Shelf management tips to grow sustainable sales

Shelf management tips to grow sustainable sales

When it comes to category management, you may know the seven essential components, but do you know how to implement each one?

To provide you with a better understanding of how important the 7 musts of true category management are in helping you grow your business, over the next several weeks we will be taking a closer look at each one.

Shelf Management

Shelf management includes product placement and merchandising on retailer shelves. Specifically, it helps the retailer maximize sales per linear foot, drive foot traffic to stores, increase customer shopping basket size, and have a competitive advantage in their marketplace. A retailer's merchandising strategy will communicate their marketing strategy to shoppers. 

Effective self-management strategies can be used to communicate a consistent message to your customers, highlighting your commitment to meet their needs. It can differentiate you from your competition. Product placement is critical. Consumers want stores that are easy and friendly to shop and want their favorite brands at a fair price.

Getting a product on the shelf in the right place and at the right stores is key to any brand's success. Most retailers merchandise items grouped by brand to make categories easy to shop. This strategy allows consumers to more easily compare like items.

Manufacturers need to work closely with retailers to ensure that each item has enough holding power (items available for sale on the shelf) to support consumer takeaway. A common strategy is for a retailer to have several days of supply of each item available on the shelf. 

For example, if an item comes 12 to a case and they sell an average of two a day, a retailer may want to have enough space on the shelf to hold 1.5 cases of product. The goal is to have no additional back-stock while avoiding out-of-stocks. In this example, the retailer could reorder the item one case a week. Retailers need to enforce this discipline-at-shelf strategy across each of their stores.

Segmenting and product assortment

Segmenting breaks up the category to make it easier to shop by quality, color, scent, style, type, etc. For example, new mothers may find it easier to shop the diaper category if it's segmented by economy, premium and super-premium.

Another component of placement is product assortment. Customers want the top items available in the market in addition to specialty or niche items that meet their needs. The goal is to have a broad assortment without too many duplicates because customers make judgments about retailers based upon assortment: too few items and they perceive the assortment to be poor and too many items cause confusion. The proper mix includes top-selling items available as well as specialty items that differentiate your store. 

This is one of the main reasons the practice of category management started. Its mission is simply to reduce out-of-stocks, maximize inventory efficiency, increase consumer takeaway and increase the profitability of a brand. Category management has now evolved to fully understanding consumer buying habits and helping brands meet consumers' needs. 

What shelving strategies do you use? 

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