With shelf space increasingly limited, manufacturers and retailers are steadily challenged with determining how to maximize items—and ROI—on the shelves at brick-and-mortar stores. That may soon be a worry of the past, thanks to a new solution designed to take the guesswork out of managing shelf space. Nielsen’s Assortment and Space Optimization (ASO) solution, released this week at the annual Category Management Association (CMA) conference, is the industry’s first cloud-based application designed to help retailers and manufacturers identify what’s moving off the shelves and what’s not.
Assortment questions? Stocking debates? Selection strife? Let ASO come in and save the day (or, the shelf). Assortment planners trying to navigate these challenges are faced with making decisions based on physical space constraints on the shelf, format and size of a variety of products, inventory models and stackability. ASO combines manufacturer and retailer sales data to uncover demand—how quickly products are moving off the shelves—and uses the output of inventory models as a reference point to help retailers manage the connection between physical shelf space and product supply chain. Linking these various data allows manufacturers and retailers to understand the best way to fill shelf space in order to maximize product performance and supply chain productivity.
Category and assortment decision-makers who attended CMA heard first-hand from our assortment and global product experts about how ASO will address their most pressing inventory management challenges through simplicity. In short, ASO will reduce the time between “analytics” and “decision,” and from “decision” to “execution” by allowing two processes to function simultaneously: optimizing the product distribution process and placing them into planogram space management software. Previously, manufacturers and retailers completed these as isolated steps. Now, this simplified process gives manufacturers and retailers the added capabilities of assortment planning, merchandising strategy, planogram management, automation and workflow services—all in one single, easy-to-navigate platform.
Keys to Creating a Smart Shelf
During the recent conference, Peter Conti, vice president of assortment analytics, emphasized what it takes to create a smart shelf: the dynamic connection between demand and supply, and assortment and space. The bottom line: Help retailers and manufacturers understand how to generate and deploy store-level planograms that incorporate an optimal merchandising layout to create the smart shelf of the future, today.
Session attendees took away a unique approach—leveraging solutions like ASO—to identify the right products to place on the shelf, how to determine the optimal number of facings that accurately project and drive real growth and how to maximize distribution of the right products.
Overcoming Assortment and Space Challenges
Building on Conti’s presentation, Stuart Taylor, senior vice president of global product leadership, walked category management industry players through the landscape of the ongoing challenges facing the CPG industry—ranging from stock keeping unit (SKU) proliferation, declining SKU productivity and persistent out-of-stock occurrences. Leveraging the roll-out of ASO, Taylor educated attendees on the opportunity presented by solving assortment and space together and how to solve challenges through execution-ready analytics—combining data, analytics and software—an unmet need that Nielsen is solving.
ASO is now available in eight markets, and it will roll out to additional select markets in the weeks ahead.