Published on: April 28, 2004
Shelf management is the key to maximizing profitability and maintaining satisfied customers, but the question that retailers need to answer is whether their companies are tapping into the potential product category increases through efficient distribution and in-store speed to shelf activities.
Next Tuesday at the annual Food Marketing Institute (FMI) Show in Chicago, Brian Harris – a pioneer and thought leader in the field of category management – will be part of a Learning Lab that will examine these issues in detail. Both retailer and supplier perspectives are expected to be addressed, as both sides seek to gain a better understanding of today's shelf management partnership challenges and opportunities.
The Learning Lab, entitled “Whose Shelf Is It Anyway?”, is scheduled for Monday, May 3, from 8:15 to 11 p.m.
To get a preview of this session, we engaged Brian Harris in an exclusive e-interview:MNB: Why do you think that most retailers are not tapping into potential product category increases through efficient distribution and in-store speed to shelf activities? At this point in the supply chain continuum, it would seem to be an obvious goal and top priority?Brian Harris:
Key reasons are 1) lack of responsibility and accountability at store level to get new products to shelf as quickly as possible and to keep these products on the shelf; 2) a "wait until someone else (broker, supplier, third party service) shows up to do the work to get the product set on the shelf" mentality; 3) lack of information to set priorities among the continual flow of new products so that the highest opportunity new products are clearly understood and get the quickest attention; 4) lack of well defined procedures at store level for how new products are ordered, received, handled and shelved (for many retailers this work is performed on a "get it done as best you can" basis); and 5) slow, antiquated communication procedures used by many retailers and wholesalers to get the right information more quickly to the right place.
I'd also add that this is an area in which there is not a lot of knowledge of "best practices".MNB: Are there different strategies that need to be employed by companies of different sizes?Brian Harris:
The short answer is that there shouldn't be.
Slower than acceptable speed-to-shelf rates for new products costs all retailers -- big and small.
Obviously one real difference is that smaller retailers need to rely more on the wholesaler's support to be successful in getting new products to the shelf faster. This extra link in the chain requires tighter communication, clearer priorities, and more integrated business processes between the 3 parties involved -- the supplier, the wholesaler, and the retailer. (In a study we did a couple of years ago, we found that on average it took retailers served by wholesalers almost twice as long to reach similar shelf availability levels for new products compared to larger chain retailers. The lost sales and profits for all parties are substantial. This finding has been a wake-up call to the wholesale-supplied channel and we have seen some definite improvements in this area in the past year or two).
For all retailers, big and small, the performance benchmarks keep getting higher as other channels and competitors develop systems capable of getting new products to the store and shelf faster.MNB: Do retailers and manufacturers have different priorities in pursuing these same goals? Or are the goals different in some sort of fundamental way?Brian Harris:
Getting new products to the store and shelf faster is one area where all parties gain. The disadvantages of being slow to shelf with new products are obvious. These include missed sales and profit opportunities when products are their "hottest", inability to fully leverage the early marketing support, and most of all, dissatisfied consumers. (One study found that the consumers most unhappy about a retailer's failure to deliver on new product availability are the retailer's most loyal customers!).
This is an area where poor performance hurts everyone!
Therefore, while their will always be differences in goals of the supplier and retailer arising from different strategies with respect to issues such as how much variety is needed in a category, the right timing of the new product, and which consumers are the key target for the new product, the overall strategy of getting new products available for purchase on the shelf as fast as possible is a shared goal.MNB: What do you want retailers and suppliers to walk away from your Learning Lab knowing and able to accomplish?Brian Harris:
The key objectives of the Lab Session are 1) to reinforce the sales and profit benefits possible from improving performance in two key assortment management areas -- faster speed-to-shelf for new products and better integrity levels for shelf planograms; 2) to expose attendees to several very practical tools that can be used to improve performance in each of these areas; 3) to present some "best practices" as benchmarks in each area; and 4) to share the experiences of a retailer (Blue Goose Super Market), a wholesaler (AWG Kansas City), and a supplier (Clorox) in each of these areas.
The Lab will also feature two workshops in which the attendees will have an opportunity to work with these new tools and begin to see the value of their use in their business operations.For more about FMI 2004, go to: