Assortment Rationalization: The Step-by-Step Method

ShopperExperts · August 20, 2026

We've written about the signs your assortment needs attention. This is the method itself — the sequence we run in category projects, compressed to its skeleton.

Step 1–2: One Dataset, Honest Costs

Twelve months of sales by SKU by channel, with real landed costs and, where available, cost-to-serve. Contribution dollars per SKU, not margin percent (the math refresher covers why). Half the value of rationalization is forcing this dataset to exist at all.

Step 3: Rank Within Role, Not Overall

Ranking the whole portfolio in one list kills every niche item that serves a purpose. Rank within role: core velocity drivers against each other, margin items against margin items, traffic and line-completers against their own kind. An item fails when it underperforms its role, not when it loses to the flagship.

Step 4: The Four Verdicts

• Fix — distribution or execution problem, not a product problem. Close the voids first; judge again next quarter.
• Reprice — contribution failure at current price; one honest increase often rehabilitates it.
• Keep knowingly — earns its loss strategically (blocks a competitor, completes a line a key account demands). Now it's a decision with an owner, reviewed annually.
• Cut — and mean it: sell-down plan, customer notice, deletion date. A cut that lingers half-stocked for a year costs more than keeping it.

Step 5–6: Translate to the Shelf, Then Hold the Line

The surviving assortment becomes a planogram built from real fixture measurements — the cut isn't real until the facing is reassigned. Then the discipline that keeps the work done: one-in-one-out for every launch, and a quarterly velocity review so the tail never silently regrows. Run once, rationalization is a project; run quarterly, it's a competence — and it's the one buyers notice.