Zoning the shop by arranging equipment
Zoning is the division of the floor area into zones linked to groups of equipment. For example, for a food retailer, these would be:
- "Fruit and Vegetables (FV)" zone
- Dairy products" zone
- Zone "Alcohol"
- etc.
Each zone may contain many pieces of retail equipment and a large number of planograms placed in this equipment.
Zoning is used to obtain summary analytics on sales, balances, turnover and other indicators by groups of planograms and groups of sales equipment. If desired, it is possible to obtain calculated indicators tied to the area of the trade zone, such as:
- Profit per square metre of premises (with and without taking into account FTP and other cost items)
- Profit per linear metre of shelf
- Profit per square metre of shelf
- Revenue per square metre
- Warehouse stock in units and cost per metre of space or shelf
- and many others.
If zoning is carried out for several shops, it is possible to get analytics on zones already in the context of the whole chain or in the context of shop formats, as well as to carry out a comparative analysis of the efficiency of the use of retail space between different shops.
Ultimately, the goal is to work out the most efficient arrangement of equipment and goods placed on this equipment. The analysis will help to understand which groups of goods are placed incorrectly, which trade zones are underfilled with goods or overfilled, to evaluate the effectiveness of the selected product matrix and much more.
Below is an end-to-end example of zoning a retail space and an example of analysing the efficiency of placement using the "Zoning" module of the GreenShelf service.
- "Fruit and Vegetables (FV)" zone
- Dairy products" zone
- Zone "Alcohol"
- etc.
Each zone may contain many pieces of retail equipment and a large number of planograms placed in this equipment.
Zoning is used to obtain summary analytics on sales, balances, turnover and other indicators by groups of planograms and groups of sales equipment. If desired, it is possible to obtain calculated indicators tied to the area of the trade zone, such as:
- Profit per square metre of premises (with and without taking into account FTP and other cost items)
- Profit per linear metre of shelf
- Profit per square metre of shelf
- Revenue per square metre
- Warehouse stock in units and cost per metre of space or shelf
- and many others.
If zoning is carried out for several shops, it is possible to get analytics on zones already in the context of the whole chain or in the context of shop formats, as well as to carry out a comparative analysis of the efficiency of the use of retail space between different shops.
Ultimately, the goal is to work out the most efficient arrangement of equipment and goods placed on this equipment. The analysis will help to understand which groups of goods are placed incorrectly, which trade zones are underfilled with goods or overfilled, to evaluate the effectiveness of the selected product matrix and much more.
Below is an end-to-end example of zoning a retail space and an example of analysing the efficiency of placement using the "Zoning" module of the GreenShelf service.
January's consumer lull did not affect renovation and wedding products
George, Development Director of GreenShelf, the developer of the GreenShelf IT-system for retail space management, is convinced of this.
The cyclical nature of seasonal and festive turnover invariably shows a lull after the New Year frenzy. January's hard dip in sales ends around the 25th-27th, along with the receipt of the first salary of the new year. But when talking about the post-New Year lull, a segment such as DIY is often overlooked. As strange as it may sound, the January holidays and the week following are a time for flat renovations. According to GreenShelf, these days, year after year, there is a rush of demand for goods in DIY hypermarkets. It should be noted that the onset of demand is usually recorded no later than 2 January.
"It is believed that on January 2, our fellow citizens finish their salads and finish watching New Year programmes. But if you look on this day, for example, in construction hypermarkets, you will find crowds of people buying wallpaper, putty, paint and other goods for repairs, - said George - Knowing the coming rush demand, retailers in the DIY segment in advance prepare a programme of discounts and promotions, with half a dozen of which remain relevant until the middle, or even the end of January ".
The coming year of 2024 is no exception. A number of public sources record a 12% increase in the turnover of repair goods compared to the 2023 holidays. Along with the increase in demand for repair goods, some retailers claim to have also recorded an increase in demand for home appliances, beauty and grooming category goods and, pet products.
"It is obvious that the revival of demand in these categories is not accidental, it is repeated year after year, and it involves all new segments, - said George, - accordingly, just pre-planned promotions as an effective tool will soon become insufficient to maximise profits on the surge in customer demand. It is necessary to use shelf space more effectively, to form the concept of product display in advance in seasonal peaks. And in this case we are not talking about a creative, but a pragmatic approach. It is far from enough to beautifully lay out the goods in a slide or any other way to attract the customer. The pragmatic approach is to project the current assortment matrix to the most effective extent possible on the basis of the accumulated data on sales of the last years in a given period of time, taking into account the best-selling positions. Without the use of a special algorithm, this is virtually impossible".
GreenShelf specialists note another specific feature of January demand. The second peculiarity of January is how the segment of goods for wedding ceremonies behaves. "The so-called "high season", at wedding salons begins on the first of January, - notes George, - This is explained very simply: many people make a proposal on New Year's Eve, 31 January. Therefore, 1 January wedding salons, as a rule, open".
Based on the experience of shelf planogramming for different retail segments, the creators of GreenShelf believe that the average period of buying a wedding dress and other attributes is a long cycle, and rarely falls within one month. The beginning of January is devoted to inspection and selection of models, budget estimation, and later - to ordering the product and its fitting. Sales peak in the spring and summer months.
The cyclical nature of seasonal and festive turnover invariably shows a lull after the New Year frenzy. January's hard dip in sales ends around the 25th-27th, along with the receipt of the first salary of the new year. But when talking about the post-New Year lull, a segment such as DIY is often overlooked. As strange as it may sound, the January holidays and the week following are a time for flat renovations. According to GreenShelf, these days, year after year, there is a rush of demand for goods in DIY hypermarkets. It should be noted that the onset of demand is usually recorded no later than 2 January.
"It is believed that on January 2, our fellow citizens finish their salads and finish watching New Year programmes. But if you look on this day, for example, in construction hypermarkets, you will find crowds of people buying wallpaper, putty, paint and other goods for repairs, - said George - Knowing the coming rush demand, retailers in the DIY segment in advance prepare a programme of discounts and promotions, with half a dozen of which remain relevant until the middle, or even the end of January ".
The coming year of 2024 is no exception. A number of public sources record a 12% increase in the turnover of repair goods compared to the 2023 holidays. Along with the increase in demand for repair goods, some retailers claim to have also recorded an increase in demand for home appliances, beauty and grooming category goods and, pet products.
"It is obvious that the revival of demand in these categories is not accidental, it is repeated year after year, and it involves all new segments, - said George, - accordingly, just pre-planned promotions as an effective tool will soon become insufficient to maximise profits on the surge in customer demand. It is necessary to use shelf space more effectively, to form the concept of product display in advance in seasonal peaks. And in this case we are not talking about a creative, but a pragmatic approach. It is far from enough to beautifully lay out the goods in a slide or any other way to attract the customer. The pragmatic approach is to project the current assortment matrix to the most effective extent possible on the basis of the accumulated data on sales of the last years in a given period of time, taking into account the best-selling positions. Without the use of a special algorithm, this is virtually impossible".
GreenShelf specialists note another specific feature of January demand. The second peculiarity of January is how the segment of goods for wedding ceremonies behaves. "The so-called "high season", at wedding salons begins on the first of January, - notes George, - This is explained very simply: many people make a proposal on New Year's Eve, 31 January. Therefore, 1 January wedding salons, as a rule, open".
Based on the experience of shelf planogramming for different retail segments, the creators of GreenShelf believe that the average period of buying a wedding dress and other attributes is a long cycle, and rarely falls within one month. The beginning of January is devoted to inspection and selection of models, budget estimation, and later - to ordering the product and its fitting. Sales peak in the spring and summer months.
New Year's Eve make-up sets will still be relevant, but will be reduced in volume
This was reported by the experts of GreenShelf company (developer of IT-system for trade space management), focusing on their own analytical data on pre-order assortment in retail chains of non-food products. We are talking, first of all, about multi-brand retailers for the middle class customer, the company added. For example, 90% of New Year's cosmetic sets for women and men consist of two items instead of three;
"In 2022-2023, the pre-order of New Year's gifts included sets consisting of three or even four items," says George, Development Director of GreenShelf-developer of the IT-system of trade space management, "in the current pre-New Year's period, suppliers and sellers everywhere have reduced their volume. Now most New Year's sets consist of two items, for example, mascara and eyeliner or make-up remover for women and deodorant and razor for men. The exception is the economy class sets within 5 eu, where there can be three items each, for example, three types of inexpensive hand cream 30 millilitres. An analysis of customer preferences shows that gender gift sets remain the most relevant pre-ordered item in the beauty retail sector, although they are overtaken by New Year's accessories and small things for the home".
At the same time, the experts note that the priorities of supply are divided roughly in half: 51% are sets of products for basic everyday face and body care and 49% - for decorative cosmetics, in which eye make-up products (mascara and eyeliner of inexpensive price segments) lead with a huge lead (70%).
Another peculiarity of the current pre-New Year's shopping, GreenShelf experts say, is that the total volume of the pre-New Year's assortment in shops has decreased by about 30%. At the same time, the total volume of deliveries to retail chains remains comparable to last year's level. The decrease was due to the redistribution of the assortment to the online segment. Experts believe that when ordering goods and redistributing them across sales channels, retailers were guided not so much by coronavirus restrictions as by data from the pre-New Year period at the end of last year. According to open source data for January 2023, the average cheque for New Year online purchases in the run-up to 2024 was 20-25% higher than offline, depending on the categories of goods, and about 7-8% higher than in December 2023.
Under no circumstances will retailers leave New Year's shelves empty, although the loss of 30 per cent of the physical assortment is a rather impressive figure," says George, "but retailers will have to adjust their New Year's merchandising one way or another, taking into account the available shelf space, its configuration and unit sizes. Smaller gift sets take up less shelf space. Where there were three conditional units, now there can fit four, or even five, and another ten souvenirs. It should also be noted that the planogramming of the New Year assortment at some operators is still formed in Photoshop and is not subject to prompt correction if the goods are quickly dismantled. Some software algorithms, in particular, and ours, can get out of the mode of auto-filling of shelves, work in the system semi-automatically and quickly form a recommendation on filling, it will only be necessary to run to the backroom and restore the availability of goods. But none of the market software algorithms works as a big alarm button. So there are risks for the current pre-New Year offline trading, although not so significant for the time being".
"In 2022-2023, the pre-order of New Year's gifts included sets consisting of three or even four items," says George, Development Director of GreenShelf-developer of the IT-system of trade space management, "in the current pre-New Year's period, suppliers and sellers everywhere have reduced their volume. Now most New Year's sets consist of two items, for example, mascara and eyeliner or make-up remover for women and deodorant and razor for men. The exception is the economy class sets within 5 eu, where there can be three items each, for example, three types of inexpensive hand cream 30 millilitres. An analysis of customer preferences shows that gender gift sets remain the most relevant pre-ordered item in the beauty retail sector, although they are overtaken by New Year's accessories and small things for the home".
At the same time, the experts note that the priorities of supply are divided roughly in half: 51% are sets of products for basic everyday face and body care and 49% - for decorative cosmetics, in which eye make-up products (mascara and eyeliner of inexpensive price segments) lead with a huge lead (70%).
Another peculiarity of the current pre-New Year's shopping, GreenShelf experts say, is that the total volume of the pre-New Year's assortment in shops has decreased by about 30%. At the same time, the total volume of deliveries to retail chains remains comparable to last year's level. The decrease was due to the redistribution of the assortment to the online segment. Experts believe that when ordering goods and redistributing them across sales channels, retailers were guided not so much by coronavirus restrictions as by data from the pre-New Year period at the end of last year. According to open source data for January 2023, the average cheque for New Year online purchases in the run-up to 2024 was 20-25% higher than offline, depending on the categories of goods, and about 7-8% higher than in December 2023.
Under no circumstances will retailers leave New Year's shelves empty, although the loss of 30 per cent of the physical assortment is a rather impressive figure," says George, "but retailers will have to adjust their New Year's merchandising one way or another, taking into account the available shelf space, its configuration and unit sizes. Smaller gift sets take up less shelf space. Where there were three conditional units, now there can fit four, or even five, and another ten souvenirs. It should also be noted that the planogramming of the New Year assortment at some operators is still formed in Photoshop and is not subject to prompt correction if the goods are quickly dismantled. Some software algorithms, in particular, and ours, can get out of the mode of auto-filling of shelves, work in the system semi-automatically and quickly form a recommendation on filling, it will only be necessary to run to the backroom and restore the availability of goods. But none of the market software algorithms works as a big alarm button. So there are risks for the current pre-New Year offline trading, although not so significant for the time being".
In 2024, retail will maintain margins by increasing the share of STM products
Specialists from GreenShelf GreenShelf (a developer of IT-systems for managing retail space) expect that in 2024 the share of STM on shop shelves in some product segments will reach 70% and higher. We are talking not only about food retail, but also about everyday goods.
"On the one hand, there are product categories in which the STM concept does not work by definition. These are branded cosmetics and perfumes, as well as clothing in the high price segment. On the other hand, inexpensive care products, various cleaning or hygiene products, inexpensive everyday underwear are perfectly sold under their own trade mark," says George, Development Director of GreenShelf, the developer of GreenShelf IT-system for trade space management, "The customer does not care about the brand of washing powder or socks, as long as they meet consumer characteristics and are affordable. In today's conditions, increasing the share of STM against the backdrop of retail chains' gradual rejection of discounts, a trend we are now seeing in retail, is one of the most effective ways to preserve the margins of retail chains".
Retail market players are capturing this trend in different ways, according to GreenShelf. Thus, on average, the share of sales of everyday demand has decreased by about 40% in 2023; it experienced the strongest decline in the third quarter of last year, when sales of food products through promotions decreased by almost 50%. Such a breakdown of figures, according to GreenShelf experts, shows the declining effectiveness of investment in promotions and opens the way for a new trend - a strategy of consistently low prices and preserving margins by increasing the share of STM.
"Developed countries such as the US and Germany have long gone through the STM boom; just think of players such as Walmart in the US or Aldi, one of the leaders of the discounter segment in Germany. It would not be wrong to say that the share of STM goods in a number of retailers in various product categories can now reach 90%, for example, at Aldi."
In connection with the change in the trend, retail chains are waiting for a change in the principles of shelf planning, according to GreenShelf. According to the company's experts, the display of STM goods is always a priority for a retailer. An increase in the share of own-brand goods will inevitably lead to competition within one STM category on the shelf, and as a consequence, to the need for operational analyses of current sales and planning of display on its basis.
"In addition, it will be very important to take into account the product neighbourhood, - notes George, - For example, it is highly desirable for STM products to be adjacent to the products of the anchor brand, it is a factor of attracting customers. Without a system algorithm, which includes the features of the assortment matrix, and which then gives a clear understanding of the STM faceings and the number of shelves for them, it is almost impossible to realise this".
"Traditionally, once the spring holidays are over, there is a lull until the barbecue and gardening season begins. Formally, it starts on 1 May, but its start is highly dependent on weather conditions," says Georgi . It's obvious that spring will be early this year, so retailers should already be concerned about product planning for the start of the high season".
Within the spring-summer and early autumn seasons, GreenShelf experts identify several waves that shape the priority of merchandise planning in shops.
- Mid-April - the beginning of the high season of sales of gardening tools, seeds and seedlings.
- May is the beginning of the barbecue season.
- June and July are the peak of beach and water sports sales. In August, when the holiday season reaches its peak, the demand for beach products starts to decline smoothly, GreenShelf says. This is because shoppers purchase all beach novelties at the beginning of the season and have time to satisfy their shopping needs by the holiday period.
August is a period of decline in sales for all destinations. For the last few years retailers' attempts to localise on the shelves thematic assortment dedicated to the stages of the harvest (Nut Saviour, Honey Saviour, Apple Saviour) have been recorded on the market. The last week of August is traditionally characterised by an explosion of demand for school goods before the start of the new school year.
"According to all signs, the coming shopping seasons will not bring any surprises. Although objectively we are seeing a decline in customer traffic, judging by the published LFL-reports of key retail players," says George, GreenShelf expert, "The decline in purchasing power, which is also an objective fact, may prevent a large number of spontaneous purchases. Now the buyer is saving for a targeted or family purchase. Of course, seasonal and festive goods fit into this paradigm. But it should be remembered that whereas in the past a person who came to a shop to buy a lawnmower would not mind upgrading to a barbecue or buying a pergola for the garden if it came his way, now he is more likely to limit himself to a lawnmower. Retailers should remember this and take it into account when planning the display and when changing the planogram quickly if feedback from shops shows that a large spontaneous purchase is no longer working. So, the display should be planned so that the customer buys a few small but necessary items".
"On the one hand, there are product categories in which the STM concept does not work by definition. These are branded cosmetics and perfumes, as well as clothing in the high price segment. On the other hand, inexpensive care products, various cleaning or hygiene products, inexpensive everyday underwear are perfectly sold under their own trade mark," says George, Development Director of GreenShelf, the developer of GreenShelf IT-system for trade space management, "The customer does not care about the brand of washing powder or socks, as long as they meet consumer characteristics and are affordable. In today's conditions, increasing the share of STM against the backdrop of retail chains' gradual rejection of discounts, a trend we are now seeing in retail, is one of the most effective ways to preserve the margins of retail chains".
Retail market players are capturing this trend in different ways, according to GreenShelf. Thus, on average, the share of sales of everyday demand has decreased by about 40% in 2023; it experienced the strongest decline in the third quarter of last year, when sales of food products through promotions decreased by almost 50%. Such a breakdown of figures, according to GreenShelf experts, shows the declining effectiveness of investment in promotions and opens the way for a new trend - a strategy of consistently low prices and preserving margins by increasing the share of STM.
"Developed countries such as the US and Germany have long gone through the STM boom; just think of players such as Walmart in the US or Aldi, one of the leaders of the discounter segment in Germany. It would not be wrong to say that the share of STM goods in a number of retailers in various product categories can now reach 90%, for example, at Aldi."
In connection with the change in the trend, retail chains are waiting for a change in the principles of shelf planning, according to GreenShelf. According to the company's experts, the display of STM goods is always a priority for a retailer. An increase in the share of own-brand goods will inevitably lead to competition within one STM category on the shelf, and as a consequence, to the need for operational analyses of current sales and planning of display on its basis.
"In addition, it will be very important to take into account the product neighbourhood, - notes George, - For example, it is highly desirable for STM products to be adjacent to the products of the anchor brand, it is a factor of attracting customers. Without a system algorithm, which includes the features of the assortment matrix, and which then gives a clear understanding of the STM faceings and the number of shelves for them, it is almost impossible to realise this".
"Traditionally, once the spring holidays are over, there is a lull until the barbecue and gardening season begins. Formally, it starts on 1 May, but its start is highly dependent on weather conditions," says Georgi . It's obvious that spring will be early this year, so retailers should already be concerned about product planning for the start of the high season".
Within the spring-summer and early autumn seasons, GreenShelf experts identify several waves that shape the priority of merchandise planning in shops.
- Mid-April - the beginning of the high season of sales of gardening tools, seeds and seedlings.
- May is the beginning of the barbecue season.
- June and July are the peak of beach and water sports sales. In August, when the holiday season reaches its peak, the demand for beach products starts to decline smoothly, GreenShelf says. This is because shoppers purchase all beach novelties at the beginning of the season and have time to satisfy their shopping needs by the holiday period.
August is a period of decline in sales for all destinations. For the last few years retailers' attempts to localise on the shelves thematic assortment dedicated to the stages of the harvest (Nut Saviour, Honey Saviour, Apple Saviour) have been recorded on the market. The last week of August is traditionally characterised by an explosion of demand for school goods before the start of the new school year.
"According to all signs, the coming shopping seasons will not bring any surprises. Although objectively we are seeing a decline in customer traffic, judging by the published LFL-reports of key retail players," says George, GreenShelf expert, "The decline in purchasing power, which is also an objective fact, may prevent a large number of spontaneous purchases. Now the buyer is saving for a targeted or family purchase. Of course, seasonal and festive goods fit into this paradigm. But it should be remembered that whereas in the past a person who came to a shop to buy a lawnmower would not mind upgrading to a barbecue or buying a pergola for the garden if it came his way, now he is more likely to limit himself to a lawnmower. Retailers should remember this and take it into account when planning the display and when changing the planogram quickly if feedback from shops shows that a large spontaneous purchase is no longer working. So, the display should be planned so that the customer buys a few small but necessary items".
"Showcase shops" are replacing classic retail spaces
Against the backdrop of growing online sales (up to 60-70% in some shop categories), a significant transformation of retail space functions is expected in a number of retail segments over the next few years. The trend to replace classic shops with "store-windows" has been recorded in shopping and entertainment centres with GLA of 30,000 sq. m. or more. This was reported by the experts of GreenShelf company (developer of IT-system for shopping space management). This trend will continue to develop, and in the coming years some categories of shops will almost completely switch to the format of "showroom with a platform for ordering plus a point of delivery of purchases" while maintaining the minimum assortment intended for offline sales.
GreenShelf experts are confident that in the next two years the share of physical purchase will account for about 10-15% of the total volume for a number of tenant categories in shopping centres, malls and hypermarkets. At the same time, experts do not expect a decrease in customer traffic, as they believe that the familiar middle-price segment shops in malls and hypermarkets will retain their attractiveness, but only as a shop window, a place of decision-making and a point of order delivery, and the main traffic generators of shopping centres will be global verified brands, expanded segment of catering and entertainment.
When considering this trend, I would not equate online sales, which have already become classic, with the type of shopping that we expect to develop in the next three to four years," says George, Development Director of GreenShelf, a developer of IT systems for managing retail space. "Here we are dealing with a new market reality, when we are talking about the fact that shops are increasingly becoming a shop window, a place to make a decision to buy and receive an order, rather than a place where a direct purchase is made. In some retail segments, a significant proportion of product categories are already presented only as samples, and the share of such categories will grow, as will the number of operators who will implement this scheme. It is possible that the usual cash registers will be reduced to a minimum. The selection and payment for goods will be made via tablets placed in the shop or by scanning a QR code on price tags. The buyer will type in his virtual basket, pay for the purchase and receive the goods either immediately or later, with delivery".
Today, according to GreenShelf, the DIY segment is the flagship of retail transformation towards a new sales concept. According to experts, about 60% of purchases are made online, including online purchases with physical presence of the customer in the shop. In some product categories of this sector (e.g. electrical appliances), almost 80% of the assortment is on the shelves in the form of single samples not intended for sale.
Among the segments that are most likely to change the functionality of the retail space in the near future are sanitary ware, furniture, accessories, design, decorative cosmetics and perfumery. The transformation of the retail space has been postponed for fashion operators for the time being; experts believe that this is due to the need to refine software solutions that allow for the vitrualisation of the fitting process with a high degree of accuracy.
Exhibition samples, vitrualising fitting of clothes and shoes, and other new technological customer options are already coping with this task quite well," says George, "and as soon as it is solved on a consumer scale, the transformation of the retail space and merchandising concept will begin here as well.
GreenShelf specialists are confident that the proportions of leasable retail space will change in the direction of a reduction of auxiliary and storage space due to the cancellation of the need to store a large stock of goods and increase the size of the sales area for extended display and comfortable waiting area for goods.
"This does not mean, however, that by reducing stock, the shop should reduce the representation of its products; abundance on the shelves is one of the key factors of attractiveness," says Georgi , "in addition, a certain amount of demanded assortment will still be sold offline. And in this case, the most successful sales will be for the tenant who can correctly analyse the data on sales and margins of the goods sold, and as a consequence, configure its merchandising in such a way that, by focusing separately on items sold offline, it can effectively exhibit product samples".
The increased costs of operators are primarily due to the need to transform the format of their space to meet the capital's consumer shopping standards and requirements. The specialists of GreenShelf (the developer of the IT-system for retail space management), based on their own data, believe that the share of customers with a stable average income who are ready to shop in hard discounters and leave reviews about them in social networks. These are the ones targeted by the policy of the new hard discounters, who are forced to adjust their usual format.
GreenShelf experts are confident that in the next two years the share of physical purchase will account for about 10-15% of the total volume for a number of tenant categories in shopping centres, malls and hypermarkets. At the same time, experts do not expect a decrease in customer traffic, as they believe that the familiar middle-price segment shops in malls and hypermarkets will retain their attractiveness, but only as a shop window, a place of decision-making and a point of order delivery, and the main traffic generators of shopping centres will be global verified brands, expanded segment of catering and entertainment.
When considering this trend, I would not equate online sales, which have already become classic, with the type of shopping that we expect to develop in the next three to four years," says George, Development Director of GreenShelf, a developer of IT systems for managing retail space. "Here we are dealing with a new market reality, when we are talking about the fact that shops are increasingly becoming a shop window, a place to make a decision to buy and receive an order, rather than a place where a direct purchase is made. In some retail segments, a significant proportion of product categories are already presented only as samples, and the share of such categories will grow, as will the number of operators who will implement this scheme. It is possible that the usual cash registers will be reduced to a minimum. The selection and payment for goods will be made via tablets placed in the shop or by scanning a QR code on price tags. The buyer will type in his virtual basket, pay for the purchase and receive the goods either immediately or later, with delivery".
Today, according to GreenShelf, the DIY segment is the flagship of retail transformation towards a new sales concept. According to experts, about 60% of purchases are made online, including online purchases with physical presence of the customer in the shop. In some product categories of this sector (e.g. electrical appliances), almost 80% of the assortment is on the shelves in the form of single samples not intended for sale.
Among the segments that are most likely to change the functionality of the retail space in the near future are sanitary ware, furniture, accessories, design, decorative cosmetics and perfumery. The transformation of the retail space has been postponed for fashion operators for the time being; experts believe that this is due to the need to refine software solutions that allow for the vitrualisation of the fitting process with a high degree of accuracy.
Exhibition samples, vitrualising fitting of clothes and shoes, and other new technological customer options are already coping with this task quite well," says George, "and as soon as it is solved on a consumer scale, the transformation of the retail space and merchandising concept will begin here as well.
GreenShelf specialists are confident that the proportions of leasable retail space will change in the direction of a reduction of auxiliary and storage space due to the cancellation of the need to store a large stock of goods and increase the size of the sales area for extended display and comfortable waiting area for goods.
"This does not mean, however, that by reducing stock, the shop should reduce the representation of its products; abundance on the shelves is one of the key factors of attractiveness," says Georgi , "in addition, a certain amount of demanded assortment will still be sold offline. And in this case, the most successful sales will be for the tenant who can correctly analyse the data on sales and margins of the goods sold, and as a consequence, configure its merchandising in such a way that, by focusing separately on items sold offline, it can effectively exhibit product samples".
The increased costs of operators are primarily due to the need to transform the format of their space to meet the capital's consumer shopping standards and requirements. The specialists of GreenShelf (the developer of the IT-system for retail space management), based on their own data, believe that the share of customers with a stable average income who are ready to shop in hard discounters and leave reviews about them in social networks. These are the ones targeted by the policy of the new hard discounters, who are forced to adjust their usual format.