What is shelf space for? "Black" and "white" merchandising: the war for shelf space

This is where we need to answer the question of what products and in what quantity should be presented on the available shelf space. Merchandising for a building materials store All assortment items (SKU) of any product group and brand can be divided into high-priority, main (main) and additional. The parameter for determination is the level of demand for a particular position among consumers. For example, orange and apple juices are sold four times more often than any other juice (regardless of its price category). These positions are called high priority. In the total number of SKUs of one brand, as a rule, they make up approximately twenty percent. The next group of SKUs are the main items that make it possible to retain shelf space.

Optimizing shelf space

Usually the gift is a new item or something “unliquid”. A variation of this method is bonus programs aimed at retail outlets with the “buy assortment - get a bonus” mechanic. Expanding the market through the creation of gift sets and gift certificates The creation of gift sets in itself is not a new thing. On the eve of the holidays (New Year, February 23, March 8), this marketing technique is used by many manufacturers.

I suggest looking at this sales promotion tool differently. The subtlety of the moment is that a buyer who knows or uses the brand purchases the product as a gift to another person who is not its consumer. That is, the gift set acts as a product promoter that attracts new people to the ranks of brand admirers.

Shelf share

Attention

Kristina Udalova Facing and SKU are two concepts that play a key role in setting distribution and shelf space goals. This article will be of particular interest to those who have a wide range of products and those who have already exhausted the possibilities of extensive sales development by increasing their customer base. If you look at the goals of most manufacturers operating in the consumer goods market, most often they are formulated quite simply: you need to sell X tons or get Y money in a certain period of time.

Expanding the customer base, increasing numerical distribution, expanding the assortment range in retail outlets, installing additional points of sale - all this is considered as tools to achieve one big goal. However, if you go down to the sales representative level, it is not always enough to voice a goal or sales plan.

Encyclopedia of Marketing

Important

Suicidal solutions with incorrect ABC-ABC-XYZ and ABCD analysis. And this is what they suggest doing even in books and in the TOP 10 links in Yandex! How to avoid losses and do everything right.

Prioritizing which product groups and products need to be developed to increase profitability. Which product groups need to be reduced and by how much?
“The range of this product includes 200 articles, but the buyer still complains that there is nothing to choose from.”

Depth and width of the assortment matrix. Calculation of boundaries and optimal values for the Category Tree. Or “how many SKUs/articles should there be in a category.”

Practice “Analysis of sales statistics to optimize assortment”

SUPPLIERS AND INVENTORIES

Strategies for working with suppliers. Multi-criteria supplier assessment.
Practice “Selecting from several suppliers with different conditions”
Turnover.

Assortment and organization of store shelf space

It is known that a person can perceive information quite consciously in a field that is 30 degrees from the point where his gaze is focused. If a person moves along the point of sale to study the assortment presented, then these conditional 30 degrees also move. If a company wants to occupy a visually dominant position at the point of sale, then it is necessary to fill a space exceeding 30 degrees with its products.
Within this space, incremental facing will have great effect. But the further we go beyond this space, the less effect each added face will bring. Therefore, sometimes companies set themselves the goal of achieving a specific number of faces at the point of sale of one brand.

Entrance

Typical complaints from merchandisers that sales department employees hear is the impossibility of expanding the range or displaying products. The arsenal of proven means of combating these phenomena contains techniques that are quite clean from a marketing point of view. Let’s not talk about buying market share (banal buying shelves), although if the company has the resources, this is the easiest and fastest way to conquer the market.
Let's approach the issue in a more original way. Legitimate Methods for Increasing Shelf Space Expanding Display at Promotions and Tastings For many suppliers, tastings can be an excellent method of convincing retailers to increase shelf space. With stores where tastings are held, it is easier for the supplier to agree on a temporary expansion of the assortment.

Shelf space management

Where to begin? Components of a project plan for the implementation (optimization) of a category management system.

Practice “Category budgeting for the break-even point and a given rate of profit”

How and when to change the assortment. Assortment strategy. How to determine your assortment. General or independent assortment matrix.
Application of the BCG matrix to prevent losses in profits.
Modern methods of assortment classification.
Dividing the assortment into categories, highlighting special role categories. Requirements for goods indicators, markers, indicatives, KVI. The dangers of the Front Basket and Back Basket approach.
Visual and tabular methods for analyzing sales statistics to optimize the assortment.

There is also another extreme: when the goal is high, but the company does not have enough product lines to occupy this area. In this case, serious work is required to increase facing and maintain existing positions, or adjust the shelf space goals downward. There are retail outlets where a large number of SKUs is a prerequisite for success, for example, a pharmacy, bookstore, auto parts. At the same time, the area of the sales floor does not always allow them to be placed all accessible to the buyer. What to do in such cases? Should we strive to place each position “facing the buyer” in a small area? In my opinion, in such product groups it is absolutely not necessary to display all the items on the display window.

Calculation of the cost of shelf space

Black merchandisers can also disrupt the display by putting new batches forward. Sellers may not notice that at the back of the shelf there are products with expiring expiration dates, which leads to an increase in the so-called “overdue period” and a decrease in the volume of orders from merchandisers.

Mixing price tags.
Re-hanging or removing the display of POS materials.

Illegal methods of increasing shelf space and discrediting competitors

Substitution of a product unit of an “incompatible” category into a competitor’s display. For example, a bottle of beer or cockroach repellent that appears out of nowhere on a baby food shelf will alienate some buyers of the brand next to which the “surprise” appeared.

When distributing shelf space by position, the percentage ratio will be 20:60:20. Next, when distributing shelf space, the number of facings is determined. To solve the problem of a uniform decrease of goods from the shelf, the correct arrangement of facing of assortment positions is required; the facing of priority positions must be greater than the facing of the main and additional ones.

If there is a large assortment of goods, complete facing is impossible, and then it makes sense to remove behind the counter those SKUs that are unlikely to be purchased on impulse, and put the goods of basic demand on the counter. There is a fairly wide range of products that are not sold without facing; in this case, the category manager is tasked with optimizing the assortment.

Kristina Udalova

Facing and SKU are two concepts that play a key role in setting distribution and shelf space goals. This article will be of particular interest to those who have a wide range of products and those who have already exhausted the possibilities of extensive sales development by increasing their customer base.

If you look at the goals of most manufacturers operating in the consumer goods market, most often they are formulated quite simply: you need to sell X tons or get Y money in a certain period of time. Expanding the customer base, increasing numerical distribution, expanding the assortment range in retail outlets, installing additional points of sale - all this is considered as tools to achieve one big goal.

However, if you go down to the sales representative level, it is not always enough to voice a goal or sales plan. These employees often need to be told what needs to be done to achieve the plan. Let's leave the issue of expanding the customer base aside and consider setting high-quality distribution goals (as many companies call goals for the presence of a certain number of items in retail outlets).

The saga of 6 acres (from the book "Modern Supermarket").

One man bought himself 6 acres of land and decided not to build a banal house-bathhouse-flowerbed on it, but to start a business. He went to the market, talked with the sellers and decided to grow and sell apples. No sooner said than done, I bought and planted an apple orchard on my 6 acres. The harvest was good, and in the fall the man earned a lot of money. But when he was selling his apples at the market, he noticed that pears were also popular. With part of the proceeds, the man purchased pear trees and planted them near apple trees. The next autumn came, pears (as well as apples) gave a good harvest. The man thought that expanding the range was a good idea. And bought cherry bushes. And he planted them between pear and apple trees... It is not difficult to guess that the next year his apples, pears, and cherries were the same size (as cherries). Therefore, he could not sell his apples and pears, and he did not earn much from the cherries.

Any gardener will tell you: you should have thought from the very beginning about what assortment you wanted to sell, then ask how much land is needed for each tree in order for it to bear fruit well, and, finally, not plant more than required on these 6 acres.

Store shelves very often resemble this picture, when merchandisers try to present too wide an assortment in a limited shelf space. This makes it difficult for the buyer to choose and reduces turnover. Let's figure out one by one how to maximize income per unit of shelf space.

Definitions.

SKU (Stock Keeping Unit, literal translation from English - stock holding unit) Essentially, this is an assortment item (a unit of one product group, brand, grade in one type of packaging of one container).

Example: the milk brand "Domik v Derevne" contains several assortment items: 0.5%, 1.5%, 3.2%, 3.5%, 6%, etc.

Facing is a unit of product that is visible (in self-service stores - accessible) to the buyer. Thus, each assortment item can occupy several facings at the point of sale. But it is necessary to distinguish between facings and product stock on the shelf for each position.

Setting goals for assortment– this is the determination of the number of SKUs that the manufacturer wishes to present at the point of sale. Assortment goals for different sales channels can differ significantly from each other. For what reason? Most often there are two of them. Firstly, the sizes of shelf space vary in different trading channels, and they are limited (there is a conditional 6 acres). Secondly, buyers come to different trading channels with different needs and assortment requirements. This is where you need to answer the question: what to present on the shelf?

All product line items (SKU) of each product group and brand can be divided into priority, main and additional. The determination criterion is the popularity of the position among buyers. Let's say orange juice and green apple juice sell 4 or more times more than any other juice. Moreover, regardless of the price category. Such positions are called priority. In the total number of SKUs of one brand, they usually make up about 20%.

The next group of SKUs are the main items that allow you to retain space on the shelf. The main assortment includes those items that have a consistently large number of regular customers. In the group of juices, such positions are most often tomato, cherry, pineapple, peach, and apricot. They make up about 60% of the total number of SKUs of the brand.

Additional positions have their loyal consumers and there are significantly fewer of them than consumers of the main and priority positions. The number of additional positions should not exceed 20%. Moreover, the fulfillment of this condition must be observed at the level of production planning in the first place.

Setting goals for shelf space– this is a determination of the number of faces that the manufacturer wishes to present at the point of sale.

It should be noted that facing has two functions: demonstration and shelf space retention function. Depending on the tasks that the manufacturer sets for itself, one of the functions comes to the fore.

The first and most obvious reason to set shelf space goals is to optimize turnover rate (shelf space retention function). Most often, such decisions need to be made for self-service stores, where the buyer is left alone with the product. The goal is to ensure a uniform loss of goods from the point of sale and ensure a probability close to 100% that each customer will leave with a purchase.

The primary and simple requirement should be the following: the facing of priority positions should be more than the facing of the main and additional ones. This will allow the product to leave the shelf evenly, which will reduce the labor costs of sellers and merchandisers to maintain the display.

In foreign merchandising practice there is the following rule: SPACE TO SALE. It says that the brand should occupy the same percentage of shelf space as it occupies in sales of all goods displayed in a certain area. If 1 package of plum juice sells 3 cherries and 10 oranges, then approximately the same proportions must be maintained in the faces so that all customers find the right product at any time they are in the store.

However, this is where fast-moving goods often fall into a bit of a trap. If priority positions are given as much space as they are entitled to in proportion, then perhaps there will simply be no room left for additional positions. Therefore, on the store shelf for the example above, we would most likely see 1 face of plum juice, 2 faces of cherry juice and 4 faces of orange juice. This adjustment is necessary to ensure that buyers of additional assortments also find their product. But you will have to “pay” for such an adjustment. The seller or merchandiser will need to replenish the stock of priority items more often. In the long term, this approach justifies itself in those stores where the emphasis is on a wide range. In other stores, the decision to reduce the number of SKUs in favor of increasing the facing of priority and main positions has a simple explanation. The lesser of two evils is chosen - it is better to lose one buyer of plum juice than to lose 6 buyers of orange juice.

It should be noted that sales analysis and shelf space allocation decisions are much more complex. What is SALE in the SPACE TO SALE rule? Some people mean market share, some mean a share in turnover, some mean a share in profit. In my opinion, it is necessary to take the share of profit (total margin) as a starting point.

The second reason for setting shelf space goals is to increase the visual perception of products at the point of sale (Visibility). Here, facing performs a demonstration function. From this point of view, this tool is necessary for all stores, regardless of the service mode.

What is a high visual perception of a product at the point of sale? This is the case when, when approaching a point of sale, the buyer first of all sees this specific product (brand block, packaging, etc.) From the point of view of the store, high visual perception allows customers to easily notice all the products present at the point of sale. To achieve this goal, various grouping and blocking techniques are used.

But the further we go beyond this space, the less effect each added face will bring. Therefore, sometimes companies set themselves the goal of achieving a specific number of faces at the point of sale of one brand. Since all packages of one brand most often have the same design style, that same spot of color is created that instantly attracts attention.

Facing or centimeter?

Let's say a company has set a shelf space goal of 50% of the product group. It is necessary to decide how the achievement will be assessed. There are two ways. The first way is to measure the size of the place of sale with a tape measure and calculate the percentage of your corporate block. The second way is to measure the number of faces at the point of sale and calculate the percentage of your corporate block. Let's figure out which way to use?

Let's look at an example.

How many product facings can be installed on sections 3 meters long with 5 shelves, if the facing width is 10 cm and if the facing width is 7.5 cm? If these two companies divide this area in half, then one company will be able to present 75 faces (1500cm/2/10 = 75), while the second - 100 faces (1500cm/2/7.5 = 100). Thus, when counting in centimeters, the first company actually takes 50%, but when counting in faces - only 43%. characteristics and price).

(This example was compiled for two companies whose products are similar in consumer characteristics and price category).

The choice of measurement method depends on the company's goals.

The first way can be used if it is necessary to strive for VISUAL dominance first of all. A block measured in centimeters gives an idea of the size of the color spot.

In the second case, potential SALES are measured: after all, the buyer purchases a unit of product (facing, and not a certain number of centimeters).

Therefore, if the goal of visual dominance is achieved, it is necessary to move on to the goal of dominance in sales and evaluate in faces, and not in centimeters.

The relationship between facing and SKU (targets for assortment and shelf space)

Facing plays the role of some conventional unit of measurement of shelf space. In this regard, when setting goals for the assortment, it is necessary to understand the CAPACITY of the shelf space, measured in facings. If the assortment goal (number of SKUs) exceeds the shelf space goal (number of faces), then the store will not be able to display the entire assortment at the point of sale. This will entail lost profits and freezing of money in products that are not sold.

There are retail outlets where a large number of SKUs is a prerequisite for success, for example, a pharmacy, bookstore, auto parts. At the same time, the area of the sales floor does not always allow them to be placed all accessible to the buyer. What to do in such cases? Should we strive to place each position “facing the buyer” in a small area?

In my opinion, in such product groups it is absolutely not necessary to display all the items on the display window. If a person has been given a prescription for a drug, then most often in a pharmacy the person will simply go up to the pharmacist and ask him about the availability of this drug. If this drug is not on sale, the person will go to another pharmacy or decide on a replacement with the help of a pharmacist.

In this case, it makes sense to remove behind the counter those SKUs whose impulse purchase is minimally likely. Thus, the space on the display will be distributed between those product groups and positions in which the buyer can make a decision himself without the help of the seller.

Product groups such as fabrics, clothing, shoes, stationery, dishes, wallpaper, ceramic tiles, etc. also contain a large number of SKUs. But in such product groups, SKUs are rarely sold if their faces are not visible to the buyer. This is where you have to make a difficult decision about assortment optimization. Whatever is not laid out or exhibited, whatever one may say, is not sold, but only takes up space in the warehouse.

Thus, when setting goals for quality distribution, it is recommended to consider shelf space and the number of assortment items simultaneously. This will allow you to set achievable goals and avoid the situation of setting goals that have already been achieved.

Economy

Keywords:

1 -1

The work of any merchandiser is like a chessboard on which the pieces are product categories, and the price of victory is conquering the territory of shelf space. Legitimate principles of assortment expansion and “white hat” techniques will only work to the benefit of your store, but unprincipled manipulations in the world of shelf space are something that can harm you, reduce profits and even alienate customers. Usually this side of merchandising is not talked about openly, but we will tell you in what situations you should stay on guard.

White starts and wins

Legitimate ways to increase shelf space for your products is an open and worthy struggle between manufacturers and suppliers with competitors. Proven techniques, simple tricks and a creative approach to work can increase sales, brand awareness and provoke customer interest. If the supplier chooses a “white” solution to the problem of increasing the presented assortment, you are definitely on the right track, because there are also many advantages for the store: more customers, more purchases, more profit. What legal methods do merchandisers resort to to “push” their products onto your shelves?

Merchandiser is a "sales person"

Perhaps, abilities cannot be more important than the ability to sell goods in the work of a merchandiser. It will even lose its significance if your purchasing department does not want to put this product on store shelves. And in order for the buyer to find the product on the “golden” shelf, manufacturers and suppliers spend a lot of time and money on training merchandisers. And not in vain: sometimes one such specialist fulfills the plan of an entire sales department in a few days.

Since merchandise experts often do not want to spend time getting to know new products, analyzing prices and revising an already “working” product matrix, merchandisers are always ready to work with negatives and will not go into their pockets for words. A situation worked out many times in advance, a provoking response - and now a place on the shelf has already been won. Here are a few examples from retail life of how a merchandiser can “resolve” the situation in his favor:

Situation 1. Commodity specialist: “We already have many suppliers, there is nowhere to put the goods.”
Merchandiser: “It’s nice to work with clients for whom a wide range is important. And to help with display and save retail space, we are ready to provide you with our own merchandiser. Tell me, are you satisfied with the quality of the goods from all suppliers? If you had more space, What product would you be interested in?"

Situation 2. Merchandiser: “This won’t sell well.”
Merchandiser: “Why did you decide that this product will sell poorly? To convince you, we will offer you only 100% hits, and you can see for yourself the demand for our product. It’s great that you are interested in sales, it’s nice to work with such clients. "

Situation 3. Merchandiser: “This product is too expensive.”
Merchandiser: “What does “expensive” mean to you? What products do you compare our offer with? I agree with you, our products are expensive, but among your customers there are those who need expensive products. In addition, with expensive products you can earn more."

These are just a few possible examples of communication between a merchandiser and your merchandiser. And your success in the market directly depends on how they both play their part in the sales chain.

Expanding the assortment through promotions and tastings

One of the most effective techniques for “clean” merchandising is expanding shelf space through promotions and tastings. The bottom line is that to organize such PR campaigns, you are ready to make temporary concessions to the supplier (expand the range, for example) and give him a larger share of shelf space. After the promotion ends, you will most likely narrow down the remaining assortment not much at all. The result: customer loyalty to the product increases and its presence on the shelf increases.

There are several expansion methods that merchandisers will offer you. Let's label them:

placement of additional “duplicate” displays: pallet or display,
increasing the share of goods on the shelf and the number of facings: this is not a cheap option; to save space, the supplier will have to constantly carry out promotions, varying the placement of product groups in the shelf space,
expansion of the store’s assortment: often during a promotion, the supplier offers the store to temporarily expand the assortment. After the promotional campaign, the assortment is slightly narrowed, but the supplier’s goal has been achieved: more items, more occupied space.

POSlook around: sales from shelf boxes

The second technique that actively works to increase shelf space is the placement of shelf boxes and mix boxes in the sales area. Shelf boxes are usually used to present a full line of products, especially in non-food retail (for example, cosmetics, medications) and only play to your advantage - they sell the product perfectly.

Mix boxes are another interesting trick from suppliers - they contain not only the names of promoted products, but also “bonus” products (as a rule, these are new items or already out-of-market products). You definitely win: you can attract customers with a “bonus” for purchasing a certain assortment, you benefit from low purchasing prices and do not invest large amounts of money on the purchase of a huge volume of products.

Gift Baskets

Creating gift baskets is not a new technique that allows suppliers to significantly increase sales during the holidays. As a rule, all sets are created with a focus on a specific price category, within which they will be especially popular among buyers. It is perhaps difficult to find a manufacturer today who does not use this simple technique in their work.

But that’s not all: gift sets not only increase sales, they stimulate a “second” wave of demand for products from a particular manufacturer. The effect is that the gift set itself (beautifully designed, festively packaged and giving the opportunity to try several products at once) plays the role of a promoter, drawing more and more customers into the ranks of product fans.

"Black" merchandising - a way to move a competitor

In their efforts to fill as much space as possible on your store's shelves, supplier competition sometimes crosses the boundaries of legality and "purity." For such cases, the term “black” merchandising is used. Using such techniques in his work, the merchandiser takes a conscious risk: his reputation in your eyes may be “tarnished.” But in this situation, the worst thing is that your store may also suffer:

the turnover of goods that have already proven themselves to have a high level of sales will decrease,
new positions will not justify themselves, which means the store will lose profit,
customers coming for specific products will go to another store.

As the famous proverb says: “Forewarned is forearmed!”, so in the second part of the article we want to show what you can face in this “war” for shelf space.

Be on the lookout for semi-legal display expansion methods

Controller's visit

We have already said that the merchandiser must have good communication skills with clients, but in the case of “black” work, this communication can turn into manipulation. How it happens: a merchandiser comes to your store and asks a loyal employee to just increase the display a little and put in a good word with the manager under the pretext of checking the controller. A nice gift and sympathy for a colleague who may be deprived of a bonus do their job: the place is won. The next day, the same merchandiser can come to the store along with a “controller” who praises the display and shares his joy in the form of a pleasant gift with the store manager. As a result, relations with store employees have been established, and you can move forward in conquering shelf space by conducting such “checks” repeatedly. This technique allows you to significantly change the layout in just a few visits. As a rule, with this approach, the merchandiser finds out in advance from your store employees a product category that is selling very poorly, and displaces it.

Squeeze out your neighbor

Another popular technique is to reduce the layout of a neighboring competitor by one facing, which is forced by its own products. As a result of several such interventions, the shelf space for a given supplier's product can increase significantly, and your store employees will not immediately notice the substitution, especially if the product is small. If the merchandiser of this “suppressed” competitor appears in your store infrequently, then the likelihood of identifying a “frame-up” is even lower.

A few more popular techniques

But the semi-legal methods of work of merchandisers are not always so thoughtful and cunning. Often they are simple and frank: competitive products are removed, rearranged, confused, and mixed with products of their own promotion without the slightest hesitation. To expand the display of goods in your store, a “black” merchandiser can:

change the place of someone else's products,
fill the competitor’s POS equipment with your products,
place your goods in someone else's display,
make a mess in a competitor’s display, mix up price tags,
turn away the faces of competitor’s products,
placing forward goods with wrinkled, damaged or tampered packaging,
laying out goods with a “fresh” expiration date in front and moving goods with an expiring expiration date deeper into the shelf in order to increase the number of “overdue” products and reduce the volume of purchased competitive products.

Illegal practices: be careful, merchandiser!

The main part of illegal methods for increasing shelf space is related to discrediting competitors. The main task of the “black” approach is to create in the buyer aversion to a competitor’s product and negative emotions by offering his own product in return. These are the techniques:

substitution of “incompatible” products in a competitor’s display: for example, cans of beer in baby food,
substitution of related products that do not match the price: for example, cheap cream for expensive coffee,
filling an empty rack with incompatible products: for example, sprats on display with chewing gum,
throwing in defective goods or even deliberately damaging the packaging of a competitor’s products,
throwing dirty items into a display or place of sale: for example, a dirty rag on the bottom shelf of the refrigerator,
damage to competitor POS materials,
theft or replacement of price tags: for example, giving a competitor a price tag that is an order of magnitude higher (instead of 150 rubles 1500) or, conversely, very low (instead of 100 rubles 10), which will entail a showdown at the checkout,
bribes to sellers, merchandisers of competitors and your store for deteriorating the competitor’s display,
dissuading customers from buying a competitor's product.

As a result of using these “dirty” techniques, buyers unconsciously develop negative emotions that are transferred specifically to the competitor’s product. And here, it is mainly you who are the loser: the buyer left dissatisfied, the volume of product sales suffers. All you have to worry about is: will the customer come to your store again?

How to deal with "black" merchandising?

Of course, the question naturally arises: how to deal with such techniques in order to protect the store from losses and customers from negative emotions?

One of the main rules is to take care of your employees.: Build trusting relationships with them, encourage them and offer them a decent salary. This way you can largely protect yourself from collusion with merchandisers and motivate them to do honest and high-quality work. Teach your merchandisers not to waste time and energy on responding to unscrupulous suppliers, prepare them in advance for the occurrence of such “black” situations in the shelf space. Your merchandisers must respond promptly to such incidents, providing feedback as quickly as possible.

Use video surveillance! This is the only way you can quickly identify the “black” merchandiser, catch him by the hand and report the incident to the supplier, taking serious sanctions against both him and the merchandiser himself.

Warn other suppliers in advance. If the fruits of the work of a “black” merchandiser have already been identified in your store, be sure to notify other suppliers about the measures taken to combat violations.

When planning the retail space of a store, its owner faces a number of questions. How to make product display varied, but not redundant? How to ensure that the display attracts as many customers as possible, and poorly selling products do not take up space on the shelf? How to calculate the optimal stock on the shelf so as not to “freeze” extra money, but at the same time so that the product the buyer needs is always present in the store and in sight? Tools for optimizing shelf space successfully solve these problems.

Creating planograms using GOLD Space Planning and GOLD Space Automation

Optimizing shelf space on racks improves product availability and helps reduce the number of low-turnover products on the shelf. The assortment is displayed on the shelf in accordance with the company’s uniform merchandising rules. During optimization, factors such as the specifics of store equipment, unique sales data, and local store features are taken into account.

Tools are used to optimize shelf space GOLD Space Planning and GOLD Space Automation.

GOLD Space Planning– a tool for creating planograms and analyzing their effectiveness.

GOLD Space Automation– a tool for automatically generating unique planograms for each store based on templates or rules.

By using GOLD Space Planning you will be able to visualize retail equipment and product placement in 2D and 3D. The program allows you to determine the required level of inventory for assessment and optimization of display.

The user is provided with ample opportunities for preparing merchandising reports and managing retail equipment.

Creating planograms is as simple as possible: you simply drag and drop products from the database onto the shelves.

As in GOLD Macro Space Planning, “hot” and problem areas in Space Planning are highlighted. This helps optimize the placement of product items.

GOLD Space Planning has advanced functionality for maintaining a variety of merchandising reporting. The program provides a function for comparing planograms of different stores or planograms of one store in different periods. Flexible analytical tools allow you to identify products with excess shelf space and reallocate space towards products with high turnover or profit.

All reports can be exported in Excel format.

GOLD Space Automation– a tool for automatically creating planograms. This solution will be necessary for companies that work with a large number of planograms. It will significantly reduce the time for creating and maintaining planograms and will enable the company to support individual store planograms with a limited number of merchandising department specialists.

By using GOLD Space Automation you will be able to create individual planograms for each store using a single set of rules, optimize sections whose design has changed, add and remove products.

GOLD Space Automation– a tool with which you can quickly improve your store displays and reduce lost sales thanks to demand-driven placement. The program will offer you a solution that matches your merchandising strategy. This software product from Symphony GOLD will optimize displays specifically for you based on business indicators of goods in stores, reduce response time to strategic and tactical decisions, and reduce inventories and losses. A friendly interface will help the user quickly understand the program.

Optimization of shelf space is aimed at increasing sales, optimizing costs for storing goods, and freeing up frozen funds. Initially, customer demand was met by expanding the retail space and product range. However, like everything in business, shelf space and the amount of money invested in inventory are limited resources.

The shelf space management system allows you to intelligently optimize and automate the management of shelf space and sales floor, and monitor KPIs.

Monitoring (profit per square meter of shelf, etc.) and optimization of shelf space allow sellers and suppliers to increase sales and profits, satisfy customer needs without physically expanding the shelf. A store shelf has limited space, so it is important to present an assortment that will increase turnover and maximize revenue from the store shelf. The most effective so-called “golden shelf” is the space at the level of the buyer’s eyes and hands (at a height of 1.2-1.7 m from the floor), as well as to the right of the planned flow of customers.

To optimize the distribution of shelf space, it is recommended to study the demand of customers and partners, and use modern retail equipment.

Systems for managing store shelf space, which include ABM Shelf, help place only those product categories that are in demand, increase sales, profits, assortment profitability, and optimize the distribution of shelf space. The implementation of shelf space management systems also allows you to:

reduce the need for discounts, reduce the inventory of goods and the costs of transporting goods,
simplify managerial decision making,
optimize the distribution of shelf space,
regulate relations with suppliers.

Let's define the concepts

SKU(Stock Keeping Unit, literal translation from English - stock retention unit) is one unit of a group of goods or brands, presented in one type of packaging and container (for example, one brand of kefir may contain several units of different degrees of fat content 0.5%, 1% , 2.5%).

Facing- a product that is visible and within the access area for buyers.

Assortment goal— determine the number of product positions that the manufacturer or supplier would like to present on the shelf of the outlet.

The entire assortment, according to customer loyalty, is divided into: 20% priority items, which are sold 3-5 times more often, regardless of price, 60% main stable items in constant demand, and 20% additional items.

Optimize the turnover rate, ensure a high probability of purchase, increase the visual perception of the product - shelf space goals.

The foreign merchandising rule “space to sale” states that the facing of a trademark should occupy the same percentage of shelf space that it occupies in sales of all goods displayed on the retail space. Compliance with this rule contributes to the uniform removal of goods from the shelf, reducing labor costs to maintain product display.

Video review of the retail chain FIRKAN, which implemented ABM Shelf to optimize shelf space

How to determine the optimal display size and how the ABM Shelf shelf space management system can help

The sum of the areas of all planes intended for displaying goods on the sales floor of a store allows us to obtain the total display area.

Space for goods on the shelf, identifying missing goods, determining delivery days, taking into account customer requirements, overall dimensions, seasonal fluctuations and moments of increased demand, can be measured in linear meters, square meters and cubic meters.

Place high-demand products at customer eye level.
The higher the weight of the product packaging, the lower on the shelf it should be placed.
Place new products slightly above customer eye level.
Place fashion and expensive goods on the top shelves.
Place products with expiration dates closer to the buyer, and those with later expiration dates - deeper on the shelf.
Price tags should be easy to read and include accurate information about the price and product.
Provide easy access to goods.
The vertical arrangement of homogeneous goods improves visibility.
The display should be diverse in assortment, colors, and sizes.
Make changes to product locations less often.

The figure on the left shows the horizontal placement of goods along the length of the shelf.
The figure on the right shows vertical placement of homogeneous products, which is more effective for quick orientation and ease of selection of goods.

Functions performed by the system for optimizing shelf space:

Visual design of planograms of the sales area and shelves, with various configurations and complexity
Planogram history archive
Approval of planograms
Centralized and decentralized management of product display
Using the characteristics of commercial equipment
Application of different algorithms to calculate the display of goods: horizontal and vertical arrangement of goods, package dimensions, trademarks, results of ABC analysis of assortment
Visualization of sales results on planograms of halls and shelves
Powerful analytical unit for distributing shelf space among racks, product groups, and stores
Exchange with AutoCAD

Is this functionality for optimizing shelf space often present in the store management accounting system? however, using a specialized service allows you to use many more functions and management options.

Optimizing shelf space in ABM Shelf

Analysis of the efficiency of the retail space