Merchandising rules for shelf space allocation with product categorization and vertical positioning

Abstract

Visual merchandising is assumed to be the main component of retailing; the significance of it is highlighted by academics and practitioners. This research focused on the in-store merchandising strategy of product allocations and describes the relations between such tactics and customers' perception of store layout, traffic direction, brand awareness, and the appropriate assigning of products to shelf levels, based on their brand as well as price. For retailers, this study provides an overview of incorporating different merchandising tactics into a shelf space allocation model which is applicable at stores selling branded and popular * The project is financed by the Ministry of Science and Higher Education in Poland under the program "Regional Initiative of Excellence" 2019-2022, project number 015/RID/2018/19, total funding amount 10,721,040.00 PLN.fast-moving products. The authors carefully adapted the product allocation approach on the planogram, as well as the way in which products could be placed on different shelf levels. This model satisfies the retailers' goals and may have a significant effect on sales. Thus, the study provides essential insights into the influence of other products, such as complementary, substitutable and clustered ones, in the assortment range.