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I've heard from a friend (in Australia) if you don't frequently buy placement you get bumped, and buying placement can be a losing proposition. They raise the p
by hnick 5y ago
I've heard from a friend (in Australia) if you don't frequently buy placement you get bumped, and buying placement can be a losing proposition. They raise the price to squeeze all margin so it's just on the edge of making it affordable. You have to say yes to losing money during the promotion ("you'll make it up with brand awareness!") to claw it back by staying on the shelves in between. Otherwise another brand, or sometimes a house brand, takes your place.
- spicybright 5y agoDoes shelf height play that big of a roll in sales?
- dannyw 5y agoOh absolutely, especially because Australian grocery stores tend to be denser and stock less products. Especially the new "Metro" style of stores. In these formats, you pay for placement or they don't stock you.
- hnick 5y agoIt's not just height, it's the positioning at the end of aisles too, and the large 'sales' stickers to draw attention. IIRC they would request an all-or-nothing for your product line, so if it was something like dog food or sauces where you might have multiple variations you had to pay the fee per SKU to be featured, you didn't get to pick and choose. They decided. Similarly at least one large pharmacy chain supposedly made a significant chunk of profit from charging for catalogue placement. I don't know about shelf height specifically though, I do know this is an important factor in sales but not sure if there is ongoing 'rent' to pay. There would be a lot of indirect negotiation around wholesale rates that would influence these decisions too.
- bombcar 5y agoShelf height really does matter, check the items that are at “eye” height the next time you’re in the store. And sometimes it goes so far as to distinguish between the average male eye height and he average female when arranging products.