Darren Gilbert Jul 12, 2017 2:15:14 PM 9 min read

Why Small Retailers Struggle To Manage Their Shelf Space Efficiently

Small Retailers_Shelf Space.jpg

As a small retailer, it can seem that the odds are always stacked in the favour of your larger competitors. That point can be further argued if you throw in the fact that they usually have bigger budgets and a more diverse set of customers. But that doesn’t mean small retailers can’t compete.

In fact, there are many ways in which you can beat out a larger retailer. To do that, you’d have to work smarter and be more creative in the way you present yourself to your customers. It also helps if you don’t give up any ground you’ve won by slacking off or taking a wrong step.

One of those wrong steps is to not use your shelf space efficiently.

An over-reliance on customer service

A strong aspect of most, if not all small businesses is that you know and understand the need for great customer service. It does help that it’s a lot easier for you to deliver on this than it is for a larger retailer. A smaller array of products means it’s easier to gain specialised knowledge, so you can help your customers.

However, there is a potential downside to this emphasis on customer service. In only relying on providing the best service to sell your products, you’re failing to see the bigger picture.

The bigger picture is this: the success of your store isn’t only reliant on your customer service. You also need to pay attention to the business side of things. And, in my experience, this is where the problem lies for small retailers.

For example, figuring out your shelf space, which is linked to your business side, can often be seen as an afterthought. If you want to maximise your store’s opportunities, both the customer service and business side needs to work side by side.

          How to fix it:

Fortunately, a problem like this is fairly easy to fix. It helps that as a small retailer, you don’t have to worry about any red tape that comes with running a larger retailer. Seeing as you make the rules, if you want to change an aspect of your store, you can it without much fuss.

For example, if you run an independent pharmacy and need to sort your shelf space out, you need planogram software. Considering your size, if you receive a planogram this afternoon just before you close, you could have it implemented by tomorrow.

This is in comparison to a larger retailer who has to consider a wide range of opinions across the business, including head office and those within the actual store.

There is a lack of planning

Whenever a store is initially created, the next steps include working on your category flows, adjacencies, assortment plans, floor plans, and so on. That applies to all retailers, no matter if you’re small or large.

That is, of course in an ideal world, and unfortunately, it doesn’t always happen. And therein lies the problem for small retailers: shelf space and store layout can seem more as an area to place your goods than a strategic opportunity to present them.

          How to fix it:

To fix this particular problem, it all comes down to a clear mind. That means taking time to stop and think about your store layout before you implement it. How are you going to place your retail fixtures in your store? Where are you intending to place your best selling products? What is your overall goal for a specific category?

And then ask ‘Why’ for every answer you give. Questioning your reasoning behind your decisions is the perfect opportunity to take a rational look at your store.

Our Planogram Automation Software can help your small retail business to automatically calculate product space apportionment.

Also, if you take the time to sit down and first work out how much space is going to be allocated to each category or department, it removes any guesswork. It also improves the inner workings of your store and provides a better shopper experience for your customer.

There is a lack of understanding the strategy behind a category

When a standard drop is planned out in a large retailer, it’s understood that your categories have a certain flow to them. This, of course, depends on the goals of your business. But you’re most likely keep your best selling products at eye-level while potentially high selling products will be placed on shelves either above or below them.

However, in a small retailer, this might not be considered.

Instead of planning and understanding where to place your products, it’s simply a case of allocating without any thought. You may have great products but if you don’t give them enough facings or allocations on your shelf, you’re only damaging your store.

          How to fix it:

The first step in understanding your category is to study the products within it. That means physically going to your shelves and picking the products up. Read up about them. Research them. Do whatever it takes to figure out what makes your products unique.

Once you’ve done that, it will make it easier for you to know where to place a product. You will also understand why a product should be placed in a particular spot in your store or shelf. Conversely, it will make for an easier shopping experience for your customer.

The consequences of not using your shelf space efficiently

There are a number of ways in which a large retailer will beat you and other small retailers if you let them. For example, your larger competitors will most likely have implemented systems to control their stock and layouts.

Without these same systems, as a small retailer, you will fall further behind. For example, a supplier only has a certain amount of stock and if you can’t give them good enough reasons for them to give it to you, you may have to settle with whatever they feel like giving you.

From a customer perspective, if you fail to sort out your space planning, you risk losing an opportunity to sell to them. A perfect example would be a China Mall shop or any store equivalent to it.

Let’s compare them to a larger retailer. As soon as you walk into a larger retailer, you can expect signage that will guide you. The aisles are also open and spacious and the shelves are well-positioned an organised. More often than not, it’s a pleasant shopping experience.

The opposite is true when walking into a China Mall shop. It is tight and confusing and products are packed randomly and without thought. More often than not, you will likely leave without having bought anything. The long-term result is closure as no one will want to shop there.

And to think, all of this could be fixed with a little foresight and planning.

Conclusion

It shouldn’t be all doom and gloom when it comes to sizing up your small business. There is a lot that you can do to compete with larger competitors. Using your shelf space efficiently is just one way to do that. And all it takes is a plan and dedication to giving your customers what they want, when they want it.

avatar

Darren Gilbert

With over 10 years of writing and marketing experience, Darren joined DotActiv in 2017 as a content writer where he was responsible for producing blogs, Ebooks and more. He has since worked himself up to the role of content manager, where he oversees all and any content produced by the company. He has a Bachelor of Arts in International Studies from the University of Stellenbosch.