Grocers Take Over Product Placement

Supermarkets are analyzing their own data to decide which brands get prime shelf space.

February 24, 2020

ALEXANDRIA, Va.—Grocers are taking store layout and product placement into their own hands, reports the Wall Street Journal, as supermarkets are prioritizing niche products and store brands over traditional products from companies like General Mills and Clorox. They are cutting back on shelf space for these long-standing brands and instead focusing on products that have higher demand and deliver better margins.

Grocers like Kroger and Walmart are relying on their own proprietary research to determine how and where to shelve certain products. High-tech software and algorithms enable these grocers to use video-surveillance and collect data from customers as they shop. Using their own data from their own stores, they are able to determine where it makes sense to place items.

Historically, retailers have relied on insights from big consumer-brand companies to determine shelf placement as grocers didn’t want to heavily invest in consumer data. But as new trends take shape, including natural and healthier options, grocers are realizing the autonomy they have.

A former Kroger executive said the relationship between retailers and food makers has changed. “It used to be more of a personal relationship,” he said. “It’s become cold, hard facts that make decisions.”