Tuesday, July 21, 2015

Lean Retailing: Procter & Gamble's CEO Willing To Cut Assortment

Another blog post about lean retailing! Once again, I believe that we will see more & more of those initiatives in the next few years. Product ranges have become too complicated, and implies 3 issues:
  • The cost of goods sold for retailers is growing fast
  • The high complexity of choice is causing issues to customers creating disatisfaction in shopping experience
  • The large number of SKUs means a lower profitability of the manufacturing chains.
Today, it is nobody else but the CEO of Procter & Gamble (one of the supplier with the largest product ranges) that explain the reason why he believes he should adopt lean retailing. 

Therefore, AG Lafley considers they need to focus on the best franchises, simplify the ranges in order to ease customers' decision and boost sales.

This may seem non relevant, but the fact a company like P&G acknowledge this fact, and is working on lowering the number of SKUs available show clearly that a leaner offer may result in highering of sales, by being more efficient and on focusing on other leverage to improve shopper experience.