Category clutter – a result of frequency and penetration

Posted by Oliver Koll on May 17, 2016

SKUnumbersHow do category purchase frequency and category penetration impact the variety shoppers encounter? To answer this question, we investigate category assortments across 8 markets and 79 categories. We compare the top and bottom 25% categories in terms of category frequency and penetration. We find that categories that are purchased more frequently and by a larger number of households boast substantially more SKUs on the shelf. High frequency categories offer on average 5 times more SKUs than categories which consumers purchase more rarely. In France, for example, high frequency categories have on average 1,735 SKUs which is 4.4 times more than low frequency categories feature. Looking at category penetration, we find a similar pattern: High penetration categories have a wider assortment, on average 4 times larger than categories with low levels of penetration. Category frequency and penetration impact not only variety but also new product activity which is substantially higher in high penetration or frequency categories.