Evaluation – Optimizing a Category Layout

During a category review, a retailer’s category captain presented a new shelf arrangement which would improve penetration, while maintaining or growing sales, a mutual goal. To address the retailer’s own brand objectives in addition, they developed a hybrid shelf concept with the intent of also growing own brand sales.

The Challenge

Introduce a category arrangement that increases penetration and own-brand sales, while maintaining overall category sales. 

Method

The retailer had recently implemented a practice of using ShopperMX™ Indicators to evaluate all significant category changes prior to in-market execution. The category buyer worked with a cross functional team to visualize the current planogram, the captain’s initial recommendation and the buyers hybrid own brand planogram. A shelf indicator was used to evaluate the two test versions relative to the current concept.

The category captain’s recommendation would have increased penetration, but the hybrid solution increased the gain by 14%.  Upon further investigation, the hybrid version performed better on other KPIs:

  • 7% increase in category sales
  • 14% increase in private label sales
  • 5% increase in units per buyer

Results

Implementing the hybrid shelf resulted in $920K in incremental sales and $275K in category margin for the retailer.

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