What happens with delistings?
To make room for innovations, sometimes products have to be removed. Often this is looked at in terms of turnover per store, but it is also interesting to investigate whether these products appeal to a specific group of customers.
Case
A supplier has an article that is not selling well. He wants to check if there is still potential for the product. The product was delisted, so we are able to analyze if the advice was correct.
How do we evaluate the sales of the article?
Sales of the article
The article (indicated in orange in the graph) currently has low sales, about 1/5 of the turnover of the best-selling product. When we need space for new references, the article is eligible for delisting due to its low sales.
Source of the tables: in the 'Sales Report' (available in Basic and Advanced Pack), go to the 'Sales' tab and at the bottom you will find the sales of all your products.
How unique is this product?
We notice that the product is often bought in combination with other articles. Almost all customers buy articles from the competition, a large part also buys other products from the supplier.
Source of the tables: in the 'Venn Diagram' (available in the Advanced Pack), you select the article, all your other articles and all products of your competitors, each in 1 circle.
Does the product add value to the category?
We have 2 products that bring few additional customers to the category, product A and product B. Most of the customers who buy these products already buy another product from the category, which has more customers. When we look at the graph below, we see that product A has many unique customers, which is not the case for product B. The likelihood of delisting product B is therefore higher.
Source of the tables: in the ‘Assortment Report’ (available in the Premium Pack), select the ‘Penetration ladder’ and choose the product segments you want to analyze.
What are the first results after the delisting?
The gain-loss analysis shows that after the delisting 30% of the turnover has flowed to other products, the other part has been lost, mainly because those customers have spent less.
Source of the tables: Gain-loss analysis (Adhoc report)
Conclusion
The article did not perform so well in sales and also did not have so many loyal customers who only bought this product. The delisting therefore seemed a logical choice. After the delisting, we notice that part of the turnover has been recovered, but that also a part has been lost, among the customers who previously bought the product.