Elsevier

Journal of Retailing

Volume 70, Issue 4, Winter 1994, Pages 301-326
Journal of Retailing

Shelf management and space elasticity

https://doi.org/10.1016/0022-4359(94)90002-7Get rights and content

Abstract

Shelf management is a difficult task in which rules of thumb rather than good theory and hard evidence tend to guide practice. Through a series of field experiments, we measured the effectiveness of two shelf management techniques: “space-to-movement,” where we customized shelf sets based on store-specific movement patterns; and “product reorganization” where we manipulated product placement to facilitate cross-category merchandising or ease of shopping. We found modest gains (4%) in sales and profits from increased customization of shelf sets and 5–6% changes due to shelf reorganization. Using the field experiment data, we modeled the impact of shelf positioning and facing allocations on sales of individual items. We found that location had a large impact on sales, whereas changes in the number of facings allocated to a brand had much less impact as long as a minimum threshold (to avoid out-of-stocks) was maintained.

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    Xavier Drèze is Director of MIS and a doctoral student, Stephen J. Hoch is Robert P. Gwinn Professor of Marketing and Behavioral Science and Mary E. Purk is Manager of the Micro-Marketing Project, at the University of Chicago, Graduate School of Business, Chicago, IL 60616.

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