Identifying Product Distribution Gaps
Analyzed store and competitor assortment data to uncover a high-margin product significantly under-distributed across the network.
The Challenge
A large retail organization operating thousands of stores across North America was constantly evaluating how to optimize its product assortment. Each location carried thousands of products across multiple categories, making it difficult for operational leaders to keep pace with emerging product trends and identify high impact opportunities. While leadership had access to sales data, they lacked a clear way to systematically identify high margin products that were under distributed across the network. As a result, some of the most profitable products were only available in a limited number of stores, leaving significant margin opportunity unrealized.
Our Approach
We analyzed product performance across the retailer’s network and benchmarked those results against competitor assortment and category trends. The analysis identified one product type with exceptionally high margins and strong sales velocity in locations where it was available. Despite this performance, the product was distributed in only a fraction of stores where it could legally and operationally be sold. We modeled the potential impact of expanding distribution and conservatively estimated a $3M gross margin opportunity by making the product available in additional stores where demand already existed. One year later, after the company expanded distribution, the realized impact reached $3.8M in gross margin, outperforming the original estimate. We also identified an additional $4M margin opportunity by recommending that the most profitable variant within the category be prioritized in store placement and expanded to all eligible locations.
The Result
The initiative demonstrated how targeted assortment optimization could unlock significant financial impact with minimal operational effort. Key outcomes included: • $3.8M in gross margin realized through expanded product distribution • Additional $4M margin opportunity identified through improved product placement and category optimization • Clear framework for identifying high margin products that were under distributed across the network What began as a quick analytical review ultimately revealed a scalable approach to identifying high impact assortment opportunities across thousands of locations.