November 9, 2021

Maximising consumer choice through range optimisation

Author:
Julian Dailly, EVP
If you’re responsible for managing these types of decisions, it’s essential you know how good your ranges are and what your range could deliver in terms of sales and margin in the future with smart range management.

Consumers love choice, not only because it gives them freedom but also convenience. Who hasn’t replied “I’m just browsing”? Really what we’re doing is assessing the range. If it’s working well, we’ll purchase something. If not, we’ll turn around and say “Thanks!” then leave.


Getting ranging right is therefore very important for brands in all sorts of consumer markets; from whole offer of a new grocery brand, to the looks in a standalone fashion boutique, or for the individual categories of a drinks conglomerate.

Ranging has become harder over time. The internet has reset consumers’ expectations for not only the breadth and depth of choice, but also the speed and convenience with which they can browse it. Physical retail has a real job to do to ensure ranges are fresh, relevant, and tied as closely as possible to what most shoppers are looking for.

Covid has and continues to play a role in shifting consumer browsing habits, especially in physical stores. Shopping missions have become more direct and transactional because of the continued threat of Covid infection, the uncomfortableness of wearing masks and the reduced ability or desire in consumers to touch, taste, smell, try on or examine products on display. Ranges need more than ever to be easy to navigate and easy to shop.

Often the job of ranging is outsourced to suppliers, which is very common in the US. But are suppliers really best placed to suggest optimal ranges that include their competition? Today’s successful category management teams lead on their own range optimisation. They ask and answer hard questions such as:

  • Is the range currently performing at its fullest potential?
  • What more could we achieve with the range by making some minor adjustments?
  • What could we achieve with bigger changes?

If you’re responsible for managing these types of decisions, it’s essential you know how good your ranges are and what your range could deliver in terms of sales and margin in the future with smart range management.

Understanding and optimising range
At Savanta, we help clients manage their ranges and drive sales and margin upwards. We have two range-building tools: TURF modelling and a Range Builder. Could these help you make better decisions at you next range review?

TURF modelling: Is an enhanced model, but remains a relatively simple, fast and cost-effective ranging tool. It is particularly useful at early stage range development, such as early concept stage, or where a number of ideas exist, but where these ideas need to be reduced. Multiple range building options can be assessed, including:

  • Fixed SKU/variable range builds: e.g. fixing the current range in place and adding new SKUs/options.
  • Free-building: e.g. building a range ‘from scratch’ based upon those SKUs/options with the most potential regardless of whether new ideas or current.

Our simulator tool allows further build iterations to be looked at in the future, long after completion of the project.

Range Builder: Offers all the benefits of TURF but is built around a virtual market place, where consumers make purchase choices when presented with a number of alternative options. This increased realism also includes the influence of pricing and competitors. These forecast models can also be based on a much larger SKU list (often 100+), which can include all current ideas, new ideas and competitor products and ideas. The virtual marketplace forecast model can assess and understand the increased dynamics linked to the purchase decision, meaning marketing teams can use it to assess the impact on the range of:

  • Line-up changes
  • Price changes
  • Packaging changes
  • Claims changes
  • Ingredients changes
  • Components of a service offer changes

Why we know it works
Our approach has been used across a wide variety of business issues, including market understanding.

  1. A large consumer company wanted to grow their market share in a key category. They had brainstormed over 20 new ideas, with new benefits and claims, although the propositions were early stage. Our methodology helped them demonstrate how and why the best ideas could drive greater sales reach for the range, which current ones could be replaced, providing reassurance that subsequently developing these ideas in more detail would drive growth.
  2. A large healthcare brand had over 40 different products available in market. The marketing team increasingly felt the range had become bloated, with many lines not pulling their weight, in what was an increasingly competitive category, and also driven by price. We created a comprehensive category model that validated the role of each SKU in the range, and then pin-pointed where the weak links existed. In addition, it sought to streamline the range and help optimise how to best introduce new, alternative, and better performing products to the line-up. Ultimately our research led to new ranges being created for specific retailers. We also helped determine how pricing can then be used to execute this new range to provide greater category benefit, in terms of up-trading to more expensive lines whilst attracting new consumers to the category.


Find out more:
Our approaches are truly flexible helping to determine the overall impact the new range has on the category overall – identifying any potential for category growth with the new range and perfect for your trade stories.

For more information on how we can help brands inform strategy, please get in touch. 


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