Like any brand with a distribution network, you're probably looking to increase your visibility at the point of sale. But whether your product is visible to consumers is a matter of perception, and a company's strategy should always be based on objective data.
This is where shelf space share (SS) comes into its own. This key measurement indicator enables you to evaluate your representation on the basis of reliable criteria that can be tracked over time, and cross-referenced with other data, such as sales at the checkout.
In this section, we'll review the definitions and calculation methods of PDL, and then look at its purposes, limitations and best practices for deriving maximum benefit from it.
Before getting to the heart of the matter, let's remind ourselves of a few basics!
In the retail context, the term "shelf space" refers to the total length of shelves or racks available in a store for displaying products. This measurement is often expressed in linear meters, and is used to assess the sales area allocated to a specific product category. For example, a supermarket might devote 10 linear meters to the dairy products section.
Floor space refers to the length of product display furniture. If the furniture has several shelves, we can then calculate the developed linear meter (DLM), which corresponds to the sum of the linear meters of all the shelves.
Shelf space share indicates the proportion of the sales area occupied by a product or brand, usually expressed as a percentage. This is a key performance indicator, as it influences brand visibility and can have a direct impact on sales.
The total number of products displayed and visible on each shelf is called facing. Brands present in supermarkets and in the retail sector seek to maximize their exposure, and compete to obtain the maximum number of facings on the shelves. It's an essential component of merchandising.
English speakers also speak of Share of Shelf (SOS), which expresses the idea of competition to win the biggest possible share. In France, we also hear the expression "parts de rayon".
Like any KPI, shelf space share can be used to track performance at store, regional, sales representative or even distributor level.
Three calculation methods are generally used to determine your linear shares:
But more on automation and technology later. Let's start with the most common case: manual calculation!
To calculate your share of shelf space, simply divide the length occupied by your products by the total length of the sales area concerned.
Example: if your products occupy 2m on an 8m shelf, your share of shelf space is 25%.
The same reasoning applies to the developed linear meter. If you want to calculate the share of shelf space for a shelving unit with 4 shelves, divide the length occupied by your facings by the total length of the unit, all shelves added together.
Whether facings are calculated on the floor or on the ground depends on the installation method: facings can be arranged horizontally (on the same shelf) or vertically (on different levels). The combination of these two techniques is known as facing by pavé. When calculating your share of vertical (and pavé) shelf space, you'll need to take into account the amount of developed shelf space.
As physical sales surfaces are limited, your brand's performance is not based on an absolute number of facings, but rather on the share of surface area you manage to occupy. Furthermore, when compared with the sales of the products concerned, PDL provides valuable leads for analyzing and interpreting performance.
We therefore consider that shelf space should always be proportional to the product's market share (PDM) in its category or department.
That's why it's so important to establish an ideal share of shelf space. If this is poorly defined, or if it is not respected by your distributors, your LOS/LOS ratio suffers, and various risks may ensue.
Here are a few examples:
Measuring or counting is carried out during store visits, either by your own staff (sector managers in supermarkets) or by a service provider you appoint for this purpose.
However, as the operation can be time-consuming, it's important to define its frequency. In the same way that manufacturers are accustomed to scoring their points of sale by assigning them an importance rating, it's vital to know when to measure pdl to justify the time allocated.
In the case of a product launch, for example, shelf space must be monitored on a regular basis, as a launch is always dangerous and represents both a risk and an opportunity for the outlet or chain. For a well-established product, on the other hand, LOS may only need to be measured 2 or 3 times a year.
Frequency therefore depends on a number of criteria, such as :
Counting shelf space can therefore be costly in terms of time and resources. To improve team productivity and eliminate low value-added tasks, it is now possible to use image recognition on store shelves.
Based on a planogram photo, a software program automatically identifies the references and calculates the number of facings and linear meters per brand. For the user company, the benefit also lies in reconciling the racking observed with the sellout results.
In a word, automation is gaining ground in retail performance analysis, and in the near future salespeople will be able to spend more time negotiating and less time in the aisles taking price readings. This is why the Americans no longer hesitate to refer to real-time facings analysis as shelf intelligence!
💡 Automated or not, taking photos also has the virtue of eliminating any doubt about the methods of merchandisers, who sometimes have an interest in "embellishing" the situation.
A word of caution, however: PDL as a percentage is not enough to assess your brand's or product's power of attraction in its aisle, for a number of reasons.
The first is that not all shelves are created equal! As we explain in our guide to merchandising in supermarkets, shoppers first look at products... at eye level! The position of your product at the beginning or end of the aisle (in relation to the main flow of traffic) is also an important variable, as is the location of the aisle itself, in a hot or cold zone. In other words, you can have the same share of shelf space between two departments, but not the same visibility, and therefore not necessarily the same sales.
In addition, the number and variety of competing or substitute products can vary the "strength" of your facings. Remember, too, that point-of-sale advertising, pricing and other external factors can boost or undermine your products' sales volume, irrespective of your share of shelf space.
Finally, each product family in a supermarket is expected to occupy a space proportional to the market share it represents in its department. For example, if olive oil represents 15% of grocery sales in a given geographical area, then the outlet should allocate 15% of the grocery aisle to olive oil.
For your brand, knowing these statistics allows you to take a critical look at store layout: let's say that the space allocated to olive oil is not proportional to its weight in the grocery department's sales, your share of shelf space is not the only issue at stake, and your sales representative must also try to convince the department manager to increase the total number of facings for olive oil in his grocery department!
Calculating your share of shelf space is all very well... but it's not the whole story!
