Retail Product Management and Shelf Optimization

Product Demand and Inventory Management

Product Daily Demand: Average amount of product you plan to sell.

Safety Stock Day: Minimum amount in storage to avoid running out of goods if demand exceeds expectations. This safety stock depends, among other variables, on the:

• Provisioning Period: Replenishment period, time taken for the establishment to receive the goods from an order.
• Global Sales: Total sales of the establishment across all products.

Four Methods for Calculating Minimum Stock for Each Product Line

Replenishment Period Method: This method is based on the premise that the shelf space assigned to a product depends on the demand for the product and the time it takes to replenish the establishment with that product.

Sales Number Method: This method is based on the premise that the shelf space dedicated to a product should be proportional to the net sales proceeds with respect to total company sales.

Market Share Method: This method assigns the same percentage of shelf space as the product's market share relative to competing facilities. For example, if a product has a 2% market share, it occupies 2% of the shelf.

Objectives to Achieve in Shelf Product Distribution

• Maximize turnover rates and sales.
• Optimize space.
• Maximize profit.
• Cut costs and storage provisioning.
• Promote new products.
• Liquidate slow-moving stocks.
• Attract customers.

Key Variables to Consider

The variables that we must take into account are price, margin, sales, minimum linear stock, and clearance stock.

Horizontal and Vertical Presentation

Horizontal Presentation:

• Better use of overall space.
• Ability to present more facings at once.

Vertical Presentation:

• Saves customers time choosing products as they are arranged in the direction of traffic, allowing them to stop and find all products of the same family together.
• Creates a sense of order and care in the linear display.
• Allows for several levels at the discretion of each line to break the monotony and encourage the presentation of products.
• Facilitates the location of complementary products.
• Allows for linear distribution of levels according to the criteria of the product on the shelf.

What is a Gondola? Characteristics

The gondola is the furniture that contains the linear display and can be divided into three parts:

• Central Part: Located in the central part throughout the linear display.
• Ends: Located at the beginning and end of the gondola. These are sites with poor quality of attraction because they are hidden behind the head. They are usually used to advertise products.
• Headers: Located in front of the aisles. These are privileged places that all customers must pass in front of, so they are used for promotions that are changed regularly. They are also used to place products during a launch or products that are intended for a mass-market introduction.

Types of Products Depending on the Type of Purchase

Batteries, gum, etc.