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Category Management Best Practices

Your Goal: Get the most sales/profit from the fewest SKU’s and least linear shelf space, of course, while maintaining sufficient variety to keep the majority of your customers satisfied. Smart retailers know that inventory ties up cash. Having not just less inventory, but the right inventory frees up cash for other uses. Flashing is a tricky category because there are different types of flashing as well as different sizes for each of the various types. And then of course, there are different brands within each type. Here are some best practices to reduce sku’s and get more sales from the ones you keep:

  • First, review your sales of flashings by item. Look also at brand sales.
  • Eliminate your slowest movers. You know, the ones on the bottom shelf that are gathering dust.
  • Eliminate duplicates. There are no good reasons to carry 3 different brands of 6” asphalt flashing. At least narrow it down to 2, if not just one. Generally, when you eliminate a SKU, turns of like-items will go up as customers will quite often switch to the remaining SKU(s) without batting an eye. This reduces cash you’ll have to tie up in inventory.

Merchandising for success

  • De-clutter to make the section more easily shoppable; visual merchandising principles: Shelf shopping behavior (left to right, light to dark, top to bottom) make it easy for the eye to flow and find what it’s looking for
  • Hire “silent salespeople” at no cost! Use signage that highlights product benefits to help your customers choose the right product
  • Use signage to generate add-on sales (get a better warranty when you use a complete system); alternatively merchandise system materials together
  • Train your customers to shop based on their performance requirements, not just cost. Remind them it costs about $2700 to fix a leaky window install—best to do it right with good materials the first time.

Contact a Henry weatherization expert for advice and support on your next job.