Counter skus master: Listings vs. Potential Listings

Manufacturers and Retailers are always in a long discussion to plan the best assortment for every counter.

The process for listing/delistings will come out with the answer what skus will compose the counter. But shelves cannot stretch to list in the Retailers all new product launches. Manufacturers argue to list the new product as a part of a global strategy, new consumer trends or continue satisfying some existing segment with new format or flavor. Retailers argue that new product fits or not in their price strategy. Or products already listed which belong to the same lines of new skus are or not bringing enough margin to their business. This process will end giving to every Manufacturer a different amount of skus to list at Retailers and supporting their business.

This listing/delistings process will never end, because is the principal part to find out the best assortment and as a consequence satisfy consumers and generate better profitability’s.

Manufacturers will end, producing some amount of their product portfolio only for certain Retailers. That creates since the beginning of product introduction some inefficiencies that could lead to a failure in the future.

For Manufacturers and Retailers look at listing vs. potential listings become real important as a management measure to assure a sustainable Manufacturer portfolio and profitable Retailer assortment. Potential listings will be the total amount of product selling in the Market. Listings will be the total skus listed at some particular Retailer.

Manufacturers want to look at this measurement to see how efficient they are listings products. They will also compare that number with other Manufacturers in the same category to have a reference figure to determine good or bad performance.

Retailers want to look at this measurement as part of finding the best assortment. Being aware of what percentage of skus is listed from every Manufacturer will give the alternatives for better choices in the Market. They will also have a good measurement, indicating the amount of support to Manufacturers and establish “fertile ground” for future and better negotiations.

This listing efficiency measure let Manufacturers understand if they have enough listings or products at some particular Retailer and in the Market. This conclusion is really important in the Manufacturer future directions and planning in terms of investments and effort focus of the Company.

As a rule of thumb, having more skus satisfying the consumers will lead to bigger sales. That will be a good thing as long as Manufacturers in the same category have the same efficiency to produce and sell/distribute. That means if the Manufacturer is efficient, more skus will give a bigger and healthy turnover.

On the other side, the Manufacturer needs to list in the Retailers those products as much as possible, and as we discussed that could or not happen.

Manufacturer A could have more products in the market than B, but can be less listing efficient at Retailers. For example Manufacturer A has 50 skus, and B has 60 skus. Then Manufacturer A has listed 35 skus at Banners Z= 70% listing efficiency. Manufacturer B has listed 39 skus at Banner Z= 65% listing efficiency.

The solutions to increase Manufacturer portfolio and turnover are really different internally at the Company. When the Manufacturer does not cover consumer segments than other Competitor does, he will need more products in the Market, and will be conducted by Marketing department. When the Manufacturer does not list enough products at the Retailers, the first implication in the short term will be for Sales department. Although in a long run could also involved Marketing department. Marketing department should measure the counter pressure as part of new product launch analysis. New launches could produce a systematic no listed skus, if the Manufacturer overlooks counter pressure.

Manufacturers and Retailers should monitor listings vs. potential listings as strategy measure, and put them in the scorecard of their respectful Companies. This measure will conduct them to align investments and efforts. They will control the process to pick the good opportunities, put in place the best possible assortment and generate higher sales.