Follow-Ups: SKU Rationalization, Online, Kohl’s

SKU rationalization has come up as a topic with great frequency lately. Here’s another perspective on it from the Bishop 2009 Total Score SuperStudy that includes some thoughts on how suppliers should evaluate a category and their position in it:

"To assess their category and brand vulnerabilities, suppliers need to have a firm grasp on five key metrics, according to Bishop: variety (What does the retailer need to meet consumer demand?); profitability (How much money does the retailer make on this item/line/category?); productivity (How productive is this shelf space?); working capital (What is the inventory costing, and what is the ROI?) and growth (Is the category growing or declining?).

We’ve regularly discussed the need for trade promo to become more prominent online. Further proof of this comes from the UK, where online has now surpassed television to become the #1 advertising medium.

"The UK has become the first major economy where advertisers spend more on internet advertising than on television advertising, with a record £1.75bn online spend in the first six months of the year." "The milestone marks a watershed for the embattled TV industry, the leading ad medium in the UK for almost half a century. It has taken the internet little more than a decade to become the biggest advertising sector in the UK."

Last week, we discussed how Kohl’s is having a good recession and was opening thirty-five new stores in former Mervyn’s locations. This article takes a similar tack, and notes that Kohl’s has the cash to buy up additional empty stores.

"The fourth-largest U.S. department-store chain is accumulating cash to grab locations abandoned by shrinking or defunct retailers, said Chairman and Chief Executive Officer Kevin Mansell. Any store takeovers would come on top of as many as 25 new locations Kohl’s already plans to build for next year at a cost of about $275 million," he said. “Nobody’s come to us and said they want to sell us 50 stores, but I suspect it’s going to happen,” Mansell, 57, said in a Sept. 24 interview in New York. “We want to be in a position to act.”