Do you know 80/20 rule of Merchandising?

The 80/20 rule, also known as the Pareto principle, is a concept that can be applied to merchandising. The rule states that 80% of the effects come from 20% of the causes. In merchandising, this means that 80% of the sales come from 20% of the products.

The 80/20 rule can be used to prioritize merchandising efforts and resources. By identifying the 20% of products that are responsible for 80% of sales, merchandisers can focus their efforts on optimizing those products and ensuring that they are displayed prominently and effectively. This can include strategies such as optimizing the product's pricing, promoting the product through marketing and advertising, and ensuring that the product is in stock and easily accessible to customers.

At the same time, merchandisers can also identify the 20% of products that are responsible for 80% of costs or problems, such as high returns or low profitability. By identifying these products, merchandisers can work to improve the product's quality, reduce costs, or discontinue the product altogether.

Overall, the 80/20 rule can be a useful tool for optimizing merchandising efforts and ensuring that resources are allocated effectively to drive sales and improve profitability.