Promoting impulse buying by allocating retail shelf space to grouped product categories

Flamand, Tülay; Ghoniem, Ahmed; Maddah, Bacel

doi:10.1057/jors.2015.120

Cited by 52 publications

(26 citation statements)

References 25 publications

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“…Researchers have recently started considering such rules like merchandising rules and impulse‐purchase effects in shelf space allocation models (Flamand et al. ; Bianchi‐Aguiar et al. ).…”

Section: Discussionmentioning

confidence: 99%

Using the Pack‐and‐a‐Half Rule to Eliminate Backroom Inventories in Retail Operations

Eroglu

Williams

Waller

2018

J of Business Logistics

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I n the retail industry, backroom inventories are typically associated with higher labor costs and greater operational complexity. Thus, retailers look for ways to eliminate backroom inventories. A heuristic used for this purpose is the pack-and-a-half rule which suggests that the shelf space allocated for a product should be at least 50% larger than the case pack quantity in which the product is delivered. Despite its popularity among retailers, the pack-and-a-half rule has been ignored in the academic literature. We introduce the pack-and-a-half rule, assess its impact on a retailer's profits, identify cost, demand, and product characteristics driving this impact, and propose a modification. Based on an analysis of data obtained from a retailer on 1,986 SKUs in 20 categories, we find that the pack-and-a-half rule decreases a retailer's profits, on average, by 10% when applied uniformly across all SKUs. Further, this decrease is significantly affected by product depth, product width, demand elasticity, case pack quantity, and inventory carrying cost. Finally, we develop a set of modifications based on these variables where the pack-anda-half rule is applied selectively and in a stepwise fashion. These modifications limit the decrease in a retailer's profits to a range between 6% and 7%.

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Section: Discussionmentioning

confidence: 99%

Using the Pack‐and‐a‐Half Rule to Eliminate Backroom Inventories in Retail Operations

Eroglu

Williams

Waller

2018

J of Business Logistics

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“…Big companies have more resources to improve the reach and quality of their marketing. Brand visibility and familiarity can be enhanced via advertising, the shopping environment, product packaging, product placement (including shelf-visibility, which has been linked to increasing impulsive shopping - Flamand et al 2016), and on-the-spot promotion. All of these tactics make the brand more salient in consumers' minds (so-called "brand awareness" (Aaker 1996), increasing brand loyalty and influencing consumer decision-making during the shopping experience (Huang and Sarigöllü 2012).…”

Section: Inequalitymentioning

confidence: 99%

Fit for purpose? Clarifying the critical role of profit for sustainability

Hinton

2020

Journal of Political Ecology

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This conceptual article contributes to the post-growth strand of political ecology literature, which seeks to find sustainable ways of organizing the economy that do not require economic growth. It explores the idea that transitioning to post-growth societies requires a transition in the relationship-to-profit of business. I first conceptualize relationship-to-profit as the intersection of purpose, investment, and ownership of firms. Specifically, for-profit business structures entail a financial gain purpose, private ownership, and unlimited returns on investment; whereas not-for-profit business structures have a social benefit purpose, collective ownership, and limited returns on investment. I then outline ideal types of for-profit and not-for-profit economies, based on the differences between these two kinds of relationship-to-profit. The first ideal type shows how the for-profit business structure drives consumerism, economic growth, and ecological harm, as well as inequality and political capture, preventing post-growth transitions. These dynamics might be slowed down by businesses that seek to balance private financial gain with social benefit (known as dual-purpose businesses). The second ideal type describes the dynamics that might be expected in an economy consisting of not-for-profit businesses, which have a legal mandate to pursue only social benefit. This analysis explains how transitioning from for-profit to not-for-profit forms of business might change some of the most problematic dynamics of the economy, allowing for post-growth transformations. A brief discussion of the possible shortcomings of a not-for-profit economy is also offered.Keywords: Not-for-profit business, nonprofit enterprise, for-profit business, relationship-to-profit, post-growth, degrowth, economic growth, sustainability, sustainable econom

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“…Despite the proliferation of numerous software applications in shelf space management, which make use of historical data, new algorithms-as the ones introduced in this paper-are needed to deal with multi-period and dynamic versions of the product selection problem. Most of the literature about the shelf space allocation problem refers to supermarket products [41,42]. Other areas, such as fashion stores, have not received much attention.…”

Section: The Shelf Space Allocation Problemmentioning

confidence: 99%

“…This fact can be explained by the continuous growth in the size of realistic instances. • • Bianchi-Aguiar et al [42] • • Flamand et al [41] • • Kaminskas et al [16] • • Balakrishnan et al [33] • •…”

Section: The Shelf Space Allocation Problemmentioning

confidence: 99%

Using Biased-Randomized Algorithms for the Multi-Period Product Display Problem with Dynamic Attractiveness

et al. 2020

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From brick-and-mortar stores to omnichannel retail, the efficient selection of products to be displayed on store tables, advertising brochures, or online front pages has become a critical issue. One possible goal is to maximize the overall ‘attractiveness’ level of the displayed items, i.e., to enhance the shopping experience of our potential customers as a way to increase sales and revenue. With the goal of maximizing the total attractiveness value for the visiting customers over a multi-period time horizon, this paper studies how to configure an assortment of products to be included in limited display spaces, either physical or online. In order to define a realistic scenario, several constraints are considered for each period and display table: (i) the inclusion of both expensive and non-expensive products on the display tables; (ii) the diversification of product collections; and (iii) the achievement of a minimum profit margin. Moreover, the attractiveness level of each product is assumed to be dynamic, i.e., it is reduced if the product has been displayed in a previous period (loss of novelty) and vice versa. This generates dependencies across periods. Likewise, correlations across items are also considered to account for complementary or substitute products. In the case of brick-and-mortar stores, for instance, solving this rich multi-period product display problem enables them to provide an exciting experience to their customers. As a consequence, an increase in sales revenue should be expected. In order to deal with the underlying optimization problem, which contains a quadratic objective function in its simplest version and a non-smooth one in its complete version, two biased-randomized metaheuristic algorithms are proposed. A set of new instances has been generated to test our approach and compare its performance with that of non-linear solvers.

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Promoting impulse buying by allocating retail shelf space to grouped product categories

Cited by 52 publications

References 25 publications

Using the Pack‐and‐a‐Half Rule to Eliminate Backroom Inventories in Retail Operations

Using the Pack‐and‐a‐Half Rule to Eliminate Backroom Inventories in Retail Operations

Fit for purpose? Clarifying the critical role of profit for sustainability

Using Biased-Randomized Algorithms for the Multi-Period Product Display Problem with Dynamic Attractiveness

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