AI-Driven Category Management for a Global FMCG Brand

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The Problem

A global FMCG brand struggled to allocate shelf space efficiently across multiple store formats. Traditional space-to-sales ratios led to overstocked low-performing categories while high-demand products lacked visibility. The retailer needed a more dynamic, data-driven approach to ensure every category had the right shelf space for optimal performance. With thousands of SKUs across multiple regions, the company struggled to determine which products were truly driving sales and which were taking up valuable shelf real estate. Traditional category management approaches were slow and reactive, resulting in missed opportunities.

The Solution

We first conducted a significant tail analysis, which identified 845 SKUs (28% of total) for delisting while still maintaining current sales. By removing these underperforming products, we were able to free up 159 linear meters (45.5 sqm) of store space, creating several key opportunities:

  • Enhancing the existing assortment by reallocating space to higher-performing SKUs.

  • Introducing new product categories to improve customer choice and store profitability.

  • Leasing freed-up space to third parties, adding an additional revenue stream.

  • Optimising store layouts, providing insights for future store footprint reductions or new store designs.

Following this, we implemented a Category Performance Optimisation Model, a data-driven allocation framework designed to dynamically adjust shelf space based on sales potential rather than static percentage-based distribution. This model:

  • Reallocated shelf space dynamically to match sales performance trends.

  • Prioritised high-margin and high-demand SKUs while ensuring proper category balance.

  • Improved overall store efficiency, allowing for a better shopping experience and increased revenue.

The Impact

Increased Sales

12% sales uplift from improved product placement

Less Waste

18% reduction in inventory waste

More Space for Innovation

Freed 159LM (45.5SQM) of space for new product development and third-party leasing

Enhanced Shopping Experience

Improved category organisation, leading to better customer engagement and sales uplift

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