Achieve up to 40% Reduction in Cost Per TB

by IBM

Authored on: Mar 05, 2013

Download When you go into the supermarket do you ever wonder how many different products are on the shelves? Do you wonder how they determine what goes on each shelf? All of the shelves are shared among many products. What gets placed on the bottom shelf? What goes on the top? One week your favorite item might be at eye level, and the next time there may be a sale item in that same spot. How do they determine the value (such as return per foot of frontage) of each shelf? The supermarket often po-sitions high-margin (impulse buying) items close to related items; for example, premium buns, wraps and condiments at the deli counter, trying to get the greatest return from that positioning.

The overall goal is to get the greatest return from all of the store's shelf space both premium and hard-to-reach, so this is an ever-changing proposition, with grocery stockers making regular adjustments to maximize the latest strategy and promotions. Maximizing sale of more profitable items is an important measure of effectiveness.