Promoting impulse buying by allocating retail shelf space to grouped product categories |
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| Authors: | Tulay Flamand Ahmed Ghoniem Bacel Maddah |
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| Affiliation: | 1.University of Massachusetts,Amherst,USA;2.American University of Beirut,Beirut,Lebanon |
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| Abstract: | This paper addresses a problem where a retailer seeks to optimize store-wide shelf-space allocation in order to maximize the visibility of products to consumers and consequently stimulate impulse buying. We consider a setting where the retailer, because of product affinities or the retailer’s historical practice, has pre-clustered product categories into groups each of which must be assigned to a shelf. On the basis of its location in the store layout, each shelf is partitioned into contiguous shelf segments having different anticipated customer traffic densities. The retailer seeks to assign each group of product categories to a shelf, to determine the relative location of product categories within their assigned shelf, and to specify their allocated total shelf space within given lower/upper bounds. We propose a 0–1 integer programme that takes into account expected customer traffic densities within the store, groups of product categories, their relative profitability, and the desirability to keep certain product groups in the same aisle, with the objective of maximizing the impulse buying profit. The proposed model is grounded in a preprocessing scheme that explores feasible assignments of subsets of product groups to available aisles by iteratively solving an Open image in new window | |
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