How to Optimize Your Retail Space Replenishment

For a lot of us it feels as if the Christmas season starts earlier each year. Nowadays it seems like the only thing preventing retailers from pushing out Christmas products by early October, is that most of the campaign display areas are reserved for Halloween products.

Pushing seasonal products out for as long as possible might make sense for retailers to the extent that seasonal sales make a huge impact on margins. So, it’s both understandable and smart to try to get maximum benefit from seasonal sales periods.

But while it’s one thing to try to extend seasons for as long as possible, it’s another thing to manage your seasonal merchandise planning correctly. There’s no reason to allocate all the available promotional space for Christmas products, for instance, as early as October when they won’t sell as well as they do in November or December. Accurately forecasting the right quantities to allocate is all the more critical if you don’t want to compromise sales of other products. That leads us to the next point.

There are two major outcomes, that almost every retailer will be all too familiar with, when it comes to stocking up for a season:

• Having too much stock will result in products being left over after the season, resulting in waste or capital tied in dead or slow-moving stock, while …

• Having too little stock will result in products running out before the end of the season, which in turn results in lost sales

You might have figured this out already, and you may well have an excellent forecasting process, good allocation management, and so forth. But although you might have solved the initial problem with the right amount of stock, it won’t address the root of the problem if you haven’t optimized the management of your space replenishment accordingly. Usually retailers that haven’t prioritized this and don’t have a clear process for seasonal merchandise planning, will end up in one of the following situations:

a) There is stock being left in the back room and shelves are quickly becoming empty

b) An entire army of store merchandisers is needed to fill the shelves constantly and that is, of course, a nightmare for store operations

So, in the end the retailer will either still end up losing sales because of bad space management or will tie up all its resources into battling the empty shelves resulting in jeopardizing the key element for any business: customer service. Do you really want to find yourself facing that sort of choice? Of course not.

By reading our latest post you'll see that allocating your retail space doesn’t have to be a painful experience: Seasonal Merchandise Planning - Optimize Your Retail Space Replenishment