Can shelf space management techniques be used effectively for fresh items?

Random weight items, including produce, meat, poultry, seafood, and deli, ostensibly cannot be managed in the same way the center-of-store categories are. However, what you can do to address these categories may surprise you.

Stocking sections with random weight items do present challenges to the traditional category and space management process, and these categories are typically not planogrammed like their center-of-store counterparts. Instead, they are often planned using a macro space solution, Microsoft Excel, or, all too frequently, the reset teams and store personnel are left to make ad-hoc decisions based on intuition, rather than data.

All of the above approaches lack the analytical ability to quickly and accurately calculate item and shelf capacity, days of supply, ROI, or to forecast out-of-stocks and lost sales. Macro space solutions are designed to manage categories, aisle and departments – not individual SKUs. Other workarounds like Microsoft Excel tend to be cumbersome and time consuming.

The solution to this challenge may actually be nearer than you expected. With a little data manipulation and exploration of features that you may not be currently using in your shelf space planning solution, you can apply your category and space management best practices beyond center store.

The challenges of random weight items and how to overcome them

1. Dimensions

Item dimensions are a basic requirement to build a planogram. However, random weight items are by definition different sizes, so assumptions have to be made in order to effectively planogram these categories. For items such as packaged chicken breasts, steaks, heads of lettuce or bags of grapes, an average sellable product size can be used to determine dimensions used to describe the ‘average’ product. For loose items such as nuts or candies, the case or display container dimensions should be used.

2. Methods of Merchandising

Baskets, cases, trays, dump bins, and pyramid logs are all different merchandising options you will need to add to your vernacular. They enable you to create a perfect pyramid stack of apples, a bin of loose garlic, or a case of bulk candy.

3. Fixtures

Sloped shelves, grills and pallets are fixtures typically used to merchandise fresh categories. These should cover the majority of cases, whether it is a pallet of watermelon, refrigerated meat case or fresh vegetables.

4. Data

Syndicated providers offer equivalized volume measures (EQ), often in ounces, pounds, gallons, or cases (or metric equivalents – kg, ml, etc.). Your own point-of-sale data may already have volumes manipulated in this way. In the absence of this, it can often be calculated, e.g. (unit sales * size (oz) / 16); with EQ pounds being the result of the operation.

How do I execute planograms for fresh items?

Expanding your shelf space management repertoire with the features mentioned above can be all that is required to address most of the merchandising challenges that the produce, meat and deli departments will present. Once you have a planogram with space and inventory accurately modeled, together with equivalized data, you can apply your inventory and allocation models to optimize these categories.

More advanced calculations can be added using user-defined fields to calculate per unit movement, sales, or profit, or any other measure that can be derived from the EQ or unit volume.

Looking forward

Once you have established a foundation of planograms at cluster or store level for fresh categories, then the same data and planograms can be used to do more in-depth clustering and assortment optimization.

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