Walmart reverses course on SKU rationalization; product data becomes more important than ever.

 

Walmart appears to have thrown in the towel on SKU rationalization. Now, at least, they’ll have a larger selection of towels to choose from.  It’s likely that leading retailers in several industries will take a harder look at their own SKU rationalization plans and make adjustments to ensure customer satisfaction and retention.

Better product information helps counter the effects of SKU rationalization on CPG makers.  Conversely, a product information management (PIM) system also helps when retailers reverse course and resume diversifying their offerings. That’s important, especially when, as Deloitte observes:

…as the number of active SKUs increases, indirect supply chain costs and staffing levels increase as well… In addition to the higher staffing levels needed to support new SKU introduction and ramp to volume, the trade-off for a higher number of new SKUs can also lead to reduction in forecast accuracy, which then ripples through the supply chain to impact inventory levels and perfect order delivery rates; that is, how often items are shipped complete, on time, in perfect condition and with perfect documentation.

Better product data management can help offset those risks by providing better visibility into inventory levels, improving replenishment planning, and better phasing in and out of promotional, seasonal or “roll-over” SKUs.

And especially, giving your retailers complete and accurate product information will help them market your products and make them stand out in a crowded field.  As Modern Distribution Magazine recently put it, “the better the information, the more likely their product would be the one customers chose to buy.”

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