Category planning and range management for smaller retailers
- When you’re running a smaller retail business, the large retailers can seem like a big threat. But you have lots of advantages – you’re local, people know and trust you, and many consumers actively want to shop in smaller shops these days.
- To make the most of these, it’s vital to be as expert in running your operation as they are. Category planning and range management are two skills that have made the larger retailers more profitable. What do these mean?
- CATEGORY MANAGEMENT – in simple terms, this means making sure that every important category is properly represented. If you divide the entire offering that the store represents into categories – ambient goods, chilled, confectionery etc. – then each category should be given the right amount of space and display that it merits, according to the type of customer flow that you have. Each category should then be managed to give the maximum yield from the allotted shelf space.
- RANGE MANAGEMENT – this means ensuring that each category has the smallest number of sku’s (stock keeping units) consistent with satisfying the needs of your customers. Too many and you increase your costs, and make it difficult to shop. Too few, and your customers can’t get what they want.
- In years gone by, this would have been difficult for small retail operations to carry out, as the data wasn’t usually available. But technology advances have changed the situation – most good shopkeepers now have all the numbers available. In fact, they can have too much data, too little time and maybe not the data handling skills to do the analysis.
- This is where we can help. By analysing your sales data we can optimise the offering on shelf, identifying areas for expansion and ‘sleeper’ lines that generate little or no revenue. You can cut your stock in hand and working capital, increase stock turn and have more satisfied customers.
- This is only what the Large Retailers - naming no names - do to make large profits. So why shouldn’t you do it, too?
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