A study on Shelf space management

Relevance of Shelf space management
Impact of retail boom in India shows its reflection in Kerala also .Many of the global as well as domestic retail giants such as Lulu ,Reliance, Spencers , Big Bazar, More etc are trying to enhance their footprint by setting up new format of retail shops in Kerala. The market potentiality of Kerala market is one of the reasons for this. When these organised players are trying to strengthen their position, the existing retail players in both the organised and unorganised sectors in Kerala are struggling to gain competitive advantages. SupplyCo, which is going to face an immense competition from the retail giants, as it is a major retail player in the public sector in Kerala.
The State-owned Kerala State Civil Supplies Corporation, popularly known as Supplyco, is readying itself to face the competition in retail market in the State. Supplyco, the biggest retail chain in India in the public sector with more than 2,700 retail outlets in Kerala, has chalked out strategies to attract new customers and retain the existing consumers. The new initiatives adopted by the company equipped to meet the competition from those retail giants are as follows:
 Computerised and networked all the depots and retail outlets.
 Stretch retailing (door delivery system).
 E-retailing.
 The privilege card facility.
 Modernisation of human resources to face the challenges.
 Managing the shelf space etc.
Among these initiatives, by realising the importance of shelf space in the organised retail, a study is conducted on the shelf space management of retail outlets of SupplyCo , as it represents the whole organised retail outlets in the public sector in Kerala. The main objective of the study is to check whether the shelf space management strategy of SupplyCo is competent to other major retailers in Kerala.
The shelf is the location where any product meets the consumer, whereas the shelf is also the final inventory location in the retail supply chain. Actually the shelves of a retail outlet is like a ‘silent sales man’, that is, it is in such a way that inspiring the customer to take product from the shelf and finally purchase it. Shelf space management is also called as category management. It can be defined as a retailer-supplier process of managing categories as SBU (Strategic business units), producing enhanced results by focusing on delivering consumer value.. It would be developed as a strategy for retailers to successfully compete in each retail category for the shopper’s loyalty and money. It recognises the interrelatedness of products in the category and focuses on improving performance of whole product category rather than the performance of individual brands.
By observing the shelf space allocation strategy followed the retail outlets of SupplyCo, it is being found that the shelf space management is not that much competent to in the following ways:
 There are no display staffs for displaying the products on the shelves attractively.
 Some products are having not that much movement (static) from their respective shelves. This leads to some brands in certain product category are accumulating in the shelves which in turn creating problems in supply chain management of the organisation.
 They are not following a systematic way of arranging the product in the shelves of outlets.
 Sales achieved per square feet for a category is comparatively low with that of retail giants in private sector.
 One of the main problems is that few of the product categories are utilising more space in the shelf but keeping low sales. This will adversely affect the overall sales of the retail outlet.
 Shelves are not attractive in nature. The retail shelves are having the duty of silent sales man, which encouraging the prospective customers into actual customers. For this purpose the shelves should designed to be attractive.
 The interrelated factor that affects the shelf space, the interior store design, is not attractive and competing.
 SupplyCo is having some private labels but not attractively packaged. If it is so, it would enhance the sales.
Recommendations regarding the improvement of shelf space management for the retail outlets of SupplyCo in order to gain a competitive advantage over the other retail giants in Kerala are the following:
 The shelf space allocation strategy become more effective and attractive only by appointing display staffs in the outlets.
 Making sure the right space is allocated for the right product is a key part of a store’s productivity.
 Attempt to improve the handling of their private label product development and also presenting it also in a manner (including advertising) similar to a national or an international brand. Private labels of SupplyCo should have to pack in attractive packages, which help to increase the sales.
 Ensure enough space for the smooth movement of shopping cart in between the shelves in the outlets. While shopping this would be convenient to the customers.
 Try to allocate more shelf space to FMCG products that contribute more sales per square feet.
 Apply JDA Software’s Space & Category Management solutions, which use advanced category management technology to create a bridge between the supplier and retailer. This allows valuable insight into each other’s business, so that shelves are carefully planned in line with a particular retailer’s sales goals.
 An area in a store that receives the most traffic can be used to sell the higher demand items or promote the seasonal products such as produce.
The allocation of scarce shelf space among competing products is a central problem in retailing. Shelf space allocation affects store profitability. Retailers are increasingly looking regarding how to stock shelves for maximum profitability, while improving the shopping experience for their customers. Understanding shelf space availability, along with consumer demand, allows retailers to develop a replenishment strategy to avoid excess inventory and plan for a rise in the purchasing of a product based on season or promotions. Hence by keeping all the aforesaid matters regarding shelf space management, SupplyCo could make a competitive advantage over the other retail giants in Kerala.

Posted by: RENJITH BABU.M
renjithbm@rediff.com