Range matters – up to a point

Posted by Oliver Koll on Oct 23, 2014

Folie5Brand range and size are related – likely reinforcing each other: Bigger brands are able to get more SKUs listed and more SKUs increase the odds of being big. However, the relationship between share and range shows an interesting pattern.

While the number of SKUs increases dramatically and roughly in line with share up to around 10% market share, the relationship becomes much less pronounced for additional share points. Relative to the SKU numbers of a 10-15% share brand, a small brand (< 5% share) offers only about one third, whereas a large brand (40%+ share) only adds one third. This provides a strong indication that big brands rely much more on “power” SKUs – individual SKUs which are able to attract a large number of buyers.