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Understanding Retail Presence for Improved Sales Performance…

by Miin Tan on 01/21/2016

Whether a big brand or a new entrant, presence at the point of sale is critical – but how much space are you really laying claim to? What’s the right way to measure it and more importantly, can you improve it over time? 

On the measurement front, there are a range of options, from simple counts to more sophisticated share metrics. Here are a few to be aware of;

  • Facings – the simplest of all measures – how many (horizontal) shelf positions does your SKU or brand occupy? There is often a difference between what you ‘plan to achieve’ and what is actually happening on shelf in any given location, at any given time.
  • Share of Visual Inventory (SOVI) – taking it a step further, what share of the overall CATEGORY can you lay claim to? Count the number of shelf or fridge facings across an entire category. Then do the same thing for a specific SKU or brand within that category. Dividing the latter by the former gives a % score – the SOVI – a measure of outright category domination.
  • Share of Assortment (SOA) – in this measure you count the number of different SKUs/ products instead of facings (ie one SKU may have multiple facings – it’s still just counted as ‘1’). The calculation is the same as for SOVI (ie divide a particular SKU/ brand result by the total category result) but the meaning is different – in this case, we are measuring relative ownership of a consumer’s purchasing options.
  • Shelf Space Measurement – here, you are literally measuring shelf frontage in cm or inches (with a tape measure!) for your SKU/ brand as a proportion of total category frontage. It may give a similar outcome to SOVI, though this depends on how you define ‘facings’ (see below). Similar to SOVI, it provides a category domination measure at the location level.
  • Shelf Level – different levels in a set of shelves attract different amounts of notice. Ensure your products are on the correct shelf/ at the correct height to ensure you maximize sales opportunities.
  • Floor Stack Measurements – an important element for many brand’s retail effect strategies, floor stacking generally refers to the placement of non-permanent product stacks in aisles around the store. Again, relative measures are most effective for an understanding of your position – this is all about visual impact and provides a further ‘off the shelf’ measure of brand prominence.
  • Special Displays and Promotional Installations – like floor stacking, these require a ‘full store audit’ and usually include both an analysis of brand share and of promo/ display type.

Before you can get to work measuring these items however, you still have a few decisions to take;

  • How do you define your category? Important for any relative measure, this will define what SKUs and shelf areas are included in the measurements.
  • How do you treat Shelf Out Of Stock (SOOS)? If a product has a shelf position with a price tag and label, but is out of stock, do you regard this as a ‘facing’ or not. There are reasons to consider either approach.  

  • Further, how do you define a successful facing? It can be as simple as ‘an SKU visible at the front of the shelf, with a price tag/ label’, or more complicated, requiring a certain depth, height or other conditions.
  • Finally, keep in mind who will be using this data. Rather than measure everything, pick just one or two measures most suited to your business and try to keep definitions simple enough to be useful (comprehensible) metrics. 

With a specific, well defined set of measures in hand, you can start measurement. There are all sorts of reasons why space results will vary by location and over time – consequently, all sorts of things you can do to drive improvement. Consider a regular audit using a standardized approach and rapid data turnaround. Ensure you are getting data which is linked to specific locations – then identify where there are ongoing issues, or where performance is more variable than you might expect. Conversely, look for locations where it’s all coming together – to see what you can learn and how these learnings can be applied to less successful areas. 

All the while, you’ll be getting an understanding of where you sit vis competitors and category in terms of retail presence – and further insight to help explain your sales results and formulate strategy for growth.

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