The exhibition is an important element of the marketing of the point of sale, of "merchandising". However, there are some establishments, mainly self-service stores, that locate products on their shelves without following any kind of criteria. This is a serious mistake, because the indiscriminate location of the product will not generate any benefit to the business.
How to increase the profitability of spaces in self-service stores
The placement of the merchandise on the shelf is not done randomly. Imagine, merchant friend, if two conditions were met in your business:
- Have the shelves always full; yWith all the products that consumers request.
Imagine also the space that you would need to have so that all your merchandise is seen and therefore purchased, and that this merchandise is “absolutely” all that your clients require. So that by the end of your work day you would have sold everything and needed to refill your shelves for the next day.
First of all, it would be impossible for you to know 100% the preferences of your clients, because although your approach with him allows you to know what they buy “regularly”, the preferences of the clients and their demands change continuously. Second, it is impossible for you to put all the merchandise you have available on your shelves.
If for supermarkets, which have much more display area, this topic is extremely complicated, it is much more complicated for small retailers that have a small display area.
It is for this reason that you need to optimize your exhibition space, so that this affects your sales and profits.
It is necessary that you know how to distribute the space on the shelf in order to generate a greater return on your investment. As well as being able to identify the space that is not being productive and manage to take advantage of it.
Keep in mind that when competition increases, the value of lost sales and having excess products on the shelf grow. The space you have available to display your merchandise is not a warehouse for products, you are required to distribute it in such a way that it becomes a sales tool. To this end, it must fulfill the following basic functions:
- Attract customer attention to the product. Promote customer loyalty to the business. Offer the product. Provoke the act of purchase.
Customer service at the point of sale can be directed:
- Changes of spaces affect the attention of consumers (Space / Facing, etc.). Consumer attention can be managed from the shelves and is an important determinant of the purchasing process. Most decisions are made at the point of sale. Two-thirds of decisions are unplanned. These types of decisions at the point of sale are becoming faster and do not require further research or price comparison. Consumers buy from multiple businesses.
How to distribute the space on the Shelves / Shelves
The changes of space, place and facing that are made with the products that are exhibited affect the attention of consumers and the sales of the products.
In other words, Facing (the number of faces of a product displayed on the shelf) influences the probability of purchase. Assigning too much facing a brand can be a waste, assigning too little to it can mean sales losses.
There is a minimum of space necessary for the consumer to perceive the products arranged on a shelf. Numerous studies have shown that a product needs between 20cm and 25cm of space on a shelf for the consumer to perceive it. In the case of Facing, a minimum of three facings (three faces of the product, three units on display) are required for the consumer to perceive it.
To allocate the space, some factors have to be analyzed, including how much capacity does your display shelves or showcases have, what is the surface area required by the product (are there bulky products, other small ones, etc.) and what is the rotation of the products?.
The most used criteria to assign spaces are:
- Depending on the rotation: The merchant gives more space to the products with the highest rotation. Depending on the products that they want to push: Those products that they want to rotate are better displayed.
The merchant can improve its performance by directing, through exhibition, consumers to buy products with a higher margin or increasing the number of unplanned purchases per occasion. Please note that most purchase decisions are made at the point of sale. Two thirds of the decisions are not planned, the customer did not think to make those purchases when he went to his store. Studies argue that consumer attention at the point of sale can be directed and that it is an important determinant of purchasing behavior. (See Box).
In the case of self-services, where the consumer makes his shopping tour alone without any assistance or advice for his purchases, the exhibition is vital. It is from this experience on display that small merchants have to rescue the most valuable to adapt it to their particular needs.
Various studies have shown that the levels of the shelf (the physical space on the shelf / shelf) have a different selling value (See Table / Graph). As seen, it is the eye level that has the highest number of sales, however, it is the hand level that is the most profitable, because that level only has a third of the space that the eye level has.
| level | Value (%) | Height (m) |
| Head | 9 | > 1.70 |
| Eyes | 52 | 0.80 - 1.70 |
| Hands | 26 | 0.50 - 0.80 |
| Floor | 13 | 0.00 - 0.50 |
Either way, it is the eye level that has the most value. The sales process is a process of visual communication. Sight represents 80% of human perception, hearing 10% and the rest of the senses (touch, smell and taste, the remaining 10%).
In such a way that the visual aspect is vital to sell. Altering the visibility of a product because its location has been changed or because its facing increases, influencing the probability of purchase. Keep in mind that not only the facing that is given to a product is important, the results are much better when the location and space are improved.
Sales of a product may vary if the level of exposure is modified
The results of an investigation carried out in the USA (over 400 references that were observed for long enough periods of time) show that there are average percentages of variation in the sales of products according to the level they occupy on the shelf.
The results are shown in the following Graph. It shows us, for example, that if you lower a product from eye level to hand level, sales of that product could drop 20%. If you decide to lower a product located in the hands area to ground level, sales could drop 40%.
With the data from this research, merchandising scholars recommend that a product should gradually rise to the highest level of perception and then descend to the lowest level without going through the middle. That is to say, to upload a product it is convenient to do it in a staggered way, because sales would increase much more. To lower a product from the upper level or from the eyes to the other levels, they recommend descending it directly because a lower percentage of sales would be lost.
For example, if the product sells 100 units and is located on the lower level (floor), and you decide to raise it to the upper level (eyes), sales would increase to 178 units. Whereas if you gradually raise it; that is, if it rises from the level below that of the hands and then from this level to the level of the eyes, sales would rise first to 134 and then to 219 units.
To make the descent the situation is reverse. Directly lowering a product from the upper level (eyes) to the lower level (ground) would result in instead of selling 100 selling 67 units. But if you gradually lower it, sales losses would be worse, going from selling 100 to selling only 48 units.
Don't think about a brand, worry about the category
The decision of what products are exhibited, where and how much space they will occupy in the shelves and gondolas of the points of sale affect the costs and sales of the businesses. Better exploit your spaces, the proper management of these depends on their growth. Do not think about a brand, think about the category (for example, toothpastes, detergents).
Ask yourself how important the category is to the consumer. He prefers to buy a category in his usual store, but is willing to change if his needs are not met. Expect consistency in the value for money, want to find your favorite brands and buy with certain frequency, etc.
Manufacturers / distributors want to maximize sales and profits of their brands; therefore, they pressure the trade to get the best space. Merchants have to worry about getting the most out of the category and allocate the spaces based on the set of brands.
The allocation of spaces they choose will influence the rotation of the brands and their minimum levels of stock.
