More sales are a good thing, and having enough supply in-store to meet demand, and encourage purchasing is important to the success and growth of a product. Unfortunately, a mistake that is made all too often is equating more product on the shelves or floor with higher profits. While more space often means more sales, retailers will almost certainly want compensation for any extra store space you want, and when the cost of extra retail shelf space is more than the jump in sales that your product receives, it’s time to think about how your shelf saturation point fits into your retail execution strategy.
Another thing to consider when purchasing retail shelf pace for your product is the impact location has on sales. In certain categories, product sales increase by over 100% when sold with multiple vertical facings as opposed to horizontal facings. In order to create the highest return on investment for your product, collect data on where your product performs best and then weigh the differences in sales between locations against the cost of the space. It may be that having only a few facings gives you the highest return on investment. To read more about how facings can influence ROI, check out our Best Practices Guide to Building Your Retail Presence.
This study by Booze&Co gives fantastic insight into how exactly profits are affected by retail real-estate costs. This Chart from the aforementioned study demonstrates well how different brands and product categories have different supply chain relationships which impact their point of optimal shelf-space.
If your product is selling well, but profits are not rising at the same rate, it may be time to re-evaluate your retail space strategy and think about new ways to optimize your supply chain process. In some cases, efficiently restocking a small amount of product can be more cost-efficient than huge orders which sit on the shelf for a long time.
As the retail landscape continues to evolve, it’s more important than ever to stay on top of the latest trends and challenges. Download our report today to see how more than 160+ CG executives and field leaders are strategizing for 2024.
In our recently unveiled 2024 Outlook Report, a significant shift in the priorities of CPG and Retail Services leaders has come to light. Notably, a whopping 90% of those with access to budget..
In the era of data-driven decision-making, we understand the significant impact that organized data can have on your retail execution strategies. Yet, the pains associated with disorganized and..
Our team at Repsly is excited to announce the launch of our highly anticipated 2024 Retail Outlook Report. At Repsly, our mission is to help CPG brands thrive in the retail landscape, and our annual..
