Adjacent categories can have
a significant influence on sales

Products of a particular kind are assessed in the context of the surrounding categories. The context of their placement may stimulate or limit category sales. The direction of the influence is dictated by whether/what kind of qualitative and substitution relationships occur between products and adjacent categories.

CONSEQUENCES FOR BUSINESS

The choice of neighbourhood for products is important both on the level of the floor plan and the shelf planogram and it can be crucial for the sales value.

CASE STUDY

In a supermarket chain vegetable oils are placed on the same shelf as olive oils – these categories constitute adjacent sections in one row of shelf racks. The neighbourhood of oils influences the perception of vegetable oils – as we know, olive oils are more expensive and the design of their packaging is a bit on the premium side. Planogram experiments prove that 5l oil bottles sell better when they are further away from the olive oil section than when they are placed right next to it. When 5l vegetable oil bottles are adjacent to smaller packages of vegetable oils (1-1.5l), customers notice price benefits which stem from purchasing a bigger package. However, when a 5l bottle stands next to the olive oil section, the contrast built between decoratively shaped glass bottles of olive oil and plastic ’barrels’ of vegetable oil is much too great.
The attractiveness of the oil in a big bottle is reduced by the vicinity of olive oils and thus its sales dwindle.

BUSINESS RESULTS

Experiments show that the vicinity of products influences their sales even up to 20–30% of the sales value.

TIPS BEFORE APPLICATION:

  • Ask yourself: which adjacent categories can create an appropriate context for the product’s sales?
  • Ask yourself: in which context should the product be placed? Should the context be built by contrast concerning e.g. the quality (high/low), price (cheap/expensive), on the basis of complementarity (special offer) or substitution (a better alternative)?
  • Ask yourself: what context will best address expectations, ideas and concerns of the shoppers?