Business Intelligence and FMCG Glossary: #shareofshelf
Share of shelf
What is the share of shelf?
The share of shelf is a KPI that allows us to measure the on-shelf presence of a brand/manufacturer compared to the competition.
There are 3 main methods that allow us to calculate the share of shelf:
- Method 1 – facings count: ratio of a manufacturer’s number of facings vs. total of the category/competition
- Method 2 – shelf centimeters measurement: shelf space ratio in centimeters occupied by a manufacturer vs. total category/competition (used for example when packaging sizes are not homogeneous across the category)
- Method 3 – image recognition: using photographs/videos of the complete shelf and applying various algorithms, one can record the share of references of a given manufacturer/brand vs. total category.
We know the importance of “holding space” on shelf to attract the shopper’s attention and maximize purchase. Monitoring the share of shelf allows to measure the effectiveness of on-shelf visibility of brands!
Comparing shelf share to market share we can evaluate whether a manufacturer is over- or under-represented at a point of sale:
- Share of shelf > market share: well-negotiated assortment that will maximize manufacturer growth.
- Share of shelf = market share: the most normal, “fair” situation adjusting the presence on shelf to the importance of sales
- Share of shelf < market share: dangerous situation that can lead to high out-of-stocks issues!