SHELVING

An effective shelf plan is a result of several factors.

These factors include, among others, offering an attractive merchandise arrangement, allocating enough space to each product, and making effective use of your allocated space.

By offering an attractive product selection, you’ll improve customer satisfaction. By allocating space optimally, you’ll achieve an organised in-store flow, guiding your customers from one category to the next.

By making effective use of your space, you can improve the overall visual appeal of your stores. You’ll also limit the number of times you run out of stock.

Other benefits of following a shelf plan include:

• Increased sales;
• Identifying poor performers; and
• Effective cross-merchandising.

There are different shelf planning principles, depending on whether you are a retailer or a wholesaler.

SHELF PLANNING PRINCIPLES FOR RETAILERS INCLUDE THE FOLLOWING:

• Merchandise your products from premium to economy, left to right;
• Merchandise by sub-category and then by brand;
• The maximum merchandising height must be 1.98m (or as determined by the retailer).
• House brands must be merchandised next to the brand leader;
• You must place your faster lines at eye level; and
• You must allocate space by equalising your days of supply.
  
  

SHELF PLANNING PRINCIPLES FOR WHOLESALERS INCLUDE THE FOLLOWING:

• You must merchandise singles on retail shelving;
• You must merchandise shrinks and cases on wholesale shelving;
• You must place singles on the top of your shelf;
• You must place shrinks in the middle of your shelf; and
• You must place cases and pallets at the bottom of your shelf.

 

As with anything done in-store, shelf replenishment has a vital impact on your sales and profitability. After all, if you don’t have sufficient stock on-shelf, you won’t be able to make any sales. The same can be said for if you don’t have insufficient stock in your storeroom.

More than that, proper shelf replenishment is vital to keeping customers satisfied and returning to your store. It comes back to the right product, at the right time, in the right place.

 

WHAT IS SHELF SPACE EFFICIENCY?

The more difficult it is for your customers to find products on your shelves, the worse off your store will be as it will lose sales. Shelf replenishment will also be more complicated as the shelf space allocated for a high-selling product will empty faster.

It is here where planogram software can help. Specialist software can help you get the full potential out of your data, thereby improving your shelf space capacity. How? One way is through custom highlight spectrums.

A highlight spectrum is a visual report that reveals and compares the performance of products on a shelf by attributing a colour code to each product.

 

1. LOWEST SALES TO HIGHEST SALES

You can highlight those products which generate the highest turnover by analysing the product sales performance of a planogram. With DotActiv’s software, you can attribute a specific colour code to your products based on their sales performance.

It allows you to view which products have the highest sales and where they are on the shelf. You must ensure they are well-positioned (eye level or close to) and have the correct amount of facings.

 

2. LOWEST UNITS SOLD TO HIGHEST UNITS SOLD

In DotActiv software, you can highlight those products which have sold the most units over a specific period. While products with high units don’t always yield the most profit, shoppers still expect to see them. They can be used as traffic building products to draw in shoppers.

You must ensure that those products which are selling the most units are at eye level. If, after having highlighted your products by units sold, you find that products are selling few units at eye level, swop them out.

 

3. LOWEST PROFIT TO HIGHEST PROFIT

You can highlight the products which yield the most profit. By merchandising certain categories in a high traffic area, you can increase the consumer’s exposure to higher-margin items.

By using the highlight spectrum, you can ensure that profit-generating products are well represented on the planogram. You can also ensure that the products with any given category are given the correct space allocation on the shelf.

The more difficult it is for your customers to find products on your shelves, the worse off your store will be as it will lose sales. Shelf replenishment will also be more complicated as the shelf space allocated for a high-selling product will empty faster.

That is where planogram software can help, aiding you to exploit the full potential of data to improve shelf space capacity. How? One of the ways is through custom highlight spectrums.

A highlight spectrum is a visual report that reveals and compares the performance of products on a shelf by attributing a colour code to each product.

 

1. FOCUS ON GETTING YOUR FLOOR PLAN RIGHT

When it comes to monitoring your shelf capacity, it all begins with your floor plan

It is because when planning your floor layout, you must give your categories the right amount of space to ensure they perform at their best. The amount of drops each product gets is dependent on a variety of factors such as the number of sales, units movement and profit.

If you give the wrong category too much space, you’ll end up with what is called range bloat. To avoid that, we recommend you do a cross-category analysis. By conducting one, you can analyse and compare the sales, profits, returns and so on of each of your categories.

 

2. ENSURE YOU ARE RANGING FOR THE CORRECT PRODUCTS

On the one hand, high shelf congestion can leave your shoppers confused. That’s because there’s too much product. On the other hand, a low shelf congestion rate can leave your shoppers frustrated. That’s because there aren't enough options from which to choose.

When it comes to ranging products for your shelf, you need to find a balance between the two. You can do that by stocking sufficient products to meet the needs of your target demographic and local market.

If you attempt to bring in a range that isn’t targeted at them, it will result in stocking your store with products that won’t sell. This increases shelf congestion while simultaneously decreases sales and shopper satisfaction.

 

3. SET UP A TARGET CONGESTION PERCENTAGE THAT MAKES SENSE

Your target congestion percentage depends largely on the size of the products in your category. For example, your Baby Diaper category will have a different congestion percentage to your Men’s Deodorant category.

Regardless of the size of your product, it needs to have a target congestion percentage that will make sense.

The larger the product, the higher the congestion percentage can be without the shelf looking messy or overstocked. You can't say the same for a category with products that are smaller in size. By increasing the congestion percentage, a shelf will look untidy.

 

HOW SHELF-TALKERS CAN COMPLEMENT YOUR CATEGORY MANAGEMENT STRATEGY

No matter if you are a retailer or supplier; shelf-talkers matter. For retailers, they can act as effective marketing tools to drive more customers into their stores. The same can be said for suppliers since when used properly, they can draw attention to specific products within a category.

But there is more to shelf-talkers than seeing them as a tool to introduce new products or raise brand awareness. Shelf-talkers can also complement your overall category management strategy.

 

1. THEY CAN CATER FOR TRENDS

While trends can be unpredictable, retailers are expected to keep up to date with what is going on. Shelf-talkers can help here by communicating valuable information that is important to your customers.

They act as silent salespeople.

 

2. THEY CAN HELP YOUR CUSTOMERS NAVIGATE THROUGH YOUR CATEGORIES

It takes a lot of time and effort to effectively plan the flow of your categories in-store. That is why, if you don’t take full advantage of it, you’re wasting your time and effort.

With shelf-talkers, you can take full advantage since you can use them to guide your shoppers through the sub-categories, segments, and sub-segments of the various categories within your store.

 

3. THEY CAN ADD VALUE TO YOUR CUSTOMER’S PURCHASE JOURNEY

While shelf-talkers can play a promotional role in your retail store, if you want to make full use of them, they must be seen as more than just selling tools.

Shelf-talkers can be just as effective when used to educate and inform your customers. This is of paramount importance since the biggest change in category management over the years has been to emphasize customers.

In educating your customers first, and selling second, you’re allowing them to make up their mind, which adds value to their buying journey.

1. RETAILERS MUST COLLABORATE WITH SUPPLIERS

Considering that retailers own the shelf space in their stores, they should be more upfront about deciding how to present themselves to their customers. That includes making decisions around the shelf-talkers that are found in their stores.

They can decide whether or not to place a shelf-talker. If they do, they must insist on working with a supplier to craft the message that appears with it.

The reason is simple: customers buy from stores they trust. More than that, collaborating allows for a consistent look and feel across the store. If a supplier only cared for their product, it would do nothing for the store’s overall reputation.

For shelf-talkers to be truly effective, they need to contribute to both your retail brand and the product’s brand.

 

2. LOCALISE YOUR SHELF-TALKERS ACCORDING TO YOUR MARKET

There are two reasons why you should localise your shelf-talkers according to your market.

Firstly, you may have a few stores located throughout the country. While some stores are located in rich neighbourhoods, your store caters for a wide market so you’ll also have one or two in poorer communities. The marketing message on your shelf-talkers would differ according to the location of your store.

Secondly, once a certain method, design and style have proved to be effective, it’s time to implement it across all of your stores that have a similar shopper profile. It will have a similar, if not the same effect, as localising your assortment planning.

 

3. DESIGN YOUR SHELF-TALKERS AROUND THE PRODUCTS YOU’RE ADVERTISING

When designing shelf-talkers, they must be different. That’s because shelf-talkers are meant to draw attention to specific products and offers that you have in your stores.

One way of doing that is to design them around the products they are advertising. For example, a shelf-talker that focuses on an instant coffee product must have distinct look and feel so that it isn’t confused with a shelf-talker for a new breakfast cereal.

If your shelf-talkers are generic cutouts by nature, it won’t matter how many you have in your store. Sooner rather than later, your customers will overlook them as they shop..

Increase your revenue by between 5% and 30% by giving your products data-driven space allocations and applying consistent merchandising principles across your stores.

With our category management services, you’ll get quick access to the expertise, software and process required to ensure you choose ideal category roles with matching category tactics reflected in your planograms.