Increasing Sales Through Shelf Optimization
by Aaron Chandler, Research Analyst
The right shelf placement strategies will increase product and category sales. The challenge is discovering the right strategy
to implement.
The most common way to measure the actual impact of alternative placement strategies is to try out each strategy in-store and wait for sales data. With an in-store test, the cost of experimenting with shelf placement is high and the time required to determine the effectiveness of new strategies is long. Fortunately, new methods to evaluate product placement are faster and more cost effective. |
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Virtual in-store testing, or virtual shopping, is becoming a widely used platform in market research as a method of measuring consumer behavior. Most commonly, virtual shopping measures the impact of new product introductions, packaging changes, message communication, shelf presence, and aisle configuration/optimization. The virtual store platform reads the influence a change has, not only on individual product sales, but also on the brand and portfolio as a whole, its competitors, and the entire category.
Because virtual in-store tests capture sales data on every product in the category, several key measures can be extracted such as purchase incidence, average units, volume, and dollars. By identifying shifts in these measures, you can learn the impact altering shelf configuration has on key products. In addition, you'll understand if these shifts result in category growth, brand growth, or both. And you'll determine whether buyers are switching between products in a brand portfolio or if they're switching from one brand to another.
Virtual in-store testing is done online so it's easy to collect data on in-store behavior of consumers at the local, regional, or national level. This is especially helpful in categories that have different competitive sets from region to region.
Since most retailers are reluctant to allow a manufacturer to conduct an in-store test with substantial shelf re-arrangement, virtual in-store testing offers a real alternative. A virtual in-store test can accurately project the impact of new arrangements ie, adjusting number of product facings, changing brand groupings, etc. With this methodology, a major packaged goods company was able to convince a retailer to reconfigure their shelf. This resulted in a double-digit percent increase for the manufacturer and increased category sales for the retailer.
In short, both manufacturers and retailers benefit from using virtual in-store testing to quickly and reliably evaluate multiple shelf configuration strategies in a cost effective manner. Results will determine whether moving forward with a strategy will benefit a single product, product portfolio, category, the retailer, or all of the above.
Category Management with Virtual Shopping |
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