Assortment Optimization

Best Practice Assortment Strategy Grows Category, Receives Industry Recognition

ISSUE

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leading beverage alcohol manufacturer Constellation Brands has seen the industry lose sales opportunities due to outdated shelf practices, complex and crowded aisles and the lack of an effective assortment strategy.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.

INSIGHTS

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.

IMPACT

By using the Shopper-First Shelf approach for assortment, retailers have been able to streamline their offerings and maximize the efficiency of their shelf space while still delivering on shopper needs. They have also seen category sales outperform control sets by mid-single digits, with some retailers achieving double-digit gains.

By the end of 2020, almost 15,000 retailer accounts – including chain and independent stores, small and large formats – had implemented this shopper-first strategy.

Constellation was also recognized for its excellence in innovative, profit-generating and shopper-centric category management platforms across all of CPG and was named a “2019 Category Captain” by Progressive Grocer magazine.

"This collaboration has empowered us to bring actionable, objective and data-driven assortment insights and guidance to our retailer and distributor partners. Being able to demonstrate the impact of adding/removing specific items and where sales are added, removed or transferred is a game-changer in helping retailers see how they can do more with less. These insights are critical in enabling the industry to take a more rigorous and disciplined approach to assortment and unleashing category growth."

Lisa Scalise-Boswell
Senior Vice President, TBA National Accounts
Constellation Brands

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