Product rotation - what is it? How does product rotation work in the store?

2024 Author: Howard Calhoun | [email protected]. Last modified: 2023-12-17 10:16

In trade, there are many techniques and mechanisms that are used to increase sales efficiency and maximize profits. One of these methods is called “product rotation”. What it is? Let's talk about this phenomenon, its types and methods of application.

The concept of rotation

In our everyday life, the word "rotation" came from the Latin language, where it meant "rotation, movement in a circle." Most often, we hear about staff rotation, that is, the systematic movement of employees, most often management staff, to improve the efficiency of the organization. Also, the concept is found in the printing industry, where such a term is called the principle of operation of the printing press. In agriculture, rotation refers to the replacement of crops during sowing, when crops are moved around the plots every few years to improve the efficiency of land use. It also exists in television and radio broadcasting, where they indicate the frequency of repeating a video or musical composition. Recently, the term “product rotation” has appeared in commodity science. What's this?This is also a circular movement of goods on shelves or in storage areas. In almost all cases, rotation is related to the efficiency of a system, it involves replacing some elements with others to improve the process.

Definition of concept

In the field of trade organization and merchandising, the term "product rotation" is used. This is the process of moving goods on the shelves of retail outlets and in the warehouse in order to ensure greater sales efficiency. It may seem only to an ignorant observer that the goods on the floors are motionless until the moment of purchase, that it is enough for the seller to arrange them beautifully and you can wait until the buyers pick them up. But in fact, the goods are in constant motion, and at each stage of this path the seller pursues the main goal - to minimize costs and increase profits.

Rotation principles

In a broad sense, product rotation is the replacement of some with others in order to increase sales. The main principle of this action is to encourage customers to buy. So that he has confidence in the seller and the desire to purchase goods. Another principle of rotation is the maximum efficiency of the use of retail and warehouse space. At the same time, all the rules for the rotation of goods are reduced to the requirement of mandatory filling of the shelves at the outlet. The buyer should have a feeling of excess of goods and a large selection.

Rotation functions

Product rotation is one of the promotion tools, part of merchandising. HerThe main purpose and function is to encourage the buyer to purchase the product. As part of achieving this goal, rotation should create a feeling of constant renewal of the range and freshness of products in the buyer. There are product packaging rules that help increase sales. Rearrangement of goods, layout features help increase sales. It is human nature to pay attention to the new, to experiment with purchases. The movement of a product increases its search behavior and also promotes sales. Also, rotation allows you to speed up the change of assortment, contributes to the rapid disposal of the stale product. Any grocery store knows what problems arise with goods that have an expiration date, and rotation is one of the marketing tools here. Quick sales of goods allow you to speed up the release of storage space, which also leads to cost minimization. Of course, this method is not a panacea, it has both advantages and disadvantages, but it is one of the most effective tools for stimulating sales and optimizing costs.

Advantages and disadvantages of rotation

Product rotation is a way to convince a customer to make a purchase. Its main advantage is the ability to find the "right" place for the goods on the shelf, which will increase sales. Rotation allows you to combine related products on the trading floor, which also helps to increase sales. For example, washcloths, body care products, towels can be placed next to shower gels. Such a complexwill help the buyer to make a "package" purchase. This method allows you to take into account the seasonality of goods and put up-to-date goods in more visible places, which also speeds up the sale of goods. During the rotation, you can conduct analytical studies to evaluate the effectiveness of certain points in the store and take this into account when compiling a merchandising planogram. Rotation allows more efficient use of retail and storage space.

The disadvantages of it are that it must be carried out thoughtfully and reasonably, otherwise the economic effect of such actions may be unpredictable. If you do not take into account the rules for the neighborhood of different groups of goods, then you can get a negative sales trend. If you do not analyze and monitor during the rotation, you can also get a negative economic result.

Stock rotation

The movement of goods at each stage must be subject to the general principles of expediency and sales assistance. To do this, rotation of goods in the warehouse is carried out. Its main purpose is to sell goods before the expiration date. Therefore, an immutable rule applies here: the goods that first arrived at the warehouse should be the first to be put on the trading floor: “first in, first out”. Warehouse workers must closely monitor the shelf life of goods and move stale goods to the store shelves in time. The science of inventory management requires the employee to understand the mechanisms for the sale of goods and the ability to keep a strict record of the assortment and shelf life of each batch.goods.

Today, store formats in which goods are stored directly on the trading floor are becoming widespread. Here, special skill will be required from logisticians in order not to push goods with earlier shelf life deeper into the rack, so as not to lead to the need to write it off. The merchandiser must keep track of the deadlines and take out the goods with the expiring period for public viewing in time, most often pallet layout is used for this, i.e. exhibiting in the form of a cube or a pyramid of goods in the center of the hall.

Rotation in the trading room

For the effective movement of goods at the point of sale, coordinated work of the warehouse and sales floor employees is necessary. The company should develop a unified product labeling system, create a plan for the movement of goods in the warehouse and in the hall. This not only helps to sell products faster, but also simplifies the work of staff. When thinking about what rotation of goods in a store is, you need to remember that this is not a senseless rearrangement of goods from place to place, but a reasonable movement. First of all, it is justified by the shelf life of goods.

There is an unshakable rule: the closer the end of the storage period, the closer the product should be to the buyer. That is why sellers and merchandisers are constantly rearranging packages with goods that will soon expire in the first row, and fresh goods in the second and beyond. At the same time, you can’t leave only old goods on the shelf, hoping that they will be sold out and then put fresh ones. Psychologyof the consumer indicates that a person is less willing to take goods from a half-empty shelf. He should have a feeling of a recent arrival of products, this causes him to associate with the freshness of the goods. The rotation of goods on the trading floor is also associated with attracting the attention of the buyer. Therefore, the merchandiser must think through the layout, make sure that the buyer takes more units of products and chooses the most expensive product.

Types of rotation

Answering the question of what product rotation in a store is, it is worth dwelling on its varieties. There are several basic types of this procedure.

• Rotation by cost. The most difficult and costly way to move goods. It consists in the fact that the display of goods is combined with a variation in price. So, for example, for a seasonal product displayed in the center of the hall, the price may be slightly increased. But at the same time, you need to carefully monitor the prices of competitors. On the contrary, for a product for which demand is decreasing, you can lower the price and accompany this with a certain display and holding a promotion.
• Rotation by quantity. It is related to purchasing and inventory planning. The purchasing specialist must carefully plan and track the quantity of goods and ensure their systematic movement from warehouse to sales floor, and from suppliers to warehouses.
• Rotation by shelf life. We have already talked about this type. In this case, the old product should always reach the buyer before the fresh one.

Rotation strategies

Specialists, answering the question thatmeans product rotation, note that this is not just a "rotation" of the product in the store. This is careful planning, analysis and thoughtful rearrangements. The merchandiser and merchandiser must conduct demand analytics and, in accordance with this, conduct the purchase of goods and their movement in the warehouse. Proper procurement and warehousing helps to reduce storage costs and minimize inventory write-offs. To ensure the competent movement of goods in the company, a single rotation strategy should be developed, which includes logistics solutions, promotion and merchandising solutions. These strategies can be based on the stimulation of trial or repeated purchases, on the use of knowledge about the psychology of the consumer, on economic, price mechanisms for stimulating demand.