Assortment Size Revisited
How much to expect from a larger range?
Assortment size variation shows a similar impact across categories
A linear regression on thousands of Top 10 brands indicates that an additional SKU increases relative penetration by 0.38% on average. The effect is consistent across categories but strongest in beverages and weakest in food. Although both average around 13 SKUs per brand, higher purchase frequency in beverages increases the likelihood of an extra SKU ending up in a shopping basket.
Assortment has greater impact in infrequently purchased categories
The incremental reach from an additional SKU is highest where purchase frequency is low. On average, brands in low-frequency categories (<5 purchases per year) carry only 10 SKUs, compared with 23 SKUs in high-frequency categories (>10 purchases per year). As a result, adding one more SKU in low-frequency categories delivers a disproportionately larger impact.
Range expansion benefits smaller brands more
While each SKU contributes more absolute reach for large brands, adding one SKU is relatively more impactful for small brands. With an average of 8 SKUs, a single addition expands their range by over 10%. For large brands, averaging 36 SKUs, the same addition increases their range by less than 3%.
