Case Study: Hints of Discontinued Items

Remember our "Class Of" table for the Fashion category? I do.

There are "tells" in this table that help me understand how a merchant approaches the business. In this case, the merchant in charge of Fashion discontinued existing items. Yes, the merchant failed to introduce enough new items to grow the category. Acknowledged. But the merchant also decided to take the hatchet to existing items.

How do I know this?

Look at the Class from Three Years Ago. Demand went from $564k to $384k to $160k in Years 1/2/3. Demand trails off after the introduction year, then trails off faster.

Look at the Class from Two Years Ago. Here comes a "tell".  Demand went from $860k to $276k to $75k. That doesn't happen because the items fall off faster ... that happens because a merchant says "I don't like those items". Not liking existing items and then not introducing enough new items is one of two things.

1. The merchant is killing the category on purpose (which happens all the time).
2. The merchant is committing professional malpractice.

Our job is to understand if (1) is happening or if (2) is happening.

If a merchant is trying to purposely kill a category, the merchant has to demonstrate that killing the category does not impact other categories. In other words, when I worked at Nordstrom, if we killed off Cosmetics we'd be killing off the business because fragrance on the ground floor of a store brought in new customers who shopped the entire store. There's nothing more alluring to customer acquisition than fragrance.

Tell me what you've learned so far (kevinh@minethatdata.com). Are you finding this valuable? My clients find it valuable.