For the last several years, the beer and wine industry has experienced constrained growth and out-of-stock issues due to unproductive SKUs taking up valuable shelf space. Through its extensive category and shopper research, leading beverage alcohol manufacturer Constellation Brands has seen the industry lose sales opportunities due to outdated shelf practices, complex and crowded aisles and the lack of an effective assortment strategy. The company felt it was important to take a rigorous and disciplined approach to assortment to simplify how the shelf was set for consumers in order to maximize both the shopper experience and category performance.
IRI partnered with Constellation to derive key assortment insights and establish a "shopper-first" best practice for managing assortment that is grounded in incrementality. Leveraging IRI's Assortment Optimization Solution, IRI found that up to 20% of items could be removed from the shelf with no negative impact on the category. In fact, removing redundant, unproductive SKUs could actually grow category sales by up to 5% by freeing up space for more incremental SKUs, unlocking greater shopper conversion and trade-up as the shelf becomes easier to shop. Incrementality data also fed into the client's Shopper-First Shelf assortment tools, enabling data-driven insights by retailer and market on which items to add/maintain ("green"), watch ("yellow") and remove ("red") from a set. With Constellation’s Shopper-First Shelf, it had a proven approach to grow the category by optimizing shelf flow, space and assortment based on how today’s consumers shop for beer.
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