A model and case study for efficient shelf usage and assortment analysis

In the rapidly changing environment of Fast Moving Consumer Goods sector where new product launches are frequent, retail channels need to reallocate their shelf spaces intelligently while keeping up their total profit margins, and to simultaneously avoid product pollution. In this paper we propose an optimization model which yields the optimal product mix on the shelf in terms of profitability, and thus helps the retailers to use their shelves more effectively. The model is applied to the shampoo product class at two regional supermarket chains. The results reveal not only a computationally viable model, but also substantial potential increases in the profitability after the reorganization of the product list. © 2008 Springer Science+Business Media, LLC

Large UK retailers' initiatives to reduce consumers' emissions: a systematic assessment

In the interest of climate change mitigation, policy makers, businesses and non-governmental organisations have devised initiatives designed to reduce in-use emissions whilst, at the same time, the number of energy-consuming products in homes, and household energy consumption, is increasing. Retailers are important because they are at the interface between manufacturers of products and consumers and they supply the vast majority of consumer goods in developed countries like the UK, including energy using products. Large retailers have a consistent history of corporate responsibility reporting and have included plans and actions to influence consumer emissions within them. This paper adapts two frameworks to use them for systematically assessing large retailers’ initiatives aimed at reducing consumers’ carbon emissions. The Framework for Strategic Sustainable Development (FSSD) is adapted and used to analyse the strategic scope and coherence of these initiatives in relation to the businesses’ sustainability strategies. The ISM ‘Individual Social Material’ framework is adapted and used to analyse how consumer behaviour change mechanisms are framed by retailers. These frameworks are used to analyse eighteen initiatives designed to reduce consumer emissions from eight of the largest UK retail businesses, identified from publicly available data. The results of the eighteen initiatives analysed show that the vast majority were not well planned nor were they strategically coherent. Secondly, most of these specific initiatives relied solely on providing information to consumers and thus deployed a rather narrow range of consumer behaviour change mechanisms. The research concludes that leaders of retail businesses and policy makers could use the FSSD to ensure processes, and measurements are comprehensive and integrated, in order to increase the materiality and impact of their initiatives to reduce consumer emissions in use. Furthermore, retailers could benefit from exploring different models of behaviour change from the ISM framework in order to access a wider set of tools for transformative system change

Exploring success factors and constraints in German online food retailing

Paper presented at Rencontres Internationales de la Recherche en Supply Chain et Logistique (RIRL), Marseille, 20-21 May 2014. Abstract: This paper discusses success factors and constraints in online food retailing in Germany. While the German food retail sector is one of the largest in Europe, the sector’s online/Internet provision for customers lags way behind the UK and France. Prior research has considered the demand/consumer side of this dyad however little has been done on the supply/retail side. This paper addresses that gap through empirical research with three retailers, three logistics service providers and a marketing agency. There is good potential in this market but costs of fulfilment and service quality currently represent constraints

Reading before buying - exploring consumer attitudes toward informative function of packaging

Oftentimes, packaging is the first and only marketing tool consumers encounter before a purchase, therefore it is considered to be the most important communication and informative tool (Behaegel, 1991; Peters, 1994). The aim of the research is to better understand food label usage of consumers. To make the identification of behaviour patterns possible and to understand the way consumers use labels on packaging netnography has been chosen as the research method. We identified market factors in our research which result in label use. Based on our results, two large consumer segments were identified: conscious and non-conscious consumer behaviours. Reading information on packaging can be classified in two ways, according to method of use (superficial, conditional, incidental) and place (home, or point of sale)

Enablers and barriers in German online food retailing

This article discusses enablers and barriers in online food retailing in Germany. The German food retail sector is one of the largest in Europe; however, its online or Internet provision for customers lags way behind the United Kingdom and France. Prior research has considered the demand-consumer side of this dyad; however, little has been done on the online food supply-retail side. This article addresses that gap through exploratory empirical research with three retailers, three logistics service providers, and a marketing agency. There is good potential in this market but costs of fulfilment and service quality currently represent major barriers

A retail category management model integrating shelf space and inventory levels

A retail category management model that considers the interplay of optimal product assortment decisions, space allocation and inventory quantities is presented in this paper. Specifically, the proposed model maximizes the total net profit in terms of decision variables expressing product assortment, shelf space allocation and common review period. The model takes into consideration several constraints such as the available shelf space, backroom inventory space, retailer's financial resources, and estimates of rate of demand for products based on shelf space allocation and competing products. The review period can take any values greater than zero. Results of the proposed model were compared withthe results of the current industry practice for randomly generated product assortments of size six, ten and fourteen. The model also outperformed the literature benchmark. The paper demonstrates that the optimal common review period is flexible enough to accommodate the administrative restrictions of delivery schedules for products, without significantly deviating from the optimal solution

An assessment of the value of retail ready packaging

Thesis (M. Eng. in Logistics)--Massachusetts Institute of Technology, Engineering Systems Division, 2008.Includes bibliographical references (leaves 78-79).Use of retail-ready packaging reduces the costs of replenishing store shelves by eliminating the labor of removing packaging materials and stocking individual items on shelves. While reducing costs for retailers, retail-ready packaging formats increase costs for consumer products manufacturers. This research project assesses the use of retail-ready packaging across varying retailer types and products to determine conditions where the value of retail-ready packaging is maximized. Taking into account the supply chain benefits and costs for the retailer, six U.S. retail channels were selected for study: supermarket, wholesale club, limited assortment, super warehouse, drug and supercenter. One retailer from each of these categories was studied. The research found a wide range in opportunity for benefits and costs. The important factors influencing the net value of retail-ready packaging for retailers were product velocity, inventory carrying costs, SKU assortment relative to retail space and store replenishment procedures.by Kathleen Anne Jackson and Ling Bai Burke.M.Eng.in Logistic

Excess shelf space in retail stores : an analytical model and empirical assessment

Marketing and operations responsibilities meet in retail stores on the shelves. 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. Marketing assumes that the presence of inventory drives demand and therefore requires excellent operations. In operations, the main concern is with the trade-off between inventory holding cost on the shelf and the cost of replenishment. We gathered empirical data at a grocery retail chain and were able to combine marketing and operations data into a single database. This provided us the opportunity to conduct a unique analysis. We could compare the results of the space allocation decisions of the marketers with a basic analytic model that incorporates aspects of marketing and operations. Based on this comparison, we argue that significant amounts of excess shelf space exist for a large part of the assortment of a retailer. Excess shelf space is retail space that is not required to carry out the current operations with respect to customer service and costs. We also observed that the cost of replenishment is non-linear and dominates the inventory holding cost. Therefore, excess shelf space cannot easily be eliminated. Instead, excess shelf space in the presence of a non-linear cost of replenishment offers enormous opportunities for the development of new supply chain coordination mechanisms