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Stock keeping units (SKUs) are alphanumeric codes given to products that help brands and retailers manage, track, and optimize their inventories.
At the most basic level, SKUs help retailers keep track of their products across departments and store locations. Organizations create custom SKUs for their products, which allows them to stay organized and identify products efficiently.
SKUs typically align with the department and category in which the product lives. For apples, for example, a retailer might assign a SKU that signals both “food” and “produce” to clearly indicate where the apples are shelved.
By giving a business a clear, organized way to gain insight into their products, SKUs can also help retailers track and manage sales. This enables them to adjust stock according to sales trends, better understand consumer interaction with products, and adjust their merchandising or store layout to best meet the needs of their customers.
SKUs also allow employees to quickly look up a product to give customers details such as how many units are currently in stock.