07/12/2020
What a time to play a part in the traditional CPG retail and supply chain space – whether you are a retailer, distributor, or supplier. The last many months have provided us many examples of what it is like to shop in stores that are experiencing an unprecedented scarcity of goods, and over so many categories. I don’t think we have had mass shortages of such significance probably since the gas shortages of the early 1970’s.
We went from a January and February of pretty much a land of plenty to a March thru May/June where cleaning aids, pasta, beans, meats and toilet paper to name a few of the many things that became quite scarce. We witnessed large portions of store shelves empty for days and in many cases weeks on end. Your Online orders and BuyOnline Pick Up at Store orders were being delayed many days and in numerous cases; weeks. Neither the retailers, distributors, or suppliers could keep up with the demand, and none could get their supply chain back in order quickly.
What did we learn as retailers and suppliers? What could be some of the potential take-aways that will make us stronger and better should we happen to go through this or something similar again? What can we do to better protect our businesses, protect the consumer, and make for a better supply chain?
Something I think we learned for sure as a consumer, retailer, and supplier; is that no matter how much importance we have placed on SKU selection, variety within lines, and the ever popular line extending; nothing is more important to ALL of the above stakeholders than being in stock. Can I buy what I want and need, when I want and need it?
What became very apparent was that the amount of toilet paper offerings - be it brand or sizes - was less important than having it on shelf to buy. The amount of pasta cuts was less important than having the basic cuts in stock when we needed them. We needed less choices of brands, and SKU offerings within the cleaning aids with disinfecting properties, and just more of a few good options to buy. This went on category by category, across the spectrum of CPG.
This is a great time as a retailer, distributor or supplier to really look at what you are carrying and/or making and asking yourself a simple question; Do I need to carry so many SKUs? Can I trim this down without hurting my business? Can I carry and produce only the true winners? It is much better to have a little less selection and choice and have it on the shelf, or available to get to shelves, rather than having a wide variety of SKUs and no stock. Less is more…
It's critical to start looking at this, especially as a distributor or supplier; it's much easier and more efficient to distribute and produce more, of less thereby allowing you to be in stock more frequently, as well as giving you the ability to get ahead of your retailer partners, and discontinue your lessor performers before they do this on your behalf... Get ahead of those potential discontinuations that are for sure coming as retailers have seen that selection of product was less important as being in stock of key items.
Again, it has been proven that people today are more interested in buying something within the category that they were shopping, rather than look at the holes of the great selection and assortment of SKUs that once was… You need less of the variety, and more of the core SKUs, in stock, and ready to buy.
Looking for help in managing or tackling this concept? As a brand, distributor, or retailer, would you like to know how to do this with little to no emotion, and with a much more of an objective and clinical look and actually grow your sales? Let me know. This is what I love to do.
There is nothing like a good old fashioned SKU Rat...
