Arab Retail 2020: The importance of Shelf Management

This post analyzes the importance of shelf management in retail stores. It provides practical tips and tricks on how to sell more by using tools such as shelf-dividers and placing items at eye-level. It also looks at examples of stores that sacrificed space for products and used the area to offer services.

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Shelf management refers to product placement and merchandising on store shelves. How you place your merchandise often communicates your marketing strategy to customers and can greatly impact your bottom line. Specifically, shelf management helps a retailer maximize sales per foot, boost foot traffic to stores, increase shopping basket size per customer, and gain a competitive advantage in the marketplace. 

Research shows us that customers’ buying decisions are heavily impacted by their retail experience. A majority of people make buying decisions in store rather than before. Fully stocking shelves encourages customers to buy more. Shelf management tools such as drop-in pushers or shelf-dividers make your shelves always appear fully stocked and encourage a healthy shopping environment. Generally speaking, products displayed on shelves at eye level have higher sales than those on the bottom or top shelves. Also, products with brand labels facing forwards, towards customers, generate more sales. 

Customers love shops that are easy to navigate and friendly to shop in and basically want their favorite brands at competitive prices. The key to any retail shop’s success is correctly placing a product on the shelf. There are several strategies for product placement such as grouping items by brand to make it easier for consumers to compare. Another strategy is to organize your store to match the walking pattern of 60-70% of your customers and place items accordingly. This is why frozen items and ice creams are found near the end of supermarkets.   

Product assortment is another factor of shelf management. Customers not only look for popular or top items, they also want specialty or niche items that match their needs. This means your store needs to have a variety of items without much duplication. Too few items may anger customers while too many items may cause confusion. A solid mix includes top-selling goods as well as specialty items for niche customers. 

Some retailers find more profitability in sacrificing shelf space to make room for other services. Some music stores, for instance, sell instruments and also provide educational services like learning how to play a guitar. These classes are usually done in store in a section that could be used to display more merchandise. Staples in Canada, an office retail company, dedicates 25-45% of its store to short-term office rentals. They come equipped with fully-loaded board rooms and presentation rooms which has resulted in an increase in Staples’ revenue per store.     

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