Single Store Owner

AUG-SEP 2016

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36 / Convenience Store News for the Single Store Owner / AUGUST/SEPTEMBER 2016 FROM THE EXPERTS item-level data to determine the category item lists/delists/reviews. Follow these three steps: • Sort your item rank report for each subcategory in descending order (from highest to lowest dollar sales). • Confirm the number of target listings for that subcategory (based on your category assess- ment and FSI results). • Determine which items should be considered for removing from your assortment lineup (as well as any additions). Make sure the items you remove have a similar item to meet shopper needs, is not a newly listed item, and that it has been in stock and available for an appropriate amount of time. Make sure new items you choose to list meet unmet shopper needs, aren't just a duplicate of an- other item, and/or have a strong marketing program behind them. 4. IMPLEMENT Now, implement the recommendations in your store. This also ties in with decisions you make for the shelf. You should also share your findings with key staff in your store so they, too, can benefit from the category learnings you have uncovered. Choose a category that you know has too many SKUs or one where you've struggled with making assortment decisions. Determine the data sources you can access to complete your assortment analysis (make sure you incorporate your supplier and their knowledge and data). Complete an assortment analysis using some of the measures I've captured above, and determine the biggest areas of opportu- nity for your category. You may be surprised at some of the opportuni- ties you uncover. SSO Sue Nicholls is founder and president of Category Management Knowledge Group (CMKG), based in Calgary, Canada. She is a speaker and consultant, working with business partners to bring category management training solutions to different areas of retailing like the convenience channel. Editor's note: The opinions expressed in this column are the author's and do not necessarily reflect the views of Convenience Store News for the Single Store Owner. and mints, and changemakers/penny counter goods. If you don't have that level of detail, you can either manually categorize each item for a better analysis, or just use your total confection- ery item rank report. • Market item rank report (for convenience chan- nel): Provided by your supplier for each of the subcategories. This is important because with- out it, you're basing your assortment decisions only on what you currently carry in your store. You need to consider everything that the shop- per is purchasing in this category, as you may be missing out on some important items. • Brand and subcategory productivity: You should start by looking across brands and subcatego- ries to determine in which ones you have too many/too few items relative to the dollars that each sells. (Refer to How To graphic below.) A fair share analysis is a great way to complete some topline assortment analysis for your categories and gives perspective on where you may be carrying too many or too few items. Combine this analysis with an understanding of the shopper and category opportunities from your category assessment, and Step No. 3 will be an easy next step. 3. RECOMMMEND Now that you understand the opportunities from your subcategory analysis, you can analyze your Make sure new items you choose to list meet unmet shopper needs, aren't just a duplicate of another item, and/or have a strong marketing program behind them. How to Calculate Brand & Subcategory Productivity CATEGORY $ ITEM FAIR SHARE SHARE SHARE INDEX (FSI) Subcategory A 40.6 45.9 113 Subcategory B 36.8 32.4 88 Subcategory C 22.6 21.6 96 CALCULATIONS: Item Share: # of current items by subcategory ÷ total # of category items This measure tells you what percentage of items each subcategory carries of total category items. In the example here, 45.9 percent of items are in Subcategory A. Fair Share Index (FSI): item shares ÷ category $ share This measure gives you a comparison between the share of dollars that the subcategory represents in your business to the item share. If the FSI is greater than 100, it means you are carrying more items than your dollar sales for the subcategory warrants.

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