Decoding Drop-off SKUs: How to Identify & Remove Performance Killers

In the fast-paced world of quick commerce, maximising efficiency and profitability is crucial. One major hurdle brands face is drop-off SKUs—products that consistently underperform and diminish overall metrics.

Why Drop-off SKUs Matter in Q-Com?

Q-Com thrives on high SKU velocity and repeat orders. However, not all SKUs contribute equally. Slow-moving products consume valuable inventory, increase carrying costs, and hurt brand visibility due to platform algorithms favouring faster sellers.

The Real Challenge

- Limited Shelf Space: Platforms prioritise high-velocity products, making it tough for slow movers to stay listed.

- Inventory Costs: Underperforming SKUs lead to higher storage and wastage costs.

- Platform Penalties: Poor performers risk delisting, reducing customer reach.

- Missed Opportunities: Resources tied to drop-off SKUs can hinder investment in high-demand products.

How to Identify Drop-off SKUs? Let's see-

- Analyse Sales Data: Track sales velocity and return rates using platform analytics.

- Monitor Trends: Use tools to compare SKU performance against competitors.

- Check Customer Feedback: Negative reviews can indicate product-market fit issues.

- Assess Inventory Metrics: Identify SKUs with high inventory days or frequent stockouts.

Practical Solutions:-

- SKU Rationalisation: Review and discontinue underperforming SKUs.

- Bundling & Promotions: Pair slow movers with bestsellers to boost visibility.

- Product Refresh: Rebrand or reformulate based on customer feedback.

- Optimise Listings: Enhance product images and descriptions for better discoverability.

- Collaborate with Platforms: Work with managers to explore co-marketing for at-risk SKUs.

- Leverage Data-Driven Insights: Use analytics for informed decisions on inventory and promotions.

Conclusion:-

Removing drop-off SKUs is essential for brands to maintain agility and competitiveness. By focusing on high-performing products, brands can improve visibility, streamline operations, and foster sustainable growth in the quick commerce landscape. Every SKU must earn its place, ensuring healthy margins and continued relevance on platforms like Zepto, Blinkit, and Swiggy Instamart.

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