PRODUCT CHAIN
Definition
Product chaining involves linking successive SKUs for the same product over time, despite changes in packaging, EAN codes, trade names, or internal SKUs.
The goal is to reconstruct a product's complete history in order to analyze trends in its prices, sales, and performance, even if its technical model number has changed.
Why it's important
- Analyzing long-term trends: without price indexing, it is impossible to compare a product’s sales over several years if its product code has changed in the meantime.
- Calculating reliable elasticities: To measure the impact of a price change, a continuous time series is required. Chaining reconstructs this time series even when data gaps occur.
- Managing product launches and relaunches: When a product is replaced by a new version (new packaging, new formula), tracking allows us to monitor the shift in sales.
Example
A laundry detergent brand is launching a new formula for its flagship product. The former "Laundry Detergent X 2L EAN 123" is being replaced by "Laundry Detergent X Eco 2L EAN 456." Without a product chain, the brand loses its price and sales history, which prevents any trend analysis.
Using chaining, the system identifies EAN 456 as the successor to EAN 123 (same brand, same format, launched at the same time the old one was discontinued). Historical data is linked, allowing for a comparison of performance before and after the change and enabling the pricing strategy to be adjusted accordingly.
Mistakes to Avoid
- Matching different products: confusing "Laundry Detergent X 2L" with "Laundry Detergent X Sensitive 2L" because their names are similar. Matching must be done rigorously to avoid these false positives.
- Ignore overlaps: sometimes, the old and new products coexist for a few weeks. The chaining must handle these transition periods.
- Do not document the chains: keep a record of the chains you create so that you can audit and correct them if necessary.
Key takeaways
Chaining is particularly critical in sectors where:
- Product lines are frequently updated (fashion, high-tech, cosmetics)
- Manufacturers regularly change their packaging (food, personal care)
- Retailers are transitioning their systems (ERP migration, store mergers)
Chaining relies on algorithms that cross-reference product attributes, launch and end dates, sales volumes, and prices to identify logical sequences.
Frequently Asked Questions
These articles can be of interest to you
Product matching is the foundation of competitive monitoring because it prevents the comparison of non-equivalent products. Reliable matching safeguards margins by basing repricing on real-time, multi-source data.
Key finding: According to the Diamart study, 50% of French retailers still consider this challenge to be unresolved.
An effective pricing strategy relies on a rigorous segmentation between image products (KVI) and margin drivers to maximize profitability. By balancing perceived value and competitive data, this approach can increase EBITDA by up to 15%. Clear governance and automated rules ensure consistent execution in the face of market fluctuations.
Artificial intelligence should never dictate pricing strategy. Its implementation requires the establishment of rigorous safeguards, such as price ranges and human validation, to protect financial margins. This combination of computational power and expert oversight transforms raw data into sustainable profitability without the risk of algorithmic drift.