Measuring merchandising effectiveness
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Measuring Merchandising Effectiveness. ACNielsen Romania October 2005. Agenda. Defining the merchandising standards How can we determine the impact of merchandising on sales? Location types – examples POPM types - examples Merchandising criteria – examples The best mix.

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Measuring merchandising effectiveness

Measuring Merchandising Effectiveness

ACNielsen Romania

October 2005


Agenda

Agenda

  • Defining the merchandising standards

  • How can we determine the impact of merchandising on sales?

  • Location types – examples

  • POPM types - examples

  • Merchandising criteria – examples

  • The best mix


Defining merchandising standards how do i want my products to look like in the stores

Defining Merchandising Standards How do I want my products to look like in the stores?

In standards definition/fine-tuning, several main areas should be covered:

  • In which area of the store do I want my products to be present?

    • In Category Section

    • In Main Traffic

    • End of Isle

    • At Check-Out

    • Secondary Placement

  • What do I place?

    • Products

    • Products aided by POPM

    • Other aids

  • How do we place?

    • Merchandising criteria

      And most important.......WITH WHAT RESULTS?.......or......

      WHAT IS THE MOST EFFECTIVE MERCHANDISING MIX FOR MY

      PORTFOLIO ?


Within the multitude of messages in a store the shopping experience is not always easy

Within the multitude of messages in a store, the shopping experience is not always easy …

Through merchandising we can help our customers decide easier and better…. And hopefully to select OUR brand 


A successful merchandising program is a synergy of several factors

A successful merchandising program is a synergy of several factors

  • The Impact of the merchandising activities on the sales depends on a lot of factors:

    • Category type

    • Store type

    • The brand

    • Quality of the aids

    • Competitive activity

    • Implementation quality

    • Permanent review

    • Other factors

  • The impact can be determined through:

    • Past evaluation

    • In store tests of new concepts


How can we determine the impact of merchandising on sales

How can we determine the impact of merchandising on sales?

How we analyse:

1) First we analyse individual activities in terms of scope and impact on sales:

  • We compare the sales of the stores where a specific activity is present with the average of all stores or with the stores not having that activity

  • We have to bear in mind that the merchandising activities are generally placed in the “good” shops. Thus the results per-se show higher impact due to the fact that these shops are by definition preferred stores for that brand.

    Example:

  • Product in Main Traffic Flow - 5% contribution

  • Floor Display in category section - 6% Contribution

    2) Then we analyse the interactions between these activities, resulting in a joined impact :

    - Main Traffic Flow + Standing Display in category section - 5.5% contribution

    This shows that adding up of the activities is not necessarily an additive process but a multiplicative process.

    3) Finally we determine the combination of activities that delivers the highest impact (sales, share or impact on competition).


Locations types

Locations Types

  • Category section: where most products of a specific category are placed

  • In main traffic: on (one of) the main route(s) from entry to exit

  • End of Isle/end of gondola

  • At Check-out

  • Secondary placement: any other location in the store except of the above

  • …….


Popm types

POPM Types

Most frequent POPM encountered in the stores:

  • Floor Display

  • Shelf Display

  • Poster

  • Sticker

  • Wobblers

  • Shelf stopper

  • Section marker

  • Hanger

  • Stripes

  • Shelf display

  • Shelf liner

  • Shelf tray

  • Shelf talkers

  • Header board

  • Counter display

  • Window display

  • Pyramid

  • Money tray

  • Leaflet tray

  • ........


Measuring merchandising effectiveness

Location and POPM ScopeIn how many stores my brand and its main competitor are in Location Y and have POPM Z?


Measuring merchandising effectiveness

What Activity has the highest impact ? How am I performing when...Eg. I have Shelf liners in the store and I am at Check-out ?

Other correlations:

My total company share when I have...

My sales per shop when... (how important are these shops)

My competitor share when I have….


How many popms should i place to obtain maximum impact but not waste money

How many POPMs should I place to obtain maximum impact but not waste money?


How does my popm impact my competitor brand

How does my POPM impact my competitor brand ?


What is the combined impact of activities for me and my competitors

What is the combined impact of activities (for me and my competitors)?


Merchandising criteria

Merchandising Criteria

Most frequent criteria encountered in the stores:

  • Facings

  • Brand block

  • Beginning/end of section

  • Eye level/ shelf no X

  • Near product Y (own or competitor’s)

  • Within segment Z

  • Near category W

  • Exclusive location

  • At hand level

  • Product order

  • Coupons

  • Coupon/promo/demo ladies

  • Product sampling

  • Long term appearance in the leaflet

  • ...


Measuring merchandising effectiveness

What Criterion has the highest impact ?How am I performing when...Eg. My products are displayed in Brand Block in channel ABC?


Measuring merchandising effectiveness

What Criterion/Level of criterion has the highest impact ?How am I performing when...Eg. I have less than 7 facings in channel ABC?


Measuring merchandising effectiveness

At the end of the analysis, the most effective standard for a specific channel is determined (based on past record)

For example, Brand X

  • In Hyper/supers the optimal merchandising mix includes:

    • In Category section:

      • Floor Display (2 stands)

      • Shelf Liner

      • min 10 facings placed in brand block at eye level and next to key competitor,

      • price communicated

    • paired with a Second Placement in Main Traffic.

  • The impact range is: 8.9% to 18.9% more volumes, depending on the store size and competitive activity

  • On main competitor the impact is – 5% to – 8.9% less volumes


Measuring merchandising effectiveness

Thank you for your attention!


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