Everything you need to know about Share of Shelf

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In the world of offline retail, share of shelf is what will make or break a CPG’s profits. You may think you know the concept, but understanding the true importance of this KPI is another story.
Share of Shelf in Retail

What is Share of Shelf?

You want consumers to be able to find your products the first time, every time, without any obstacles getting in the way. When your share of shelf is optimised, this is what you get.

In its simplest form, share of shelf is the amount of presence that your brand has within your in-store category. This can be broken down into the sheer volume of space that your product takes up, as well as the visibility of your brand and its on-shelf availability.

Retail displays have a limited amount of space, which means you’ve only got so much to work your magic on. Sitting at the optimum shelf level with the bulk of the display – both visually and physically – is what will sway the consumer to pick you. The quality of your shelf space will always be more important than the quantity, and making sure you’re in the diamond part of the display is a top priority.

This also correlates with market share, as it’s often assumed that the greater your share of shelf, the greater your market share – and the greater your number of sales.

Reality vs. expectation

There’s no doubt that your team puts a lot of time, money and effort into figuring out your ideal share of shelf. You trim down your category, make a planogram and possibly pay a large amount to the retailer to make sure they get it right.

But the share of shelf you want and the reality of what you get are often two very different things.

Whether it be the power of their workforce, their tight replenishment schedule or the size of their store, there are a number of internal factors from retailers that can interfere with your share of shelf. You could try and account for different scenarios, but the time this takes would be money down the drain. Offline retail has a million moving parts, so it’s impossible for anyone to know the issues you’ll face until your strategy is being executed. 

This is why tracking and analysing your share of shelf is so important. Monitoring your in-store KPIs not only gives you an advantage against competitors, but also allows you to correct any issues with displays. This means that by checking your share of shelf, you have a direct line to improving your sales.

How can share of shelf be tracked?

Whether you’re using a field agency, members of the crowd or your own internal team, it’s important to make sure that you get the share of shelf you deserve.

The importance of this has long been acknowledged, but the way it’s tracked hasn’t always been the best. As data and analytics start to carry more and more weight in sales strategies, the need for precision in monitoring share of shelf has also grown.

As of now, there are four main options:

Eyeballing

By far the least accurate method, you’d be surprised at how many CPGs still rely on guesswork when tracking their share of shelf.

In this scenario, whoever’s doing the audit will go to a retailer, look at the shelf and record the data based on their perception alone. If they look at your section of the store, they might estimate that you cover 20%, this competitor covers 30%, that competitor covers 5% and so on.

This approach is quick, easy and requires no training – points that are attractive to companies with a tight budget. However, if you’re truly dedicated to growing your sales numbers, it pays to invest in precise data.

Counting the facings

This is a step up from the previous method, where the person monitoring your share of shelf now calculates it rather than guessing.

When they find your display, they’ll count the number of facings they can see and compare it to the number of facings your competitors have. If there are 10 products on a shelf, you may have six facings (60%), one competitor might have one facing (10%) and another may have three (30%). 

This is a much more accurate method of tracking share of shelf, as it gives you pure data to work with instead of personal opinion.

The downside here is that this approach can take time. It’s rare to find a scenario as simple as the one given above, and the calculations will require more work if done manually. It’s also likely that if you’re placed in a busy category, your rep won’t count all the facings and will throw some estimations in there as well. 

Measuring (literally)

This is similar to counting the facings, except this time your auditor pulls out a tape measure and calculates the percentages based on the space occupied.

This is technically more reflective of your true share of shelf, as it takes visual metrics – what the consumer actually sees – and converts it to numeric data that you can use.

However, as you might imagine, this method is incredibly time consuming and borders on inefficient. Plus, your shelf checkers might have their actions questioned and generally feel uncomfortable doing this, which is always worth taking into account, especially at a time when social distancing still holds.

Depending on your product, physically measuring share of shelf may also not be a viable option.

Are you sensing a trend?

These three methods have their varying benefits, but all fall down where it matters most: reliability. 

You aren’t in the store with the person who’s checking your metrics. No matter how much you trust them, there’s no way to verify their results. With each category audit taking 20-25 minutes, anything other than highly accurate results just isn’t worth the time or money.

On top of this, reps are often incentivised on the KPIs they track, so there’s a chance they’re embellishing their results. They could be painting a much better picture than what’s actually in-store and you would be none the wiser.

That said, if you want to track your share of shelf but are concerned about efficiency, human error or all of the above, there’s a very simple fix:

Enter the fourth and final method: image recognition.

Image recognition and share of shelf

Like bread and butter, wine and cheese, strawberries and cream – image recognition and share of shelf are a combination that just make sense.

Eliminating the problem of human error, this pair takes all the benefits of the other tracking methods and mixes them in one AI-powered profit machine. With no guesswork, no manual sums and no tape measure, this puts tracking your share of shelf into easy mode.

When your field agents are equipped with the right image recognition tool, their process begins as if they were just taking a manual picture of the shelf. The difference then comes when they hold up their phone, as the AI quickly sets parameters and guides them into taking the best photos. 

Once all of these are taken, the smart technology then pieces them together into one big picture and lets image recognition do its thing.

Image Recognition - Share of Shelf

The neural network will recognise your product, note where it is on the shelf, and calculate the physical shelf space and number of facings before you can even say, “Wow, this is amazing.”

The key benefit here is that all the insights provided through IR are actionable. Due to the high cost to time ratio of the other methods, they tend to result in pure shelf reporting and nothing more. On the other hand, the speed and accuracy of AI gives you room to make the changes needed for a compliant display at no extra cost.

So, what’s the downside?

Getting an image recognition tool can make CPGs feel like a kid in a candy shop. With its vast capabilities, it can be tempting to midmax the solution and try to track everything at once. Surely, this saves time, money, and allows you to exponentially grow your market share, right?

Well, just because IR can cover a large amount of KPIs, it doesn’t mean it should. 

The best thing about this method is the granularity of the data that it provides. By trying to collect insights for every KPI, your data will suffer and become diluted across the board, significantly lowering your ROI. Image recognition is not the tool for overambitious CPGs, but is perfect for focused ones.

What do you do with your share of shelf insights?

Out of the 70-80 metrics that you could have on your scorecard, it’s estimated that 80% of your market share is determined by only 10 KPIs. If you guessed that share of shelf is part of this select group, you’d be right.

Share of shelf analytics are relevant across the board and can improve the functions of every team. Allowing them to make informed decisions and base retail strategy on data rather than bias, this metric is vital to improving your present and future retail execution.

Figuratively and literally boost those numbers

It’s pretty difficult to grow your revenue numbers when consumers don’t have access to your products. If you’re not selling as much as you’d like, share of shelf analytics may have to answer as to why.

The data provided by tracking share of shelf can help you to see where you’re succeeding, as well as identify opportunities for new growth. If your share of shelf is poor but your sales numbers are still high, you know that that product is what consumers want. Alternatively, if both your share of shelf and your sales are poor, correcting any issues could boost your numbers and show that you need to push that product. On the flip side, if sales are still poor after fixes, you can reassess where your budget is being spent.

Get a leg up on your competitors

As new competitors pop up every day, it’s more important than ever to have a share of shelf that’s reflective of your market share. 

Trade marketers, category managers and your insights team can all streamline their strategies through use of this data. If you’re losing market share, who is it to? A new product, packaging or format winning the shelf could show you where you need to take action and reaffirm your dominance in a new way. 

There is a point where more shelf space provides diminishing returns, so it’s likely that seasoned competitors have reached their sweet spot. However, this gives you room to try new things and think outside the box, using share of shelf data to recognise opportunities that bigger brands may bypass in favour of comfort.

Time to save by saving time

Every in-store KPI should be checked at a frequency that’s unique to your product, and share of shelf is no exception. However, in general, there’s a common sense approach that CPGs can take to save them time and money.

Shelf space for more stable categories will be reassessed at most twice a year, so you have time to collect data and run your assessments. It’s also best to track share of shelf during holiday periods, as part of a wider check into promotional compliance. If you’re part of an emerging category, analysis needs to happen more regularly again so that you can hold the market share and see who else is coming in hot. 

The method of tracking you use will also have a huge impact on the actionability of your results. For example, an IR tool that focuses on share of shelf is much more efficient than a field rep tracking several KPIs manually.

Part of the bigger picture

The beauty of analysing share of shelf is that no matter how you look at it, you’ll always get more data than you bargained for.

When your main goal is to achieve perfect store execution, this KPI sits hand in hand with many of the other crucial ones, such as out of stock levels, promo compliance, top SKU presence etc.

If your monitoring method involves smart tools like image recognition and AI, there’s no escaping collecting all this data at once, even if you don’t mean to.

By including share of shelf in your retail strategy, your CPG is solidifying its commitment to long-term retail success.

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