Optimizing Selling Space Productivity

Optimizing Selling Space Productivity

Selling space is one of the most expensive assets retailers have after payroll.  Hence it is vital to optimize space productivity as much as possible.  But what does optimization mean?

If a retailer's goal is to maximize market share, focus on sales per square foot.  If it is to maximize profitability, focus on achieved gross margin per square foot.  Many factors need to be considered to achieve either goal.  Width and depth of assortment is a key issue and generally owned by the Buying and Merchandising Department.  They will have an important say in how much space they need in stores, but stores are not elastic, so not every department may get all it needs.  How the space is allocated at department level is also critical, and where it is located is important too.  The "middle of Lidl" is in the back middle of the store not the front.  Presentation of merchandise is critical. Does the presentation look like the store loves its product?  If it doesn't, why should the shoppers?  These are just a few of the considerations.

For more information go to our resources section and it will point you to other sources of input as well.  It includes options that omni-channel strategies now give to optimize productivity.

Posted by Brian Hume
26th April 2024

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