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The Impact of Product Placement on Retail Sales
Taris Adani

The Impact of Product Placement on Retail Sales

Taris Adani
The Impact of Product Placement on Retail Sales

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Product placement is an important factor in the retail business. The level of sales can be influenced by product placement. Therefore, understanding the importance of product placement should not be taken lightly. 

Every business aims for high-level sales. Even more so retail businesses that often rely on income from sales volume. Various efforts are undertaken to boost sales. Product placement can be one of the many strategies of increasing sales. Placing products effectively will result in a strong potential of sales increase.

Understanding Consumer Habits

In retail business, product placement refers to the placing of products in a store. Products are commonly lined up in a store’s display shelves. This placing of products has a substantial impact on sales level. If placed correctly, a product increases its chances of consumer purchase.

This begins by understanding consumer habits when shopping in a store. Studies have shown that only a third of store visitors have plans of purchase before entering the store. As such, there are more visitors who walk into a store without previously determining a specific product to shop for.

This habit is ample opportunity for retailers to increase sales of certain products. It can be achieved by placing products at a location that attracts store visitors’ attention. In other words, retailers target the desire of impulsive buying from two-thirds of store visitors; the ones who have not previously planned their purchase. These visitors will decide to purchase on location, and this is an opportunity to leverage.

Placing Products at Eye Level

Armed with the understanding of consumer habits, the “art” of placing products begins to be taken into serious consideration. Many studies have been done to learn about ways to increase in-store sales. One of the findings states that product placement has a substantial impact. It is further found that products placed at eye level tend to garner higher sales.

Taxretail states that the above finding is based on the store visitor’s habit to browse shelves placed at their eye level. Moreover, as most people are right-handed, their sights are cast from left to right. Then in a duration of one to eight seconds, the visitor will have decided which product to buy.

These habits need to be understood fully by retailers. They can utilize the knowledge to arrange their products as best as possible, and with the most suitable product placement strategy.

Options for Product Placement Strategy

Eye level product placement has been known to be the primadonna of retail. However, of course not all products can be placed at that prime spot. As such, other product placement strategies need to be understood in order to boost sales. There are various options to choose from, and they can be found as below:

  • Block Placement

Placing products of the same or related category in one area.

  • Vertical Placement

Placing products on shelves with two levels or more.

  • Commercial Placement

Prioritizing the placing products with higher selling value or with greater chances of purchase.

  • Margin Product Placement

Placing products based on the profit they can bring. The bigger profit one product brings in, the better its placing in the store will be.

  • Market Share Placement 

Placing products based on the revenue they can bring. If a product brings high revenue, its placing will be prioritized. 

Utilizing Data

Various product placement strategies can be implemented in a store. Which is the best strategy may not be definite, as it depends on particular conditions of each store; from the category of products being sold, the store’s ambience, to the character of its visitors. 

A coffee shop in England serves as proof. Taxretail expands on how that cafe conducts a study on its product sales based on their different display shelves; they label their shelves with numbers 1 to 5. After some period of observation, it is found that one of the three shelves placed at eye level has higher chances of higher sales by 23%.

This fact shows that understanding data of consumer habits is crucial. As such, retailers should utilize data in formulating the best product placement strategy for their business.

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