Covid disruptions have taught many brands an important lesson: when it comes to the number of SKUs, oftentimes less is more. For decades prior to Covid, most brands kept adding SKUs to their mix, offering variations on the core product to entice customers to buy more or more often. Often, this resulted in a cluttered store shelves and didn’t substantially add to the overall sales, instead just dividing sales across more SKUs and adding costs to operations.
Research has shown that after a certain (and relatively early point), additional SKUs don’t add to sales and in fact, can even cause enough confusion that customers may walk away or choose another brand. As you consider expanding offerings, ask yourself if whatever is different about the new product truly warrants a new SKU. If the estimate isn’t higher than your median SKU’s average sales, it’s probably not worth the expense and distraction of the additional SKU. Instead, consider how that feature may be incorporated into the existing products to provide a delightful upgrade to buyers and keep them in your brand franchise.