Merchandise Residual Value

Every item in your merchandise/product assortment has two key attributes.

1. It is purchased by newer customers, average customers, or loyal customers.
2. It either adds to the future value of customers, is neutral, or detracts from the future value of customers.

If you have to take a bath on an item because the cost of goods on the item skyrocket over the next few months (or it doesn't, who knows), take a bath on items that appeal to newer/loyal customers and/or items that add to the future value of customers.

Perform the analytics and know exactly who each item appeals to ... know if that item adds or detracts from future value.