Using AI to Deliver Strategic and Actionable insights for the Category Management Team

Case Study

Using AI to Deliver Strategic and Actionable insights for the Category Management Team

Business Objective

Our client is a leading American multinational manufacturer and marketer of home appliances. The Category Management team is responsible for generating growth for new and established product portfolios/brands, maintain good relationships with the retail channel partners to get better quality products and price, develop exit plans for products with uncertain future.

The following high-priority analytic solutions were identified

• Market Cluster Analysis to identify similar markets as most of the portfolio/spend decisions are taken at the market level

• Assortment planning to recommend SKUs to be assorted on the floor of retail stores along with planogram-level insights for selected retailers

• SKU rationalization recommendations to discontinue the appropriate SKUs and reduce inventory and manufacturing costs, after factoring in lost sales versus recovery through “good cannibalization”

Challenges

  • Lack of access to competitor POS data
  • Lack of visibility of floor capacity for some retailers
  • Convincing the retailers on the recommended assortments
  • Friction from brand/product managers on SKUs recommended for elimination

Solution Methodology 

  • Identified key Market Differentiators from available Market Attributes (Census, Store & weather attributes)
  • Developed clusters based on identified Key Market Differentiators
  • Automated the process of extracting Planogram data from the website of specific retailers
  • Built an Assortment Planning Engine to maximize Revenue/Margin for user-selected/recommended assortment profiles, controlling for Floor Spots & Price
  • Recommendations for SKU(s) to be discontinued were generated by learning from patterns of historical SKU removals and the corresponding demand redistribution behavior

Business Impact

 

  • ~8-10% increment in sales due to assortment optimization
  • SKU rationalization has helped in reducing manufacturing and product management cost
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