5 questions to ask when measuring success on the shelf
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Defining the criteria for success helps your business to quantify progress now and achieve greater success later. 5 Questions to Ask When Measuring Success on the Shelf will help you to develop ideas for designing a retail strategy which focuses on those things most important to your business. The metrics within can be tweaked to work for any scenario, and can be used to build a dynamic retail success model for your products. Following the advice in this guide will help you to make better educated decisions in every facet of your business. 5 Questions to Ask When Measuring Success on the Shelf offers advice on: - Why Your Product’s In-Store Position Matters - Which Promotions Are Working Best - Who Your Target Demographic Is - What Retailer Behavior Can Teach You About Your Product For a more in-depth discussion on this topic, check out our Best Practice Guide for Success on the Shelf at http://www.repsly.com/best-practices-guide-for-measuring-your-success-on-the-shelfTRANSCRIPT
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5 Questions to Ask When Measuring Success on the Shelf
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Point of Purchase KPI
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Where are People Buying the Product?
Point of Purchase literally means where in-store the product is being taken from for purchase.
At a macro level, this KPI can be used to compare sales at each channel over a period of time.
At a micro level it can be used to compare sales at the different placements within a store.
Understanding where a product is performing well and where it is performing poorly is invaluable when making decisions about where to sell a product, and how to best promote it.
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Example “Points of Purchase”
Beverage Cooler
Checkout Racks
Behind the Register
Outdoor Display
Locked Case
Endcaps
Online Ordering
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Sales by Promotion KPI
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How Does the Product Stand Out?
Differentiating a product from competitors can mean using unconventional thinking. Product Managers may be running any number of promotions for their products, and sales may be through the roof, but they should always be asking:
Are promotions running as efficiently as they could be?
Are we running the best promotion for this specific venue?
Don’t simply look at which promotions are most successful; take into account other factors which influence sales of a product in different venues.
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Factors Influencing Promotions
Timing
Form of Media
Message Context
Brand Image
Retailer Incentives
Levels of Discount
Target Consumer Audience
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Sales by Demographic KPI
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Who’s Buying the Product?
For any product to sell well, there needs to be a base of consumers who want to buy it. When patterns develop in a segment of consumers, they can be identified as a target market, or target demographic.
Many companies look at who their target market is, but most don’t go deep enough.
Understanding the demographic as a person, and not just a consumer, is key to effectively targeting them.
Connecting with customers on a personal level so that the customer-product interaction is more personal and inviting is a great way to boost sales and brand loyalty among consumers.
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What to Look for in a Demographic
Age
Location
Income
Favorite Shows
Hobbies
Relationships
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Sales per Facing / Sales per Square Foot KPI
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How Much Space Does the Product Need?
While many businesses may jump to the conclusion that more space is always better, this is not the case.
Retailers treat shelf space as a valuable commodity, and charge accordingly.
The key to optimizing facings and retail space is knowing the break-even point where the cost of additional space outweighs the profits from additional sales.
Finding out how to optimize space in a retail location will help to bring in more profits, and will see businesses throwing away less money on under-utilized area.
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Factoring in Costs for Shelf Location
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Shipment Changes KPI
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What do Retailers Think About the Product?
Something that many business owners overlook, patterns that develop in shipment orders say a lot about a retailer’s opinion of a product.
If shipment orders are steadily declining, the retailer may be phasing out the product to switch to a competitors brand, or may be unhappy with the manufacturer relationship.
Many retailers won’t let their thoughts be known until the process is complete and business owners have lost a valuable avenue for sale of their product.
Tracking shipments from retailers gives business owners a window of opportunity to step in and ask questions when they notice a downward trend.
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Shipment Patterns to Watch For:
Reduced Order Size
Reduced Order Frequency
Regular Orders Skipping a Purchase
Delays in Payments from Retailers
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Personalize Your KPI’s.
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There is no one-size-fits-all KPI bundle.
To best utilize KPI’s, businesses need to understand every aspect of the retail process, from retailer relationships to merchandising displays.
Collecting data on business operations is important, but business owners and managers shouldn’t get carried away, as there are costs associated with analytics and data collection.
Determine what metrics are most important to the business, and what method is best to collect that data. Using a field team with field activity management software can make collection easy—it’s what decisions are made based on that collected data that matters.
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Thank you!