How to measure the effect of product placement on sales

Moving a product can change how well it sells, but a hunch is not a measurement. To know whether a new spot worked, connect each sale to where the product sat, compare sales with the space the product used, and test one change at a time against something you left alone. For deciding where products go in the first place, see the shelf-by-shelf placement guide.

What product placement analysis needs

You need three records, kept for the same dates:

• Where each product sat. A planogram, a drawing of what goes on each shelf (see a short guide to planograms), plus a floor plan of the store.
• What sold. Units and sales value by product and by day, from your till or point-of-sale export.
• What changed. The date of every move, price change, promotion and delivery.

Does shelf position affect sales?

It can. Shoppers see and reach some shelves more easily than others, and a product can sell differently at the edge of a category than in its middle. How much varies by product and store, so the answer comes from your own figures.

A till records the product, not the shelf. You attach the position yourself, from the plan that was in place on the date of each sale. When one product sits in two places, the till data alone cannot split its sales between them.

Sales per linear foot and sales per square foot

These measure sales against space, so long and short runs compare fairly.

• Per linear foot: sales from a section divided by the shelf length it uses. Linear feet are the shelf width times the number of shelves, so a 4 ft section with five shelves has 20.
• Per square foot: sales from an area divided by its floor area. Use it to compare fixtures, zones and departments.

Fictional worked example: the snacks on that 4 ft section sold $1,200 in four weeks, which is $60 per linear foot for the period. A 6 by 8 ft island of seasonal stock sold $2,400 in the same weeks, or $50 per square foot of floor. Always state the period.

Space to sales ratio

Divide a category's share of shelf space by its share of sales.

A ratio well above 1 means the category holds more space than its sales earn. Well below 1 means it may be short of space and at risk of empty shelves. Some retailers flip the division; pick one and keep it. Check margin and how often staff refill the shelf, then decide whether to give it more or fewer facings.

Find hot and cold zones in the store

Split the floor plan into a few zones, such as entrance, main aisle, back wall and checkout, then total the sales of the products in each. Sales by store zone divided by each zone's floor area shows which areas outsell their size. Those are your store hot spots; areas that trail their share are cold.

A cold zone is a prompt to look, not a verdict. Walking the floor often explains it: a blocked aisle or a dim corner.

How to test product placement

1. Change one thing: one product, one move.
2. Record the date and the old and new positions.
3. Pick a comparison: a similar product you will not move, or the same product in another store.
4. Use equal periods before and after, four weeks each if the product sells every week.
5. Compare the change in the test with the change in the comparison.

Fictional worked example: you move a coffee brand to the shelf at eye height on 1 March. It averaged 40 units a week in the four weeks before and 52 in the four weeks after, a 30% rise. A similar brand you left alone went from 30 to 33 over the same weeks, a 10% rise. Roughly 20 points of the gain may come from the move.

Even with a comparison, a test like this shows that sales moved with the change, not that the change caused it. The NIST handbook's page on experimental design describes changing a factor on purpose to observe its effect while accounting for factors you cannot control.

Avoid false conclusions

• Season. Seasonal adjustment at the Census Bureau removes seasonal, trading-day and moving-holiday effects from a series. A small shop can keep holidays out of both periods and check the same weeks last year.
• Promotions and price changes. A discount during the test swamps the move. Run tests without one.
• Stockouts. An empty shelf sells nothing wherever it is. Check stock across both periods, and see keeping shelves stocked.
• Small numbers. A product that sells three a week can swing by chance. Test faster sellers or run longer.
• Volume against speed. Read sell-through beside units, since more stock on show can raise units without raising the rate.

Track planogram performance in Headoffis

Headoffis keeps the three records together: approved planograms, the Store map, and sales entered by hand or loaded with Import sales CSV. Each approved planogram version keeps its date, so every sale can be matched to the layout on the shelf that day.

• Heatmap overlay. On a planogram or the Store map, tint each placement or fixture by Units sold, Stock on hand or Sell-through over 7, 30 or 90 days.
• Position and space figures. Analytics shows sales for each planogram position and per linear foot for each fixture, with each category's share of space and share of sales side by side. A product placed in more than one spot is flagged, because its sales cannot be split by position.
• Zones. Draw zones such as entrance or back wall on the Store map. Analytics totals each zone's sales and divides them by its floor area.
• Period comparison and export. Compare the last 7, 30 or 90 days with the preceding period for one location or all, then use Export daily CSV for your own spreadsheet.

To run the coffee test above:

1. Move the brand on the planogram and approve the new version.
2. In Analytics, choose that version's approval date and four weeks either side.
3. Pick the brand you left alone as the comparison product.
4. Read the change for each, and check the days marked as having no stock counted before you trust the gap.

The heatmap help explains how each overlay counts.

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