Grocery Stores Are Choosing Their Own Product Placement, Pushing Out Big Brands
Some supermarkets are now handling their own analytics and seeing their shelves in a different way.
The placement of groceries in supermarkets isn’t random, and if you find yourself struggling to grab something off the top shelf, it’s not out of spite. For years, big brands have gotten the best positioning not only because that’s what the most people were after, but also—as some people may not realize—because they often pay “slotting fees” to lock down coveted shelf space. But those times may be changing.
According to a report from the Wall Street Journal, the old model led by “category captains”—big brands that were essentially able to throw their weight and, more literally, their money around—is shifting. Surprisingly enough, grocers used to primarily rely on brands to provide sales analytics because it was one less expense and hassle the shop had to deal with. But thanks to technological advances, large grocery chains have realized that by handling analytics in-house they can make more money with that info than they were saving by not doing it. “Our retailers have better information now,” General Mills Chief Executive Jeff Harmening admitted to the WSJ. “So more of our conversation is about ‘How do we drive growth together?’”
Even more surprising is just how much data big chains like Walmart and Kroger collect now. Modern software can even reportedly work with video surveillance to calculate how long customers spend looking for items. Bringing this data in-house has another advantage, too: The growth of grocers’ own private label brands means a supermarket can use their own data to better understand how to sell their own products. “They have a big brand telling them to do it one way, and their own analytics telling them to feature more private-label or challenger brands,” packaged-food analyst Alexia Howard of Bernstein told the paper.
As a result, if you ever find yourself reaching to the top shelf for General Mills products like Betty Crocker and Bisquick instead of seeing them in the coveted “strike zone” just below eye level, again, it’s not out of spite; it’s just proprietary research at work. Maybe if you had grabbed that Bisquick faster last time, the grocery store’s surveillance camera-informed algorithm would have left that product where it was!