A sensitivity analysis of retailer shelf management models

Borin, Norm; Farris, Paul

doi:10.1016/0022-4359(95)90005-5

Cited by 74 publications

(39 citation statements)

References 26 publications

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“…The two data sets analyzed contain 6 SKUs and 18 SKUs, respectively. In a followup study (Borin and Farris 1995), the authors examine the sensitivity of the analysis to errors in the judgements. More specifically, they find the maximum degree of error that may be introduced before the model yields assortments and shelf allocation that are inferior compared to those produced by the merchandizing rule of thumb to set share-of-shelf equal to share of sales.…”

Section: Literaturementioning

confidence: 99%

Interaction Between Shelf Layout and Marketing Effectiveness and Its Impact on Optimizing Shelf Arrangements

Nierop¹,

Fok

Franses

2008

Marketing Science

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I n this paper, we propose and operationalize a new method for optimizing shelf arrangements. We show that there are important dependencies between the layout of the shelf and stock-keeping unit (SKU) sales and marketing effectiveness. The importance of these dependencies is further shown by the substantive profit gains we obtain with our proposed shelf optimization approach. The basis of our model is a standard sales equation that explains sales using item-specific marketing effect parameters and intercepts. In a Hierarchical Bayes (HB) fashion, we augment this model with a second layer that relates the effect parameters to shelf and SKU descriptors. We also take into account potential endogeneity of facings. After estimating the parameters of the two-level model using Bayesian methodology, we carefully investigate the dependencies of SKU sales and SKU marketing effectiveness on the shelf layout. Next, we search for the shelf arrangement that maximizes the expected total profit using simulated annealing (SA). We appear to be able to increase profits for all the stores analyzed, and our approach appears to outperform well-known rules of thumb.

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Section: Literaturementioning

confidence: 99%

Interaction Between Shelf Layout and Marketing Effectiveness and Its Impact on Optimizing Shelf Arrangements

Nierop¹,

Fok

Franses

2008

Marketing Science

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“…It complements the FSSD-derived model because it helps to evaluate framing of consumer behaviour change content within the initiatives, whereas the former assesses the strategic coherence of their planning. Retailer devices that can be used to influence consumers Price and price promotions (Shankar and Bolton, 2004) Advertising material designed to appeal to individuals, rationally or emotionally (Vakratsas andAmbler, 1999, Stafford andDay, 1995) Point of sale information (Broeckelmann and Groeppel-Klein, 2008) Product packaging (Gómez et al, 2015, Löfgren et al, 2008 Social media, through which groups self-identify by (Chu andKim, 2011, Smith et al, 2007) Shared cultural understanding through, for instance, advertising designed to appeal to shared engagement, or opinion leader endorsement, or through workplace initiatives (Southerton et al, 2011) The assortment of products and shelf space given to them (Kök et al, 2009, Borin andFarris, 1995) Product shelf positioning (van Nierop et al, 2011) Source: Southerton et al(2011), Darnton andEvans (2013) and extended by the authors to include, and categorise, retailer devices.…”

Section: Models Of Consumer Behaviour Change Mechanismsmentioning

confidence: 99%

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

Morgan

Tallontire

Foxon

2017

Journal of Cleaner Production

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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.T 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 T ISM I S M 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 2 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.

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“…Shelf space planning considers facing and replenishment decisions (see e.g., Corstjens and Doyle, 1981), while assortment planning considers the question of which and how many different products to offer (Mantrala et al, 2009). In the past two decades, numerous models and analytical solutions have been proposed to deal with both areas of research (e.g., Anderson and Amato, 1974;Borin and Farris, 1995;Borin et al, 1994;Brijs et al, 2000;Brijs et al, 1999;Bultez and Naert, 1988;Bultez et al, 1989;Corstjens and Doyle, 1981;Corstjens and Doyle, 1983;Fadılog lu et al, 2010;Hansen and Heinsbroek, 1979;Russell and Urban, 2010;Urban, 1998;Yang, 2001). In the shelf space planning literature, researchers traditionally apply the individual space elasticity and crosselasticity between products to determine which products to stock and how much shelf space to display these products, whereas, the main body of literature on assortment planning models is based on the estimation of substitution effects and develops optimization algorithms to define inventory levels by stochastic demand.…”

Section: Category Management and Assortment Planningmentioning

confidence: 99%

Private labels and retail assortment planning: a differential evolution approach

et al. 2015

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Despite the longstanding recognition of the importance of product assortment planning (PAP), existing literature has failed to provide satisfactory solutions to a great deal of problems that reside in this area of research. The issue of optimal assortment planning in the retail sector becomes even more important in periods of economic crisis, as retailers must adapt their product portfolios to new evolving patterns of consumer buying behaviour and reduced levels of consumer's purchasing power.Private labels (PLs) typically experience significant growth in times of recession, due to their low prices, and the reduced disposable income of households. In this direction, the present paper introduces Differential Evolution (DE) to assist retailers in adapting their product portfolios in periods of economic recession and facilitate strategic PAP decisions, related to a) optimal variety of PL product categories, b) optimal service level of PL merchandise within a product category, and hence, c) optimal balance between PLs and National Brands (NBs) in a retailer's product portfolio. The interrelated issue of assortment adaptation across different store formats is also considered. Economic recessions contribute to the prolonged upward evolution in PL share, and hence, our mechanism facilitates decisions that are nowadays more important than ever before. The proposed mechanism is illustrated through an implementation to an empirical dataset derived from a random sample of 1,928 consumers who participated in a large-scale computer assisted telephone survey during the current economic crisis period.

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A sensitivity analysis of retailer shelf management models

Cited by 74 publications

References 26 publications

Interaction Between Shelf Layout and Marketing Effectiveness and Its Impact on Optimizing Shelf Arrangements

Interaction Between Shelf Layout and Marketing Effectiveness and Its Impact on Optimizing Shelf Arrangements

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

Private labels and retail assortment planning: a differential evolution approach

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