Range Review Process

🎓 Definition

The range review process is the process by which the Retailer is reviewing the performance of its range, compares it to the budget, and integrates customer trends to identify what are the required changes in its Range to increase its performance.

It is critical for Buyers and Manufacturers to share a common knowledge of the process itself, as well as the performance criteria considered, to jointly take the best decisions.

💡Factors to be considered for Range Review

Sales Data
To compare the sales performance of an SKU with the overall performance of the Category to see whether the SKU overperforms or underperforms to other products.

Merchandising Hierarchy
The review process should be done from the minor level of the category hierarchy to the biggest, for example, Segment > Sub-Category > Category > Category Group > Division.

Category Role
The role of the Category is also an essential factor in the Range review process. For example, Category A is being assigned by the Retailer as a seasonal role. The retailer needs to analyze how the range covers customer needs during a particular season. Also, during the rest of the year, a Retailer can optimize their product range and provide enough space for other category products on shelves.

Category Strategy
It helps the Retailer determine the type of specific products they can implement in the store based on the Category Strategy (Drive traffic, generate cash flow, drive transaction, generate margin).

Seasonality
Taking seasonality as a consideration factor will help Retailers to determine how many times to review the range within a year. For example, Retailers will sell more sweaters in the textile category during winter than in summer. Therefore, one must check the product range as the seasons change, or new trends appear.

❓What is Range Review Process used for

Having an effective range review process is an opportunity for both Retailers and Manufacturers to positively develop their working relationship and grow their category so both parties can benefit from the improvement of the shopper’s experience.

1. Better Planogram display
2. Maximize the shelf space to display more top-selling products.
3. Assortment optimization - Improve the efficiency of shelf space by discontinuing slow-moving products and replaced with new ones.
4. Optimizing Retailer's inventory levels, by ensuring the right products are in stock at the right time. This can reduce the risk of overstocking or understocking.
5. Set optimal product pricing by analyzing market trends, competitor pricing, and customer price sensitivity.
6. Build better relationships with Manufacturers by providing valuable feedback and insights about their product's performances.

How often should a retailer conduct a range review process?

Seasonality should be taken into consideration when determining the frequency of range reviews. For example, if a retailer observes significant seasonal shifts in product demand, such as selling more sweaters in the textile category during winter than in summer, they should review the product range as seasons change or new trends emerge. Retailers should consider their specific market, customer behaviors, and product categories to determine the most appropriate frequency for their range review process.

What are the specific performance criteria or metrics considered during the range review process?

There are several factors and considerations for the range review process, including sales data comparison, merchandising hierarchy, category role, category strategy, and seasonality. While these factors provide a comprehensive overview of the aspects to evaluate, the article does not detail the specific performance criteria or metrics to be used. Retailers should focus on key performance indicators (KPIs) such as sales volume, profit margins, inventory turnover, customer satisfaction, and market share to effectively assess the performance of products within their range. By analyzing these metrics, retailers can make data-driven decisions to optimize their product assortment and improve overall category performance.

How can retailers effectively collaborate with manufacturers during the range review process?

The collaboration between Buyers and Manufacturers to jointly make the best decisions during the range review process. To foster effective collaboration, retailers can engage manufacturers in discussions about product performance, market trends, and customer feedback. By providing manufacturers with valuable insights and feedback about their products' performance, retailers can build stronger relationships and encourage manufacturers to make necessary improvements or adjustments to their offerings. Additionally, retailers can work closely with manufacturers to develop tailored product strategies, pricing strategies, and promotional activities that align with both parties' objectives and contribute to the overall growth and success of the category.