Aisle Experts Have Competitive Edge
By George Anderson
Paul Weitzel, vice president, Willard Bishop Consulting writes in the February 2003 Competitive Edge newsletter, “When you’re an aisle expert, you’re in a position to offer a complete understanding of and vision for delivering greater value across the entire aisle. Aisle experts combine information on pricing, aisle penetration and category closure, affinity merchandising, operations, packaging, assortment, and real space optimization principles to deliver greater value – in the ‘right’ stores.”
Mr. Weitzel offers Wal-Mart’s Neighborhood Markets as an example of stores that demonstrate the value of aisle management. He observes:
- Wal-Mart uses a variety of shelving including regular gondolas and warehouse racks in the same aisle to effectively display multiple-size offerings in given categories.
- Neighborhood Markets uses multi-packs instead of individual units in categories such as canned goods to increase volume and improve labor efficiency.
- The stores offer multiple purchase pricing for products that are not available in multi-packs.
- High volume categories such as produce are displayed in-store in the same containers in which they were shipped. This improves efficiency in keeping product stocked while simultaneously reducing handling costs.
- The stores create excitement with product offerings in a specially designated in-and-out section.
- Great emphasis is given to eliminating product duplication. Mr. Weitzel writes, “One of the unique aspects of the Neighborhood format is that Wal-Mart looked at each aisle as an entity and then implemented the necessary changes to optimize sales and profits without diminishing merchandise effectiveness. Operations plays a much greater role in this format compared with the traditional supermarket format, and is reaping the benefits.”
Moderator’s Comment: What are your thoughts on the
need, benefits and practical considerations of developing an aisle management
strategy?
Mr. Weitzel makes clear the need for collaboration between
retailer and manufacturer to achieve the full benefits of aisle management.
[George
Anderson – Moderator]
Aisle and Total Store Management simply take Category Management up a notch. Category management delivers to the shelf the best assortment available, removing unproductive items and allocating space in the most efficient way. For years, retailers have been asking manufacturers to be category captains and in doing so have demanded that they “do the right things” for the category and not just for their products.
Aisle and total store management simply take that concept a step further. In the past, category captains may have been locked into the amount of space that was historically allocated to the category. Retail category managers may have been resistant or unable to change the space allocated to the section as the adjacent space “belonged” to another category manager. If that category manager was compensated based on the performance of their category only and not based on the performance of the total store then there was no incentive to give up space. As a result gaining space for growing categories became a Herculean task.
Retailers who are truly interested in total store management will need to put aside the status quo and ensure that their compensation systems encourage their category managers to “Do the right things” for the greater good of the entire store.