November 27, 2018

MLV - Items Eventually Slump

Here's an example from the data I analyzed ... let's look at the "best of the best" ... the top 5% of the merchandise assortment. I graded my merchandise segments A/B/C/D/F so that means the top 5% is an "A". I wanted to see what happened to "A" items in the next year. Here's what happened:
  • 71% remained at "A" status.
  • 19% dropped to "B" status.
  • 3% dropped to "C" status.
  • 1% dropped to "D" status.
  • 1% dropped to "F" status.
  • 5% were completely discontinued.
One wonders why 5% of the very best items were discontinued in the first place? There are always good reasons for this.

Only 71% of the items remained in the hyper-winning "A" segment. This means that many items begin to die. This is why new merchandise is so darn important - you have to find new items to replace the 29% of winning items (in our example) that slumped or were discontinued. Marketers are well-equipped to help facilitate this process. Go make something good happen, ok??

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