One of These SKUs is Not Like the Other: Navigating Your Assortment

Optimizing Your Assortment with 4R Navigator

4R Systems recently announced the all-new 4R Navigator – a suite of machine learning-powered analytics services without the typical overhead costs. 4R Navigator consists of four scientifically designed solutions. Each solution aims to help retailers solve critical business challenges by providing actionable insights with very fast results. Each solution can be deployed and provide quick – but substantial – wins in as little as 3-6 weeks.

To better understand what 4R Navigator is, we will explore each of the four solutions in more detail. First up – SKU Rationalization!

What is SKU Rationalization?

SKU Rationalization helps retailers evaluate each SKU’s contribution to the bottom line. Once the evaluation is complete, SKU Rationalization’s machine learning algorithms will recommend which non-performing SKUs should be dropped from your assortment. By dropping underperforming SKUs, your company can achieve major cost reductions, thereby increasing profitability from your assortment.

Today, retailers can carry up to millions of SKUs in their assortment. The reality is, some SKUs will not sell as well as others and will actually have a negative ROI. Underperforming products and product categories add unnecessary costs that directly impact the bottom line. Retailers have historically struggled with finding the right combination of underperforming SKUs that are responsible for the highest costs.

By analyzing your store’s assortment with Machine Learning and AI, SKU Rationalization can quickly find this information for you. It shows exactly which SKUs should be dropped in order to find the highest total cost reduction from your product mix. It can also highlight which product categories have the greatest opportunities for improvement, and which categories are bringing the most profit.

How Does SKU Rationalization Work?

The 4R team will partner with you to define and collect relevant historical data. 4R will then feed your data into an analytical process that identifies SKUs, or even individual SKU-stores, that are underperforming. This is accomplished through the evaluation of historical sales and product economics, as well as machine learning techniques to provide projections of profitability.

Additionally, 4R’s proprietary lost sales estimation process is used to adjust performance potentially affected by external factors. Lost sales are determined by looking at what a store could have sold of a sold out item based on its historical selling strength, had the store had that item in stock. In as little as 3-6 weeks, 4R’s insights can be leveraged to prune assortments or adjust inventory policies, boosting productivity and ROI with no additional resources required.

Get on the Path to Profit

Ready to improve your bottom line in as little as 3 to 6 weeks? To get started with SKU rationalization, or to learn more about the other 4R Navigator solutions, call us at (610) 644-1234 or email