SP Richards

SP Richards

2012 Category Rationalization Review

SP Richards

Presented To: David Tapia Kimberly DuMont

SP Richards

AgendaSP Richards

• Current Category Challenges

• Current Market Dynamics

• Category Rationalization “Best Practices”

• HSM’s Approach to “Best Practices” Methodology & Approach

• The Process

Customer Analytics

Category Segmentation Product Class & Sub Class

Quantifying The Impact

• Customer Analytics Review

• Product Class & Sub Class Review & Recommendations

• Overall Impact Summary

• Marketing & Catalog Management

• Next Steps

SP Richards

Current Category ChallengesSP Richards

•Too many options especially at the low end with limited differentiation.

•This is leading to cannibalization and an inability to maximize inventory investment

Over Assorted•Program

s have been largely driven by back end monies resulting in degrading net profitability especially on items where the market will not hold higher MSRP’s

List Cost Price Compression

•Category lacks any meaningful segmentation of products structured around product classifications and a “Good, Better Best” Strategy.

Product Segmentation

•Due to the need to meet the market demand and balance that against inventory investments, the offering readily available to end consumers is somewhat limited.

Limited Offering at the Professional

Level

SP Richards

Current Market DynamicsSP Richards

40% Compression

of the Outsourced

Shred Service Industry

Increased Awareness of the

Value of Recyclable Waste

30% Increase Year over Year in Second &

Third Generation

Buyers

Higher

Qual

ity

Higher Capacity

Recycling Solutions

HSM can provide solutions that will unlock the entire market potential

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Category RationalizationBest Practices - Critical Elements

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• Lifecycle Management- Process should incorporate an overall Lifecycle management approach.

• Meet Consumer Demand- Solution must be able to continue to meet consumer demand accross all segements of product.

• Minimize Canabilization – Rationalization should be constructed in such a way as to avoid canbilization.

• On Going Product Availability- Chosen suppliers should be able to have a demostrated ability to provide on going availabity to all products.

• Inventory Reduction- Process should incorporate a demonstrated way through which inventory savings can be realized through both sku reduction & migration of certain slow moving items to a virual drop ship enviroment.

• Market Share & Profitability Gains- Program should be constructed in such a ways to provide demonstrated uplift to both market share and net profitabilty.

Source Data: “Best Practices in Sku Rationalization” Aldata Corporation

SP Richards

Category RationalizationHSM’s Approach to The Critical Elements

SP Richards

• Lifecycle Management- On going trend analysis and customer analytics support.

• Meet Consumer Demand- A comprehensive product offering covering all product catergory segements.

• Minimize Canabilization – Proven rationalization methodology inclusive of product calssifications and sub classes designed to segement product in a meanigful way to avoid caniablization.

• On Going Product Availability- Signficant manufacturing depth and expertise with fully verticaly intergrated manfacturing within 3 owned plants in Germany and 2 JV manufacting plants in China.

• Inventory Reduction- Comprehesive Virtual Warehouse drop ship program through which additional market share gains can be realized with zero inventory investment.

• Market Share & Profitability Gains- Our strong MSRP‘s and our avoidance of large back end loading will maximize the net profitabilty accross our entire product portfolio.

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Category RationalizationMethodology & Goals

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“Getting There- The HSM Catregory Rationalization approach was developed by compiling and analyzing data on all available products, end consumer buying behaviors, and existing product segementation methodoligies reulting in a focused approach towards catergory rationalization that incoprorates all of todays well known “Best Practices“, and provides the platform through which on going cost operational reduction, enhanced profitability and sales goals can be acheived and quantified.

The ProcessCustomer Analytics

•Provides benchmark Vs the overall market by Unit.

•Measure product Lifecycles

• Determines key areas for opportunity and change.

Product

Analysis

•Identifies GAPS

•Uncovers areas for up sell opportunities.

•Aids in managing price progression.

• Allows for product classifications and segmentation.

Impact & Assessment

•Quantifies impact based on all known factors.

• Provides the customer with a calculator to estimate overall impact

On Going Management

•Product Lifecycle management.

•New product introductions.

•Quarterly Business Review Process

SP RichardsCategory RationalizationQuantifying Impact

SP Richards

New Item Adds“Incremental Sales”

Up Sell Opportunities“Migrating Demand”

Inventory Impact

The FormulaMeasure used: % of item to total HSM Sales

Calculation: % to total sales X customers total sales =___Net Impact to sales in %

Sales & margin be calculated by the customer using the supplied calculator.

The FormulaMeasure used: list price compare

Calculation: List price of up sell item - List price of deleted item Net Impact in % to sales

Sales & margin can be calculated by the customer using the supplied calculator.

The FormulaMeasure used: Total category increase or decrease

Calculation: Starting number of sku’s - Ending number of sku’s____Net Impact in %

Overall impact can be calculated by the customer using the supplied calculator.

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Category RationalizationCustomer Analytics – Performance by Sku Vs Market

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Model MachinesHSM 2009 vs 2010 Trend

HSM 12 month Rolling Unit sales %

SPR Percentage HSM unit

sales

Comparison

P36 4,5x30 200.00% 0.03% 0.15% 0.12%225.2 1x5MM OILER 173.45% 0.32% 0.30% -0.02%125.2 5.8 130.48% 1.62% 0.28% -1.34%B32 4,5x30 100.00% 0.32% 0.86% 0.54%390.3 5,8 82.02% 0.36% 0.26% -0.10%125.2 1x5mm OILER 74.64% 2.89% 0.88% -2.01%108C 3,9x30 36.28% 1.25% 0.77% -0.48%B24 5,8 34.26% 0.22% 0.11% -0.11%225.2 5.8 29.00% 0.36% 0.11% -0.25%108.2 5,8 25.49% 1.32% 1.14% -0.18%Shredstar X18 4x27 21.10% 11.22% 14.37% 3.15%225.2 3,9x40 20.56% 1.26% 0.39% -0.87%Shredstar X5 4x36 13.44% 7.05% 70.64% 63.58%104.3 5,8 2.53% 0.64% 1.59% 0.95%B24 4,5x30 -9.40% 0.16% 0.32% 0.16%390.3 3.9x40mm -10.94% 1.08% 0.69% -0.39%125.2 3,9x30 -11.44% 0.85% 0.30% -0.55%412C 3,9x50 -14.81% 0.03% 0.34% 0.30%104 3,9x30 -16.10% 1.90% 1.70% -0.20%Shredstar Mutlishred -33.39% 1.66% 4.37% 2.71%105.3 3,9x30 -36.23% 0.26% 0.21% -0.06%B34 5,8 -39.81% 0.03% 0.24% 0.21%

TOTALS 100.00%

HSM-SPR Unit Sales Analysis

Model MachinesHSM 2009 vs 2010 Trend

HSM 12 month

Rolling % Dollar sales

SPR Percentage HSM Dollar

sales

Comparison

P36 4,5x30 202.08% 0.25% 2.80% 2.55%125.2 5.8 130.24% 3.41% 1.39% -2.02%B32 4,5x30 100.00% 0.94% 4.62% 3.68%390.3 5,8 94.91% 1.74% 2.53% 0.79%125.2 1x5mm OILER 75.28% 11.86% 10.33% -1.53%225.2 1x5MM OILER 59.15% 4.46% 5.25% 0.79%B24 5,8 38.35% 0.43% 0.39% -0.03%Shredstar X5 4x36 32.72% 1.08% 18.63% 17.55%225.2 5.8 32.01% 1.29% 0.85% -0.45%108C 3,9x30 26.93% 2.27% 2.89% 0.62%Shredstar X18 4x27 25.72% 5.50% 13.03% 7.53%225.2 3,9x40 22.85% 5.03% 3.59% -1.44%108.2 5,8 22.32% 1.89% 3.33% 1.44%104.3 5,8 -1.57% 0.69% 3.57% 2.89%390.3 3.9x40mm -7.89% 6.04% 7.61% 1.57%B24 4,5x30 -10.48% 0.43% 1.55% 1.12%104 3,9x30 -15.91% 2.51% 4.98% 2.46%125.2 3,9x30 -17.97% 2.30% 1.71% -0.59%412C 3,9x50 -24.81% 0.36% 6.79% 6.43%Shredstar Mutlishred -32.42% 0.38% 2.06% 1.68%105.3 3,9x30 -37.65% 0.38% 0.59% 0.20%B34 5,8 -47.13% 0.12% 1.54% 1.41%

TOTALS 100.00%

HSM-SPR Dollar Sales Analysis

= Key area of opportunity

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Category RationalizationCustomer Analytics – Performance of Recommended Items

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Model MachinesHSM 2009 vs 2010 Trend

HSM 12 month Rolling Unit sales %

SPR Percentage unit sales

Comparison Model MachinesHSM 2009 vs 2010 Trend

HSM 12 month

Rolling % Dollar sales

SPR Percentage unit sales

Comparison

Shredstar S10 NEW 0.72% Shredstar S10 NEW 0.12%C8A0 NEW 0.30% C8A0 NEW 0.13%C680 NEW 0.26% C680 NEW 0.09%BS25S NEW 0.39% BS25S NEW 0.19%B32 3.9 1075.00% 0.21% B32 3.9 813.10% 0.49%386.2 3,9 112.70% 0.10% 386.2 3,9 141.81% 0.35%386.2 3,9x30 91.40% 0.27% 386.2 3,9x30 91.80% 1.06%B34 4,5x30 -16.94% 0.11% B34 4,5x30 -7.98% 0.91%P40 NEW 0.02% P40 NEW 0.01%P40C NEW 0.01% P40C NEW 0.01%P44 NEW 0.01% P44 NEW 0.01%P44C NEW 0.01% P44C NEW 0.01%B24L6 NEW 0.24% B24L6 NEW 0.70%B34L6 NEW 0.10% B34L6 NEW 0.02%P36S NEW 0.01% P36S NEW 0.01%P36 L6 NEW 0.01% P36 L6 NEW 0.30%P36L6OMDD 1.00% 0.50% P36L6OMDD 1.05% 1.05%

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Category RationalizationProduct Class & Sub Class Creation

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Classificatiion Guide Priority 1 Priority 2 Priority 3 Priority 4Color Code Class Sub Class Users SECURITY LEVEL CUT TYPE SHEET CAP RUN TIME GALLON CAP

1-2 S SH CAP <183 CC SH CAP <13

4-5 MC SH CAP <101-2 S SH CAP >183 CC SH CAP >14

4-5 MC SH CAP >111-2 S SH CAP >193 CC SH CAP >14

4-5 MC SH CAP <141-2 S SH CAP <393 CC SH CAP >20

4-5 MC SH CAP >151-2 S SH CAP >403 CC SH CAP >30

4-5 MC SH CAP >16Deskside 1-2 SH CAP <7 G CAP <7

Small Office 1-3 SH CAP <7 G CAP <9Office 1-6 SH CAP <15 G CAP >10

Large Office 6-11 SH CAP <15 G CAP >20Departmental 12 Plus SH CAP >15 G CAP >28

ShredderShredder-Baler

If a shredder's specifications fits into 4 out of 4 priorities it is placed into that class/sub class. 3 out 4 priorities must be met when placing a unit into a Class/sub class

run time <10 min G CAP <7

run time >11 min G CAP <9

G CAP >10

G CAP >20

G CAP >28

NA

Continuous Duty

Continuous Duty

Continuous Duty

Continuous Duty

Continuous Duty100 PlusAll12 Plus 1-4

6 HS

6 HS

Deskside

Small Office

Office

Large Office

Departmental

Personal

Personal

Multi-User

Multi-User

Multi-User

Personal HS

Multi-User HS

Mulit-User IND

1-2

1-3

1-6

6-11

12 Plus

Buying GuideGroup FeaturesGood Stacked Built cutting system and/or duty cycle less than or equal to 10 minBetter Stacked or Solid Steel cutting system with limited duty cycle above 10 MinBest Solid steel cutting system with continuous duty motors and full TAA compliance HS HS High Security – same features as best category and are EPL listed by the NSAIndustrial Industrial-large capacity, Continuous Duty with recycling ablilities

(to be replaced with buying guide page)

SP RichardsCategory Rationalization RecommendationsPersonal Desk side Product Class

SP Richards

SPRPersonal Deskside

Mfg Part Number Model Cut Type Sheets Cycle Waste Bin Price Group Impact & BenefitStrip Cut

Add HSM S10 s 10 5 4.3 $142 Good

Will provide increased catergory sales of approx .12% by adding a entry level price point. Impact estimate based upon currnet HSM sales trends as a % to current total sales.

GBC SWI 1757250 s 12 2 5.5 $169 Good Cross Cut Good

HSM HSM 1004 X5 c 7 10 3.6 $96 Good Fellowes Fel 3224905 P-48C c 8 5 4.75 $135 Good

Delete GBC SWI 1758581 c 7 2 3.2 $149 Good Migrate demand to $155 price point same specs resulting in a 4% pick up in top line revenue based on list price.

CCS CCS 60062 60062 c 8 6 3.2 $155 Good Delete Fellowes FEL 3225901 P-58Cs c 9 5 5 $163 Good

Delete Fellowes FEL 3205001 DS-2 c 8 4 4.8 $170 Good

Add HSM C8AO c 10 5 6.6 $170Good

Fellowes FEL 3028002 HD-10Cs c 10 8 5 $185 Good HSM HSM 1001 c 8 10 1 $188 Good

Fellowes FEL 3271301 PS-12Cs c 12 5 4 $230 Good

Delete CCS CCS 60061 60061 c 8 12 4 $230 Good

Fellowes FEL 3011001 DS-1 c 11 5 4.75 $270 Good Delete GBC SWI 1757392 c 10 4 6.5 $349 Good

GBC SWI 1757390 c 12 3 5 $350Good

Micro Cut Good

Add HSM C680 Micro 7 5 6.6 $180 Good Will provide increased catergory sales of approx .09% by adding an entry level price point for the Micro cut buyer.

CCS CCS 60075 60075 Micro 6 6 4.2 $379 Good GBC SWI 1757395 Micro 7 4 8 $399 Good

Delete Fellowes FEL 3240501 MS-460Ci Micro 7 10 4.8 $420 Good

CCS CCS 60076 60076 Micro 10 10 8.6 $518 Good

Migrate demand from P58CS & DS-2 provides to the C8AO the consumer with higher sheet capacity & same run time. Impact on top line sales is approx. 2% assuming 50% of demand is presently split between both sku's. C8A0 is presntley .13% of total HSM sales and 0.30% of total units.

Migrate demand to PS12Cs higher sheet capacity will provide the ability to capture larger share of 12 sheet buyer market while reducing inventory carrying costs.

Consolidate demand into the 12 sheet Swingline model very similar specs will provide the consumer with added value while reducing inventory requirements.

Migrate demand to the CC60076 and create better price separation while increasing top line sales by approx 23% over the MS460CI

SP Richards

Category RationalizationClass & Sub Class Recommendations ImpactPersonal Desk side

SP Richards

Inventory Impact

Net impact of adopting all changes will result in a 16.67% reduction in overall sku’s within the product class. Total sku reduction is 3 items.

Sales & Impact

Up Sell - Sales increases at the sku level will be between 4%- 23% based migrating demand to the next closest price point with similar specs.

New Item Adds- 0.34% pick up in overall shredder sales based on HSM‘s trends for these models as a % to overall sales.

Margin Impact

Increased margins and higher average order sizes will be achieved based upon demand migration to slightly higher price points.

SP RichardsCategory Rationalization RecommendationsPersonal Small Office Product Class

SP Richards

Personal Small OfficeMfg Part Number Model Cut Type Sheets Cycle Waste Bin Price Group Impact & Benefit

Strip Cut

Add HSM BS25S s 25 6 7.1 $369 Good

Balances the sub class by providing Good, better, Best Segmentation while providing the platform for increased market share due to the lower enetry level price point. Item is presently 019% of total HSM sales and 0.39% of total units

Fellowes FEL 3238301 SB-83i s 18 20 7 $440 BetterHSM 1043 s 24 Continuous 8.7 $757 Best

Cross CutHSM BS12015 c 15 15 7.1 $319 BetterHSM X18 c 18 10 7 $375 BetterHSM BS820A c 16 20 7.1 $465 BetterGBC SWI 1757571 c 100 10 8 $499 GoodCCS CCS 60060 60060 c 30 25 8 $499 Better

HSM BS820B c 17 20 7.1 $499 BetterHSM 1043cc c 14 Continuous 8.7 $998 BestHSM 1053CC c 14 Continuous 8.7 $1,188 BestHSM B24C c 19 Continuous 9 $1,494 Best

Micro CutGBC SWI 1758496 Micro 12 4 8 $659 Good

SP Richards

Category RationalizationClass & Sub Class Recommendations ImpactPersonal Small Office

SP Richards

Inventory Impact

Net impact of adopting all changes will result in an increase of 8.3% or 1 sku. The carrying costs for these additional will be offset by the anticipated sales pick up associated with these items.

Sales & Impact

Up Sell- None identified for this product class

New item Adds- 0.19% pick up in overall shredder sales based on HSM‘s trends for these models as a % to overall sales.

Margin Impact

Margin should remain neutral or have a slight pick up based on the addition of the BS25S

SP RichardsCategory Rationalization RecommendationsMulti User Office Product Class

SP Richards

Mfg Part Number Model Cut Type Sheets Cycle Waste Bin Price Group Impact & BenefitStrip Cut

HSM 1082 s 24 Continuous 13 $1,009 Bestadd HSM B32S s 24 Continuous 21.7 $1,492 Best

Delete Fellowes FEL 3440501 2127s s 21 Continuous 26 $1,799 Best

HSM 1252 s 30 Continuous 20 $1,861 BestFellowes FEL 3830001 C-325i s 24 Continuous 22 $1,999 Better

Add HSM 386.2 s 24 Continuous 31 $2,352 Best

Will drive incremental sales and have a positive impact on average order size Units is presently 0.35% of HSM total sales and .10% of total units.

Cross CutGBC SWI 1758585 c 18 Continuous 13 $949 BetterGBC SWI 1758605 c 20 Continuous 19 $1,249 Better

Delete HSM 1082cc c 14 Continuous 13 $1,262 Best

HSM B32C c 19 Continuous 21.7 $1,722 BestDelete Fellowes FEL 340101 2127C c 14 Continuous 26 $2,099 Best

HSM 1252cc c 18 Continuous 20 $2,175 BestFellowes FEL 3831001 C-325Ci c 22 Continuous 22 $2,299 BetterFellowes FEL 38385 C-385C c 16 Continuous 31.6 $2,499 Better

Add HSM 386.2cc c 18 Continuous 31 $2,876 Best

GBC LX19-42 c 19 Continuous 42 $3,050 BetterMicro Cut

GBC SWI 1770070 mc 11 Continuous 13 $1,579 BetterHSM B32CL4 mc 13 Continuous 21.7 $1,899 Best

Fellowes FEL 3440901 2127M mc 12 Continuous 16 $2,399 BestGBC SWI 1770065 mc 9 Continuous 30 $4,075 Better

Multi Use Office

Migrate demand to the HSM 1252 higher sheet capacity better value for the consumer. Impact on top line sales of approx. 3.45%

Migrate demand to the HSM B32 creating better price separation in this class and increasing top line by approx. 36.45% Market share increase of .05 % based on current HSM sales trends

Migrate demand to HSM 1252 provides added value to the consumer due to higher sheet capacity impact to top line revenue 3.62% on current demand.

Will provide the platform for up sell opportunities to a "Best" product in this class with a corresponding impact of approx. 15.09 % to top line revenue by migrating demand from the C385C. Incremental Sales impact will be 1.06% of total shredder sales based on the HSM internal sales as a % to total sales.

SP Richards

Category RationalizationClass & Sub Class Recommendations ImpactMulti User Office

SP Richards

Inventory Impact

Net impact of adopting all changes will result 0% change to total sku count.

Sales & Impact

Up Sell- Sales increases at the sku level will be between 3.45%- 36% based migrating demand to the next closest price point with similar specs.

New Item Adds- 1.46% pick up in overall shredder sales based on HSM‘s trends for these models as a % to overall sales.

Margin Impact

Margin will remain constant as a % but overall margin dollars will increase based on the migration to higher priced items.

SP RichardsCategory Rationalization RecommendationsMulti User Large Office Product Class

SP Richards

Mfg Part Number Model Cut Type Sheets Cycle Waste Bin Price Group Impact & BenefitStrip Cut

HSM B34S s 26 Continuous 26.4 $2,265 Best

Delete Fellowes FEL 38380 C-385 s 28 Continuous 31.6 $2,299 Better

Fellowes FEL 3404001 2331s s 30 Continuous 32 $3,449 Best

Add HSM P36S s 39 Continuous 38.3 $5,355 Best

Incremental sales impact based on current HSM numbers is .01%. Since this is a brand new item full sales impact cannot be calculated at this time.

Cross CutGBC SWI 1770045 c 20 Continuous 30 $2,449 Better

Add HSM B34C c 22 Continuous 26.4 $2,574 BestIncremental sales impact of approx 0.91% based on current HSM trends as a % to sales.

HSM 2252cc c 27 Continuous 28 $3,121 BestFellowes FEL 3403901 2331c c 25 Continuous 32 $3,799 Best

HSM 3903cc c 27 Continuous 39 $4,162 BestGBC SWI 1758583 c 30 Continuous 55 $4,375 Better

Multi User Large Office

By migrating demand to the B34S you will provide a "Green" product solution in the category based on the Energy Management system which should result in increase share within this group and normalize your offering with that of your primary competitor. Sales & margin omact should be flat.

SP Richards

Category RationalizationClass & Sub Class Recommendations ImpactMulti User Large Office

SP Richards

Inventory Impact

Net impact of adopting all changes will result in a 12.5% increase or 2 sku’s.

Sales & Impact

Up Sell- None identified for this product class

New item Adds- 1.41% pick up in overall shredder sales based on HSM‘s trends for these models as a % to overall sales.

Margin Impact

Margin will remain constant as a % but overall margin dollars will increase based on new item sales.

SP RichardsCategory Rationalization RecommendationsMulti Departmental Product Class

SP Richards

Multi DepartmentalMfg Part Number Model Cut Type Sheets Cycle Waste Bin Price Group Impact & Benefit

Strip CutHSM 2252 s 42 Continuous 28 $2,768 BestHSM 3903 s 42 Continuous 39 $3,567 Best

Add (virtual) HSM P40S s 60 Continuous 40 $5,888 Best

Add (virtual) HSM P44S s 78 Continuous 55 $6,999 BestCross Cut

HSM HSM1853 P36C c 31 Continuous 38.3 $6,399 BestAdd (virtual) HSM P40C c 37 Continuous 40 $7,299 Best

HSM HSM 4112cc c 40 Continuous 38.5 $7,373 BestAdd (virtual) HSM P44C c 46 Continuous 55 $8,599 Best

By adding the P40 & P44 Series you will extend the price range of this product class and will be positioned to provide high the highest available sheet capacities available addressing the transitional needs of small business moving from the outsourced shred service environment. By adding this in a virtual drop shop program will mean no impact to current inventory and valuable sales data can be gained from which a s future stocking position can be determined.

SP Richards

Category RationalizationClass & Sub Class Recommendations ImpactMulti Departmental

SP Richards

Inventory Impact

Net impact of adopting all changes will result in no impact to inventory as all recommendations are based on a Virtual Warehouse Drop Ship approach

Sales & Impact

New market development items for emerging and growing demand resulting from shred service migration. Net sales impact is unable to be determined at this time.

Margin Impact

Increased margins in both % in dollars as many of these items do not have competing items in the market today.

SP RichardsCategory Rationalization RecommendationsNSA Approved High Security Level VI Product Class

SP Richards

NSA Approved High Security Level VIMfg Model Cut Type Sheets Cycle Waste Bin Price Group Impact & Benefit

Add HSM B24L6 HS 8 Continuous 9 $2,600 HS

Add HSM B34L6 HS 12 Continuous 26.4 $4,400HSM 1252L6BNDL HS 7 Continuous 20 $5,300 HSHSM HSM 2252L6BNDL HS 8 Continuous 28 $7,087 HS

Add (virtual) HSM P36L6 HS 14 Continuous 38.3 $10,300 HS

Up sell opportunity to HSM 225. Demand seems to be migrating to this model due to the built in automatic oiler and Energy Management system.

Add (virtual) HSM P36L6 OMDD HS 14/2500 Continuous 38.3 $13,000 HS

Exclusive mutli function machine for both paper & optical media. Sales growth of his units has been 22% month in the first 6 months since it's introduction.

Provides entry level price point product within the HS class not previously available. Early growth estimates of this product are 42% in incremental volume to the overall HS category. Approx 2% of overall sales.

SP Richards

Category RationalizationClass & Sub Class Recommendations ImpactNSA Approved High Security

SP Richards

Inventory Impact

Net impact of adopting all changes will result in a 100% increase in overall sku’s within the product class. Total increase is 2 items. Carrying costs will be offset by higher sales within the product class.

Sales & Impact

Up Sell - Sales increases at the sku level will result in a sales pick up of 42% - 56% within the high security category.

New Item Adds - Overall shredder category sales will increase by 2% based on HSM’s internal data as a % to total sales.

Margin Impact

Increased margins dollars & % as a result of new sku introductions with limited/no competition.

SP Richards

Category RationalizationSummary of Total Impact

SP Richards

Overall Inventory Impact

Net impact of all changes:

0% change to overall sku count category is 56 items in total.

Overall Sales & Impact

Up Sell- Sales increases at the sku level will be between 3.45%- 56% based on migrating demand to the next closest price point with similar specs.

New Item Adds- 5.4% pick up in overall shredder sales based on HSM‘s trends for these models as a % to overall sales.

Overall Margin Impact

Increased margins should be realized based on better list to cost spread coupled with increased demand.

Total net impact can be calculated by completing the provided impact calculator

SP Richards

Thank you!

SP Richards