SKU OPTIMIZATION SOLUTION

For most Consumer Packaged Goods companies, approximately 20% of their total gross revenue is generated by at retail promotional SKUs. Despite this fact, the vast majority of companies cannot accurately and consistently measure or manage this investment. Generally, varying levels of financial accuracy, completeness, and visibility exist across brands and business units. Therefore, it is impossible to determine profitability, effectiveness, and ultimately…ROI. The primary cause of this problem stems from a number of issues:

• SKU costs are buried within several departmental budgets and systems and connecting these data points either does not occur, or occurs inconsistently.
• SKU level information is not available as it is nearly impossible to track or measure project level metrics
• Centralized project ownership does not exist with end-to-end project lifecycle accountability.
• Functional departments often have different objectives and the data only represents their specific departmental goals and their needs.

Lacking these basic controls, promotional SKU investments follow the 80/20 rule in that 80% of revenue and profits are derived from only 20% of the SKUs. While it is understood that revenue and profit are not always the goal, such as in a new product launch, there are still too many cases where in-store promotional SKUs are funded without any financial or strategic benefits. As a result, millions of dollars are lost and resources are wasted.

Terrain allows companies to make decisions that will maximize incremental SKU margin by accurately and consistently tracking the most relevant factors of in-store promotional SKUs - cost and revenue.