Efficiency savings usually drop straight through to the bottom line - for this retailer that meant a 10% lift in profits.
In the retail industry there is a continual struggle to make best use of available space. For this project, a small retail firm needed to understand how to re-balance its product lines to maximise sales from its bricks-and-mortar shops. Although margins were generous, volumes sometimes did not fully cover operating costs, even when shelves were full.
The project began by evaluating copious quantities of sales data and comparing these to retail space utilisation and product density. This drew unexpected results – the most cost-effective lines were not necessarily the best sellers. On the contrary, some categories perceived as “hard to sell” were in fact generating good income per unit of space, while the “easy sellers” were in some cases taking up more space than their total contribution justified.