In prior posts we’ve discussed the varying definitions of the Key Value Item (KVI) in retail.  Setting aside the important differences, the core principle remains: KVIs are the most important SKUs in the assortment.  And these items often warrant special treatment: competitive price monitoring, out-of-stock warnings, and other automated pricing monitoring.

We’ve worked with many retailers to build and maintain a list of their KVIs as top priority SKUs.  And while every retail sector has its own specifics, there are a few general themes that can help identify your KVIs.

SKU-Level:

• Must be high coverage (Stores selling)
• Exclusive or Private Label, if applicable
• Whether Price Constraints apply (MAP or otherwise)

Category:

• Share vs. Competition, if available
• Trend (Comps and Share)
• Frequency of Shop

Financials:

• GM %: useful to monitor, but does not bear on whether is a KVI
• Markdown Frequency and Depth: KVIs are not typically hi/low priced
• Advertised vs. Unadvertised discounting mix

Velocity

• Total Sales, as a measure of importance
• Seasonality (peak to average): useful to diagnose trends

Customer:

• High Breadth of Customers
• High Customer Item Frequency relative
• Customer Research Levels (from web metrics)
• Lead Item % (from transactions, web, or survey)

Elasticity

• Base Price elasticity
• Promotion elasticity

Within each of these categories there’s the work of finding the actual datasets, metric calculations, balancing, and validation of the resulting lists to be done.  Give us a shout, we’d love to help.