but use this opportunity to diversify with related terms, misspellings, and other relevant keywords to maximize character usage. ▪️ 𝐀𝐥𝐭 𝐓𝐞𝐱𝐭: Apply the same concept to alt text in A+ Content. You can assign different alt text sets to each child ASIN, further increasing the total volume of indexed keywords. The goal? 🤔 To index for more keywords, improve rankings, and drive greater relevancy. Over time, this translates into increased organic sales—the most profitable kind of sales on Amazon. This strategy requires thoughtful execution, but the payoff is worth it. Are you using this approach for your ASIN variations? Let me know your thoughts! 🫵 #Amazon #ecommerce #digitaladvertising #SEO #ecommercegrowth

Because inventory causes exponential pain with multiple warehouses... This infographics shows how to manage inventory in this context: ➡️ Centralize Inventory Visibility ↳ Issue: not knowing inventory levels across locations can lead to overstock in one warehouse and stockouts in another ↳ Action: Implement an inventory management system/ ERP that shows real-time inventory positions for all warehouses in one snapshot ➡️ Classify Products and Prioritize ↳ Why: Not all SKUs deserve the same treatment; some are high-value, others are seasonal ↳ Action: Use ABC analysis to rank products by focusing on A-items for tighter control ➡️ Define Replenishment Rules by Warehouse ↳ Why: Different warehouses cater to different regions or demand patterns. One-size-fits-all reorder points (ROP) won’t cut it ↳ Action: Tailor ROP, safety stock, and min-max levels by location. Consider lead times from central distribution centers or suppliers for each site ➡️ Breakdown Forecast by Warehouse ↳ Why: Each warehouse faces unique market dynamics ↳ Action: Generate warehouse-level forecasts, combining local sales trends with broader S&OP inputs ➡️ Plan Transfers Strategically ↳ Why: Sometimes it’s of lower cost or faster to transfer stock than reordering from suppliers ↳ Action: Set up a transfer framework; regularly review surplus vs. deficit at each location. Automate triggers for transfer orders when it’s cost-effective. ➡️ Monitor KPIs Proactively ↳ Why: Multi-warehouse complexity can hide inefficiencies when not tracking the right metrics ↳ Action: Track fill rate, inventory turnover, stock aging, and transfer costs at each site. ➡️ Plan Direct Dispatches & Save Costs ↳ Why: Dispatch directly from the plant to save logistics costs ↳ Action: Prepare daily dispatch plans targeting direct replenishment from the plant and use these warehouses for milk runs for distributors Any others to add?

Mastering Assortment Strategy in Retail: 8-Step Approach to Customer Delight The secret to retail success?  It's not just about having products, it's about having the right products for the right customers at the right price.  This is where a robust assortment strategy comes into play. Trying to summarize the assortment strategy through my 20+ years of retail and e-com experience. We will dive deep into how a retailer should tailor assortment to meet the needs of diverse customer cohorts.  This goes beyond simple demographics! 1. KYC (know your customer) - Customer Segmentation (Cohorts) : It can never be a one-size-fits-all strategy.  Analyse data to segment customers based on location (metro vs. tier 2/3 towns), demographics (age, gender, region), lifestyle (high-rise dwellers vs. independent houses), and even pincode-level analysis for e-commerce to deliver personalized experiences. 2. Value for Money (VFM):  Pricing is king! leverage EDLP (Every Day Low Prices), large pack savings, and strategic entry-level priced assortment (think 49/-, 99/- deals) to deliver exceptional value. 3. Seasonality & Festivals:  India's vibrant festivals and seasons are key drivers of demand.  Proactively plan relevant assortment well in advance, ensuring customers find exactly what they need when they need it – building trust and loyalty. 4. Brand Strategy:  A balanced portfolio is crucial.  Strategically incorporate national, challenger, and regional brands to offer diverse choices.  Regional brands, often offering incredible VFM, make an instant connection with the customers. 5. Private Label (PL) Power: In categories where branding is less crucial, private label products offer significant value, driving strong customer stickiness.  This is particularly evident in staples like pulses and dry fruits. 6. Evolving Trends:  The world of retail is constantly changing. monitor emerging trends, innovations & global selection through social media, market research, and supplier insights, ensure to include the latest and most sought-after products into assortment.  Be agile and adapt quickly! 7. Supply Chain Efficiency: Assortment strategy cant be just about marketing; it's about operational efficiency also. Carefully consider supply chain costs, warehousing, and logistics to ensure products are readily available. Availability is the Key 8. Continuous Improvement: Assortment planning is an ongoing process.  conduct quarterly reviews, analyzing velocity, profitability, and emerging trends to continuously optimize offerings.  Consider "assortment modules" for faster scaling and roll-out. This 8 step comprehensive approach will allow to offer a tailored shopping experience that truly resonates with diverse customer base. What are your key strategies for optimizing assortment? Share your insights in the comments! #retail #assortmentstrategy #supplychain #FMCG #ecommerce #merchandising #categorymanagement #omnichannel #indiaretail #valueformoney #privatelabel

More choices don’t always mean more sales. Here’s the balance that works. This isn’t just a theory. HBR and multiple consumer studies have shown the same pattern for years. The classic Columbia University jam study makes it clear: • One day they offered 24 flavors • Another day they offered just 6 → The smaller selection led to more purchases. That’s why getting your Amazon variations right matters so much. A good variation family makes browsing easier. A messy one does the opposite. To help with that, I’ve attached a full Amazon Variations Cheat Sheet. It breaks down what works, what causes problems, and how to structure variations so they lift your sales instead of dragging them down. Here are a few simple principles from it: 1. Keep variation families clean Don’t cram size, color, and style all into one giant parent. Split by the attributes that make the most sense for the shopper. 2. Make choosing easy Every extra dropdown or confusing combo increases the chance someone bounces. Put the most important attribute first and cut the clutter. 3. Lead with what sells If certain colors or sizes consistently win, highlight them. Make it easy for shoppers to land on your top performers. 4. Avoid unnecessary catalog changes Constantly merging, splitting, or updating UPCs can break your parentage and hurt ranking. Change things only when needed. 5. Review your data regularly If a variation setup isn’t converting, simplify it. Trim the unloved options and reduce noise. When you balance your options correctly, you make the buying decision easier, faster, and more satisfying for the shopper. P.S. Want practical guidance on how Amazon’s AI shift is changing listing visibility, discovery, and conversion? Explore the free AI Resource Hub here: 🔔 https://lnkd.in/gG8WMPhQ

Selling to U.S. Retailers? Understanding Store Segmentation Is Critical 🇺🇸🛒 For international manufacturers entering the U.S. market, here’s what often comes as a surprise 👉🏼your American retail partners don’t operate the same way across all their stores. Store segmentation means the same retailer will stock different products, brands, and SKUs depending on location—and this fundamentally changes your U.S. approach. 🔑 The U.S. Retail Reality 📊 American retailers segment stores based on demographics, geography, income levels, and local preferences. 🛍️ A Target in affluent suburban Connecticut carries different products than one in rural Texas. 🛒 A Safeway in a Hispanic LA neighborhood has a completely different assortment than one in Asian areas of San Francisco. This isn’t the exception—it’s standard for major U.S. retailers. ✅ What This Means for Manufacturers ⚠️ Your product won’t automatically go to all locations, even if a retailer agrees to carry it. Retailers make SKU-level decisions based on store segments: • Premium products may only go to affluent-area stores 💎 • Certain flavors assigned to specific demographic segments 🌶️ • Package sizes vary by urban/suburban/rural locations 📦 • Pricing strategies differ across store segments 💰 Real-World Implications 🌍 Volume expectations: Getting a “yes” from Walmart doesn’t mean nationwide distribution. Your initial placement might be limited to specific store segments for testing. Product development: Consider creating different SKU assortments for different U.S. segments rather than one universal product line. Marketing support: Retailers expect manufacturers to understand their segmentation strategy and provide targeted marketing materials for different store types. Supply chain complexity: You’ll need distribution capabilities that can handle varied order patterns across segments, not uniform shipments to all locations. How to Adapt Your Strategy 🧭 🔍 Understand how your target retailers segment their stores and which segments align best with your products. 👩🏻🎨Design your product portfolio with segmentation in mind. Offer retailers options they can deploy strategically across their store base. 📍Success in the U.S. often means customizing products for regional tastes, whether that’s flavors, package sizes, or formulations. 🤝Work closely with category managers who understand segmentation and can champion your products for the right store segments. The Opportunity 🚀 While store segmentation adds complexity, it creates opportunity. Manufacturers who embrace this reality can position products strategically and build sustainable growth across America’s diverse markets. The U.S. market isn’t one opportunity—it’s many. Store segmentation is how retailers navigate complexity, and understanding it is how you win. 🏆 #Manufacturing #USMarketEntry #CPG #RetailStrategy #InternationalBusiness #StoreSegmentation #SupplyChain HRS Global LLC

Amazon Now Shows Multiple Child ASINs in the Same Search Results Amazon has updated its search algorithm to favor brands with strong variation families. Now, multiple child ASINs from the same parent listing appear together in search results, enhancing visibility. Brands are noticing two to three product variants appearing side by side on Page 1 for related keywords, aligning variation depth with shopper demand. Key Takeaways: - Dominance in Search Results: One parent listing can showcase multiple child ASINs, enhancing visibility for a keyword. - Algorithm-Based Exposure: Amazon prioritizes variations that align with current search trends. - Enhanced Variation Optimization: Attributes, reviews, and conversion rates are crucial in highlighting child ASINs. - Competitive Edge: Well-structured variation families can gain Page 1 visibility without extra ad spend. In summary, Amazon’s logic for displaying search results has become more sophisticated. It’s no longer just one variation per keyword; now it’s about the best-performing combination of your catalog, enhanced by real-time demand. If you want to stay informed about important Amazon updates and get more insights like this every week, subscribe to my Amazon Weekly Newsletter here: https://lnkd.in/e2k6AHwR

Fewer products. Better products. That’s how you build a stronger, more profitable brand. As you know - the industry is struggling. Many brands are doing really badly right now - losing sales, losing customers, losing factories, losing trust. So a lot of brands that we talk to think the solution to GROWTH is to add more stuff. More styles. More colors. More options. More drops. More products “just to be safe.” NOOOOO!!! That’s totally the wrong strategy. What you need is to nail your priorities and FOCUS. You AND your customers need CLARIY! - Clarity to understand why they need to pick you over others - Clarity to understand your offer. - Clarity to “get” your products and clearly understand which outfit and products they should buy from you. That’s why the actual assortment logic is crazy important right now. In a tighter saturated market, with slow growth and maximum pressure on margins, weak collections are exposed really really fast. You can’t just keep piling on products and hope volume will save you. - You need fewer products. - Better products. - Products with a clear role in the collection. - Products that deserve to be there and have a strong unique selling point. - Products that either drive the business now or help build where the business needs to go next. - Not nonsense stuff. - Not dupes that you saw your competitor drop last year and now you have it too. - Not ten versions of the same average idea. (like a brand we talked to a couple of years ago - they offered 142 products, not SKUs, in the section “black tights”. If you want to turn your revenue around - you’ll not gonna do that with the biggest collection, but with the CLEAREST one. Where you edit and drop. Keep what is carrying the business. Change what’s blocking the growth. And look at openings that needs investment and innovation, even if it is not the “safest” choice in the room. That is exactly why we run our Collection Clarity Workshop. A 1-3 day workshop (depending on collection/team size). We help brands look at the range properly - what is strong, what is weak, what is driving the business, what is holding it back, what belongs, what needs to go, and where the real opportunities are. So the collection gets clearer. The decisions get sharper. And the brand stops wasting time and money on products that should not be there in the first place. More clarity for the internal team and your customers. And eventually more profit. The smarter way to build a collection. DM me for more info and to book your workshop