SH.A.R.P.: Shelf Allocation for Retailers' Profit

Abstract

Shelf space is the retailer's scarcest resource. Space management tools are thus badly needed. For that purpose, commercial computer packages and optimal allocation models have been developed. Building on the work of Corstjens and Doyle, we elaborate a general, theoretical shelf space allocation model, which focuses on the demand interdependencies prevailing across and within product-groups. Rules of thumb are compared to the derived optimal allocation. The SH.A.R.P. model is introduced as a simplified, yet realistic, variant and validated against data collected in a Dutch supermarket chain. Subsequently, the feasibility of its implementation has been experimented in various Belgian chains. Case studies demonstrate the profit potential of SH.A.R.P.