By Matthew Webster
Product range drives shoppers into stores
IRI’s European Shopper Insight report found that range continues to drive shoppers in to stores. In fact the majority of shoppers were said to prefer a ‘wide range of products’ over convenience, quality and store services in many cases. The only exception to this was with the discounters whereby having a wide range of products was the least important factor as shoppers are driven primarily by price.
In the UK, the influence of the discounters has meant many retailers are constantly conducting product range analysis across their categories, and in many cases rationalizing their ranges to cut costs. But ‘range’ – which includes wide assortment, choice of brands, and a good selection of healthy products in line with the growing trend for health and wellbeing – is still a key driver for consumers. So if range is what will be bringing shoppers to their stores, supermarkets need to be careful in how they tackle their range analysis and ensure that they are cutting them for the right reasons.
Getting your range analysis right
When IRI studied range in the Macroview Big Question report, we saw that the categories that had been cut the deepest were seeing a decline in sales, suggesting that poor informed decision making had resulted in the cuts being made too deeply and/or the wrong products had been excluded. Rather than using traditional methods which rely on prioritizing products based upon how they have performed historically, IRI’s Assortment Optimization solution expands the boundaries of capability in this area with unprecedented actionable insights:
- Which product attributes are most important to the consumers when shopping the category and to what degree.
- The incremental value of each product both to the category as a whole and to the brand or manufacturer.
- Where products are substitutable, which other products will they cannibalise and in what proportions.
- Identifying the most incremental category segments to target for category growth and NPD development.
- Dynamically leveraging incrementality to accurately predict the impact on performance that proposed assortment scenarios will have and revealing which products and brands will win or lose in each case.
This new type of analysis ensures that the all-important incremental contribution of each product is understood and that the assortment on the shelf meets the needs of the consumer whilst delivering the optimal return for both manufacturers and retailers alike. To see how this works in practice read our case study here.