Optimizing the assortment mix for an airport retail store

Abstract

Deciding assortment mix at category, subcategory, brand and item level is extremely important for a retail store to ensure better space utilisation, optimise inventory costs and maximise profits. Understanding consumer behaviour through data analysis, can help make better decisions for assortment planning and can convert this art to science. In this report data for 5 stores at a given airport is analysed. Shelf space requirements, product wise margin and budget constraints were not specified, hence a revenue maximisation rationale is followed. Some key insights are: ACROSS STORES: Subcategories Whiskey and Chocolates contributes to more than 75% of total customer spend in all the stores combined (Graph 1) Looking at the Whiskey subcategory, the mostly sought out and frequently brought brands are Johnnie Walker, Chivas Regal, Glenfiddich, Glenlivet and Glenlivet (Graph 2) Looking at the Chocolates subcategory, the top sought out and frequently brought brands are Lindt, Toblerone, Hershey’s, Butlers and Evan. (Graph 3) 87% of the customers buy a single category. (Graph 4) Amongst 12% customers who buy two categories, 76% bought products in the Food & Confectionary & Liquor category. Of these 76% customers who buy F&C and liquor, 75% buy whisky and chocolates Single Category 87% Two Categories 12% Three Categories 0.5% The store remains closed between 10am-1pm, and 10pm-1am. We see that the maximum combined revenues across stores is highest from 1am-2am. (Graph 5) Looking at the average bill value and average units bought, Italians have the highest average bill value, and low average number of units, thus they spend large amounts on more premium products. While Brazilians are outliers in the higher spending, since they typically spend large amount of money on a larger number of units. Pakistani nationals stand out since it has the highest avg. no. of units bought, and low average bill values. (Graph 6,7) Gender-wise trends for subcategory are not very evident. Both men and women spend~60% on whiskey and 10% on chocolates. (Graph 8,9) ASA Pesada, China Airlines & Ghana Airlink Airlines contribute to maximum revenue per flight (For details on all Airlines revenue per flight refer table 1.1) Among all the stores, the frequency of liquor getting purchased by the customers was the highest. Among Liquor, the frequency of Whiskey getting purchased by the customers was the highest. Among Whiskey, Johnnie Walker and Chivas Regal had the highest frequency of purchase by the customers. (Refer table no. 15 for more details)