Category assortment optimization with planogram drives higher retail sales

Recommended the best assortment mix and shelf positioning to improve category
sales at a big box retailer

Business Scenario

The client is an American consumer health company, operating 25+ leading proprietary brands globally across multiple categories such as self-care, essential health, skincare, and beauty. The brand being a leader across 5 product categories, was required to design a precise merchandising strategy to achieve the desired growth while dealing with multiple constraints like case pack adherence and DOS compliance. Each planogram reset involved 3-4 months of manual analysis of national-level sales and trying out multiple shelf arrangement scenarios which became time-intensive and rudimentary over time.

Sigmoid Solution

We undertook a consulting exercise to deeply understand the value chain and identify growth avenues for the brand such as shelf optimization. We created an ML-based assortment optimization solution to automate the creation of planograms for the retail stores. The solution analyzed the store and category-specific shopping behavior of the consumers and identified the placement areas for maximum sales. Multiple data sets were pre-processed together to form store clusters using unsupervised clustering methodology. For each of the 42 distribution centers (DC), store clusters were created to improve the assortments for maximum sales.

Business Impact

Sigmoid optimized the shelf placement for the brand with space-aware and localized planograms ensuring maximum category sales. The solution identified opportunities to introduce new SKUs and increase visibility for the brand.

>2% points increase

in the brand's share of shelves

50% savings

for retailer labor hours

8% uplift

in sales projected in the market-leading category

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