Increasing Shelf Space

Written by:Nithin Narayanan

One of the significant concerns for any manufacturer is to increase the visibility of its products on the retail floor. Generally manufacturers have their stores to retail merchandise, but those who do not, do have tie-ups with other retailers to sell products. In case of the latter, shelf space is directly related to the sales of the products. But as one knows space is a premium commodity. In this scenario, the manufacturer or the supplier has to convince the retailer that he/she could increase profits if retailers increase their shelf space in the store.

Before meeting the retailer, one has to have a pragmatic picture of the current rate of success of its products.

How is the product positioned among customers?

Are retailers happy with the product displayed?

Is the relationship with the retailer good?

These are some of the questions to be answered before deciding to increase shelf space.

Once these priorities are clear, there are a host of options to choose from in order to increase shelf space.

Current Success- if the product is doing well, then one can convince the retailer to increase shelf space at the cost of other under-performing merchandise.

Category Management- this kind of process involves thorough research on the sector, competition and the consumer. More or less like a SWOT Analysis. It is a time consuming procedure and requires co-operation between the retailer and the supplier. As today we have Point –of-sale data, it is much easier to analyze the behaviors of the customers.

New Products- Firms can negotiate either the retailer if it wants to introduce new products in the market. Generally to do so, the company requires additional space to display new items.

Line Extension- If the current product is doing well, then a product extension is a good way to increase shelf space. One thing to notice here is that the extension should have a different image and should not be based on the parent brand. In other words it should have a unique USP other than the existing product.

Packaging strategies- If the packaging is elaborate it would also require more shelf space to encompass the whole product range. Innovative packaging would also act as a medium of promotion for the product.

All in all one has to think about myriad of reasons and factors to increase shelf space as it is directly related to revenue. This concept is quite new to India; hence a lot has to be done and researched in this regard.