Does my brand contribute more or less than its fair share of dollars relative to share of space? Analyze using POS Data.

Does my brand contribute more or less than its fair share of dollars relative to share of space?

The Share of Assortment vs. $ Share is also referred to as "Space to Sales", except our version is from POS data. Unless you are a buyer or an analyst for a retailer, most of the time you will not receive schematic input or have the lack of space planning software.

What we are essentially doing is looking at the products TDP (depth of distribution) relative to the products $ share of the category. We use TDP to calculate share of items or depth of items by dividing the products TDP into the category TDP to derive to a percent. Dollar share is derived in the same manner.

Let's assume your product is Bob's chips which is more of a regional brand since it has the least amount of distribution whereas all other brands are in the 90% range. So Bob's Chips is more like a regional brand trying to expand and grow in Retailer X, but the buyer is not convinced your brand deserves more facings or additional distribution. At the moment Bob's Chips ranks #4 (out of 5) in dollars from a standard brand in rank report. There are several analysis out there you could use to spin it, but in our example we will be using the Share of Assortment vs. $ Share report to relate how efficient Bob's Chips is, and how productive it can be with the allotted space it has on shelf vs. other brands.

Result:

Bob's Chips has a 17.5% share of category dollar using just 5.5% of the shelf space. This means Bob's Chips generates more than 3x the dollars relative to its share of space. This makes Bob's Chips an extremely efficient brand for the retailer. You can then state that Bob's Chips is under-spaced and should have more facings of its best-selling items in addition to increasing its breadth of distribution for the retailer. It is a proven brand performer.

The buyer might come back with saying that other brands are also under-spaced too and they rank higher than you. In this instance, you can state the differences in the indices. I mentioned earlier that Bob’s Chips sells more than 3x its dollars vs. its share of space. I simply calculated the (share of dollars / Share of items) x 100 to get an index number showing the relationship between the two factors. Bob’s Chips has a share over space index of 321 which is higher than any of the other brands under-spaced in the category. For example, Blue Chips ranks 2^nd best-selling brand and is under-spaced. But the $ Share over item index shows Blue Chips generates 2x the dollars vs. share of space while Bob’s does more than that and its share of the category is not too far behind Blue’s share, so we can help validate this point.

This is just one factor you can use among many other analysis out there that you can compile into a story and build a sales deck.

Calculations:

Share of items = (Products TDP / Category TDP)

$ Share = (Products dollars / Category Dollars) this should be a standard measure available to you in a database.

Share / item index = ($ share / share of items) x 100

See the example charts below.

 

 Whenever a brand or product has a higher share of items over $ share, it is over-spaced. When reversed, it is under-spaced. See Excel table below with the data.

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