In retail, the image you portray to your customers is everything. Get it wrong or fail to understand it's significance and you'll soon suffer the consequences. Take the products positioned on your shelves, for example. If you don't present them accurately - give them the right facings and the space they deserve - your reputation can suffer.
Of course, it’s more than your reputation that will deteriorate. It's also the direct consequences of not giving the right facings to products that you need to acknowledge. Such as the fact that as your customers come to realise that you don’t have enough of the products they want or need, they’ll stop visiting your store.
We’ll touch on the other consequences a little later on in this piece. Suffice to say, if you pay attention to the details - like presenting your merchandise correctly - the bigger, more significant parts will take care of themselves.
What are product facings?
As we mentioned above, giving your products the correct amount of facings play a key role in showing your customers that you can offer them what they want and need. More than that, it can also lead to a better shopping experience.
But what exactly are product facings? Well, it depends on your intention. That’s because while a product facing is simple to understand, it does have two meanings.
Also known as blocking, zoning or fronting, you can consider facings as both a noun as well as a verb.
As a noun, facings refers to both the orientation and number of products placed on the shelf, which your customers can see. For example, when a customer approaches your Dairy category, they’ll note that on the shelf, a Full Cream Milk brand has two facings or fronts while a Skim Milk or Low Fat has one fronting.
Meanwhile, as a verb, it refers to the physical action of moving products to the edge of the shelf to ensure shelves always appear full, even if they are not. In other words, it’s a merchandising action. As for when you should complete it, that depends mainly on your store and your requirements and the consumer demand.
If you’re busy through the day, and your shelves empty quickly or are prone to become messy, it’s important to have someone dedicated to cleaning up your shelves throughout the day. If you are less busier, you could get away with doing it once a day such as before you open or after you close.
Regardless of when or how often you carry it out, it’s essential to do it daily.
Why do products receive different facings on the shelf?
While you may want to give all of your products the same amount of space on the shelf so that they all have an equal opportunity to perform, that’s not possible. We unpack the consequences of giving products the wrong facings later on in this piece.
For now, it’s worth pointing out that not all products will provide you with the same return on your investment. You thus need to be strategic in how you present them in-store.
Besides that, there are also a few reasons why you’d want to give one product more facings than the next.
Days of Supply
The first reason why you’d give one product more facings than the next is down to your days of supply.
The Days of Supply (DOS) of your product needs to align with that of your gondola to ensure the replenishment of all your products can happen at the same time. It improves productivity and ensures that you don't have any unnecessary gaps on the shelf, which could sub-consciously tell your customers that you don’t have enough stock.
Also, your days of supply depends on customer demand. If a product is a best seller, it would require more space on the shelf and thus, more facings so that you avoid running out of stock. If your product isn’t selling a high quantity (but you still want it on the shelf), you will give it the minimum facings.
A bonus is that you’ll also reduce your stock holdings and deliveries.
Sales and Weekly Movement
Naturally, a KVI line which sells a large number of units within a specified period requires more space on your shelf. It deserves it, and particularly if it is consistent and leads to an even faster weekly movement.
The converse is true. If a Product A doesn’t sell as much as Product B, it doesn’t deserve the space. That’s even if you have a soft spot for the item or have struck a deal with a supplier. You’d be your own worst enemy if you gave both products the same amount of space.
In this instance, it’s crucial that you consider your retail data to understand which products deserve more space on the shelf.
While your top performing products do deserve a great deal of the space on your shelf, you also need to make room for your house brands. Also known as private labels or private brand, today many can compete on the same level as other high quality branded products.
For you to take advantage of them, though, you need to position them correctly. That means placing these items in between the brand leader of the category and the secondary brand leader.
If you’re unsure of why house brands are worth investing in, it’s worth giving this piece a read. It’s also worth noting research by Nielsen, which indicates that more and more retailers receive more profit from private labels and store brands.
Similar to your house brands, it’s also important to make space for any promotions that you run in-store. It is a balancing act that you need to get it right.
Of course, promotions are only temporary, so there shouldn’t be that much disruption. At least not if you’ve consulted your retail data and have planned accordingly. As soon as the promotion is over, each product would receive the space it deserves.
That said, should a promotion go better than expected, it could always lead to some products remaining on the shelf in favour of those that haven’t performed as expected. But that shouldn’t be a problem - everyone wins. While you benefit from the additional sales, you’ll please your customers who enter your store looking for the product.
How do you calculate product facings?
You would calculate product facings by looking at your Days of Supply (DOS) and the Weekly movement of your products, your gondola and your store. This is all calculated by specialised software such as DotActiv.
As for how you’d calculate your DOS, you’d do that by dividing the capacity of a product with the units sold per day. Movement refers to the number of units a product sells per week. Let’s say you use six months of data. You’d then calculate movement as an average of all the units sold within those six months.
Of course, some specific scenarios and situations will influence the way you do your calculations.
Promotion periods or cross promotions is one such instance. When an item is on promotion, the unit movement will be high (meaning your DOS is low) as you’d likely merchandise it in a separate area over and above the shelf space that you’ve allocated to it on your planogram.
Out of stock is another scenario. When you run out of stock, there are no units to sell, which naturally leads to a reduction in unit movement. That, in itself, will make it appear as if a product sells poorly when in fact, that’s not true. It’s down to bad planning.
A third scenario is when you have a new product. With any new product, you’re unlikely to have any historical data, and therefore your DOS will be zero. It is, however, recommended to give new products a minimum of two facings.
The last scenario is down to seasonality. Since certain products sell well over a season, these will have one or two months of increased sales. That leads to a rise in the overall unit movement for the period selected, and so you’d want to give it as much space as possible to meet this demand.
That said, there are definite consequences to giving the wrong product the wrong amount of facings (or space) in your store. That’s why it’s crucial to consider all of the above when calculating the final figures.
Consequences of calculating wrong facings for your products
As we’ve alluded to throughout this piece, calculating the correct amount of facings for each of your products goes a long way to helping you realise long-term success.
But what about the consequences of getting it wrong?
For one, you can expect to experience overstocking. By giving too much shelf space to products that don’t sell and do deserve it, you’re guaranteed to end up sitting with deadstock on your shelf (as well as in your storeroom).
It could become that much more of a problem if you haven’t negotiated with your supplier to return any unsold stock.
What makes it worse is that you could use the shelf space taken up by the deadstock to carry a product that sells. So, overstocking leads to the second problem of wrong calculations: lost sales.
For maximum sales, the amount of space a product occupies should relate to the sales the product generates. If you allocate too much space to a product, total sales per forward share will drop. Meanwhile, if you allocate too little space, you’ll also lose sales.
A third consequence is a messy store and lousy shopping experience. In this instance, it relates more to the physical activity than anything else but is still relevant.
Because at the heart of calculating the right amount of facings for your store is the goal of providing a shopping experience that will encourage customers to return.
The category management process is not a short or simply exercise to complete. It takes a lot of time and dedication. That’s the way it should be though. After all, anything that’s worth doing takes time.