Meaning of Item Hierarchy Level?

Item hierarchy level refers to the level of classification or grouping of products in a hierarchical structure. In retail businesses, this hierarchy can include various levels such as department, category, subcategory, and individual product. Each level represents a more detailed and specific classification of the products.

For example, at the highest level, products might be classified into departments such as electronics, apparel, and home goods. Within the electronics department, products might be further classified into categories such as TVs, computers, and cameras. Under the TVs category, there might be subcategories such as LCD, LED, and plasma TVs. Finally, at the lowest level, there would be individual products such as a specific model of a 55-inch LED TV.

The item hierarchy level is important because it allows retailers to manage their inventory, sales, and promotions more effectively. By grouping products into logical categories and subcategories, retailers can analyze sales data and make informed decisions about which products to stock, how to price them, and how to promote them to customers. It also allows for better organization and navigation of products for both customers and employees.

 See the below structure & description for your reference:

Benefits:

The benefits of item hierarchy level in retail business are as follows:

Better organization and management of inventory: Item hierarchy level provides a logical and organized structure for inventory management. By grouping products into departments, categories, and subcategories, retailers can easily track and manage their inventory.

Improved sales analysis and decision-making: With item hierarchy level, retailers can analyze sales data at different levels of granularity, from department level to individual product level. This helps retailers to identify trends and patterns in customer behavior and make informed decisions about pricing, promotions, and inventory management.

Efficient pricing and promotion strategies: By grouping products into different levels of hierarchy, retailers can set prices and promotions that are appropriate for each level. For example, retailers might offer discounts on all products within a particular category or subcategory, or they might offer a bundle promotion on specific products within a category.

Enhanced customer experience: Item hierarchy level allows retailers to present products in a logical and organized way, making it easier for customers to find what they are looking for. This improves the overall shopping experience and can lead to increased customer satisfaction and loyalty.

Better inventory forecasting and replenishment: Item hierarchy level helps retailers to forecast demand and plan inventory replenishment more effectively. By tracking sales data at different levels of granularity, retailers can identify which products are selling well and adjust their inventory levels accordingly.

Overall, item hierarchy level is a key tool for retail businesses to manage their inventory, analyze sales data, and make informed decisions about pricing, promotions, and inventory management. It also helps to improve the customer experience and increase customer satisfaction and loyalty.

To create the Item Hierarchy, do the following steps in HQ:

Step 1: Go to MDM > Attribute Master Management > Item Attribute Master

Step 2: Click on Add button to add new Category or click on Edit button to edit an existing category.

Step 3: Fill up all the details to create a Major Category.

Type = Select category to create category or select Attribute to create Attributes.

Attribute Name = This will be used for putting Category Name.

** Note: Category or Attribute(Name) Starting Letter Must Be Character(a-z or A-Z)

Allow List = It means whether multiple lists can be created in case of Attributes.

Attribute Data Type = Select String / Numeric / Date from the list as per your need.

Status = Select Active or Inactive as needed.

Allow Value Entry In = Select HQ or Outlet as per needed.

Value Mandatory = Select Yes or No as needed.

Barcode Generation = Select Auto or Manual as needed.

Max Barcode Length = Put the length as you wish.

List Order = Put the order as you which.

Enable Hierarchy = Select Yes or No as needed. If Yes is selected the Category tree structure will be created.

Parent Attribute = Put the Parent category name if you wish to create the category tree structure.

Applies for Offer = Select Yes or No as needed.

Applies for Loyalty = Select Yes or No as needed.

Applied for Indent = Select Yes or No as needed.

Allow Coupon = Select Yes or No as needed.

Barcode Applies = Select Yes or No as needed.

Major Category = Select Yes or No as needed.

Step 4: Click on Update to update or create the category.

Conclusion:

Item Hierarchy or the Category Tree structure is the most important part while doing the Implementation of our HQ solutions. If we do it in the wrong way, it will create issues in the future.

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