Shelf Strips - Retail Industry Today

In regular conversations with retailers, IPMS continues to find store set and reset execution solutions that previously were either “not cost effective” or “too complex” or “required significant work” in order to implement. We find that the first step in providing these solutions is overcoming prior experiences that may have tarnished the view of shelf strips. The solutions IPMS provides continue to show values in many cases upwards of $4 per strip foot, at least a 3200% ROI.

In general, most retailers have heard about or have previous experience using some form of shelf strips in some capacity, both with and without price labels. Usage varies between offset and digital printing methods. We also noted that shelf strip use varies based on the evolution of a retailer, as the retailer grows through phases and sizes across all segments. This is the area that seems to have caused the highest failure rate – retailers “outgrew” the solution by their previous provider.

Based on the discussions we have regularly with retailers, there appear to be a consistent set of prior experiences that have soured the perception that a real, value driven, integrated shelf strip solution is available in the marketplace. The cause seems to consistently be the inability of the previous shelf strip service provider to understand and adapt to the ever changing needs of the retailer. Naturally, the shelf strip programs were ceased, causing increased pressure on the store personnel to execute without tools to improve accuracy and efficiency. It is absolutely critical that the shelf strip solution is integrated as part of a long term and evolving strategy.

Here is a summary of the most common reasons retailers ceased use of shelf strips:

1. Inaccuracy of shelf strips delivered to store. Strips delivered to store did not fit, product did not align, etc. Inconsistent results required over management by retailer. The retailer is forced to focus on less volatile or more common sections of stores. Corporate Office has to overcome inefficiencies and micro-manage data flow, audit accuracy and confirm results.
2. Variable fixture types and sizes could not be integrated into the solution. The service provider did not have the ability to adapt and produce strips that fit correctly into the shelf channel.
3. Current provider was unable or it was deemed not cost effective to support required lead times for price changes and/or agility. Service provider does not have a dedicated facility for shelf strip production that can also quickly produce reprints/ad hoc prints.
4. Service provider lacks understanding of store procedures, planogram system/processes and business rules of each retailer. Provider was unable to provide a customized solution based on total needs of retailer. Retailer forced to use strips for only certain areas , inconsistency across store creates difficult store processes.
5. Store management doesn’t trust or loses trust that strips will work due to inaccuracy/inconsistency. Creates negative perception of corporate strategies - “you don’t know me” and/or - “I know best how my store needs to be set”
6. Unable to support zone and/or store specific planogram/pricing requirements.

Increased complexity of merchandising systems outpaced providers ability to adapt.
We also find that in certain segments, the use of a shelf strip solution has been modified to a generic “Merchandising Strip” that does not contain a price label for some fairly consistent reasons:

1. Short lead time requirements to execute volume of price changes on shelf strips.
2. Inability of service provider to meet jurisdiction label format requirements
3. Service providers cannot identify, produce and kit targeted shelves or sections within a planogram
4. Compromise of keeping shelf integrity and price label accuracy at same time due to high volume of price changes
5. Belief (or being told by service provider) that it is too complex, therefore too expensive and IT can’t support the complexity
6. Service providers cannot provide an integrated price change/shelf strip solution.

IPMS has also documented consistent characteristics associated with a successful shelf strip service for a retailer. Retailers that use an effective shelf strip service continue to realize labor savings and revenue improvements :

1. Have same basic planogram system as all other retailers
2. Use planograms in store
3. Have IT department that is integrated with Merchandising
4. Have said that they will not open, remodel or reset a store without strips – they can’t afford it.
5. Have Store Operations and Corporate support and enforcement to achieve merchandising and operations objectives at the store level. All levels of organization and Field management advocate shelf strips for the most accurate execution of merchandising strategies
6. Have service provider that dedicates resources to develop specific retailer/category/store solution. The solution is customized to deliver highest degree of efficiency at both the corporate and store level. It is not viewed as a generic, commodity service.
7. Have a service provider with data processing expertise that uses planogram files and store/zone specific price files, audits data for accuracy, validates to business rules and produces store specific print files that are integrated with printer efficiency.
8. Have service provider with merchandising experience in order to help retailer continue to refine internal processes for planogram system and improved use of planograms both as analytical and implementation tool.
9. Have labor model to stores based on use of shelf strips for resets and regular maintenance. Store personnel achieve the same results regardless of who completes the reset – lower the fully loaded cost.
10. Service provider has dedicated facility to handle shelf strip and all reset components – providing best scenario for turn around and small run production.

IPMS has been working with retailers to achieve these success characteristics over the past 12+ years through continually updating and integrating retailer specific business rules to our patented shelf strips and software systems. Our software and systems are designed specifically for shelf strip production and result in the highest quality, most effective and highest ROI shelf strip services available.

If you want to achieve the results described above, we would be happy to help. Contact IPMS

This entry was posted on Wednesday, May 14th, 2008 at 1:44 pm by Bill Francis and is filed under Blog. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.