Shelf optimization

What is the challenge?

The arrangement and filling of shelves is practiced both in retail and in the intralogistics of warehouses. Product placement on the shelves, for example by tactical arrangement in placement height, combination and quantity, has an impact on the respective retail sales. Shelf space is becoming more valuable due to the increasing number of competing products. However, shelf layout issues are complex and involve various factors such as buying habits and sales and contribution margin of the respective products. Optimal utilization of storage racks is also a complex and dynamic daily task in intralogistics warehousing, for example in order to optimize the movement sequences of warehouse employees.

What data can help?

• Static and dynamic product and assortment data
• Data on the warehouse/retail space (number of shelf segments and their arrangement, shelf zones and dimensions, number and structure of shelves as well as customer flow direction, current sales figures)
• Scanner data from retail or intralogistics (electronic shelf labels)
• Historical or forecast data on customer buying habits

How can companies use their data?

By using data, merchandise carriers and merchandise groups can be positioned in such a way that an optimal placement in terms of quantity and arrangement – either for sales optimization in retail or process optimization in intralogistics – is achieved. Software enables the correct arrangement of products on shelves and in storage areas. Local optimization problems are solved on the basis of the data. Individual suggestions for space and shelf optimization are generated. 

Where is this use of data already being applied?

The Alois Müller dairy has developed the “ROSY” shelf optimization app. It is used to record the shelf situation of dairy products (the so-called white line) in food retailing on site in real time. This database and additional data on customer preferences are used to generate suggestions for optimizing shelf stocking. Sachsenmilch uses this app to optimize the placement of its own products on retail shelves.

The IT company Relex offers retailers software for retail optimization. For space and shelf optimization, Relex analyzes sales data and local data and generates forecasts to avoid shelf overcrowding and optimize the arrangement of products.

How does this use of data contribute to value creation?

Optimized shelf planning increases product sales and helps avoid short sales. Shelf optimization in intralogistics ensures more efficient, accelerated processes. The contribution to value creation therefore lies in the optimization of assortment, inventory and space in relation to profit-relevant variables of the sales and contribution margin and for the optimal servicing of demand.

Sources: plan + impuls GmbH (2018), Relex Solutions GmbH (2020)