Defining ‘complex categories’ in retail operations

Industry Insights / Defining ‘complex categories’ in retail operations
Our approach and solutions are designed to smooth the edges and round the corners of the retail edge cases. The tricky 5% of products all retailers carry that take up 95% of store effort and process. In this article we explore what we mean by 'complex categories' and how data governance and process controls can bring these edge cases closer to the norm.

When rascal refers to complexity in retail, we are referring to the specific challenges that arise from handling non-standard product categories. These complexities create a range of issues, from operational inefficiencies and increased cost-to-serve, not to mention headaches for end users.

95% of products that hit retailers’ shelves do so supported by structured, standardised supply chain processes - clean, simple, efficient. 

The remaining 5% of products handled by retailers are characterised by their own set of unique processes and data nuances. Within these complex categories, the non-standardised and fragmented approach makes consistency, compliance and efficiency hard to achieve. As a result, category management and governance is more challenging.

Complexity in retail will often translate to inefficiency - particularly on the shop floor. This inefficiency manifests in a higher shrink and risk profile, higher labour costs, and a material increase in the overall cost to serve.

With the management of non-conforming complex categories being more labour-intensive, it detracts from other critical value-driving activities such as replenishing stock to improve availability and sales, or paying attention to, and engaging directly with, customers who have come into the shop.

Without robust data processes and governance in place, retailers are left vulnerable to inaccuracies, which can exacerbate shrink and operational inefficiencies.

Our approach to complexity is specifically designed to address the unique challenges facing retailers trading complex, non-standardised categories, read more about it here.