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What came first the chicken or the egg?

And in fact what has that got to do with space and assortment planning anyway? The answer is quite a lot actually. The space allocation to categories, ranges and skus is more often than not related to their previous sales performance. The poor performers get a smaller allocation whilst better performers get larger allocations and in more prominent positions in store. Of course, this directly affects the future potential performance - something of a self-fulfilling prophecy.

Essentially there is the opportunity to explore the relationship of observed demand relative to the quantity (and quality) of space allocated, and by applying the concept of manipulating space to influence demand this "space elasticity of demand" approach could be utilised to really enhance retailer's space performance KPIs

So, it can be proven that there is a relationship between total space, location of the space in the store and the likelihood of a sale. Overlay the fact that in most non-food retailers the minimum credible display quantity in a store is the largest proportion of the stock investment and there is a "virtuous triangle" in play between space, demand and stock - get one out of line and there is an immediate impact on all the others.

Range strategies and directions give the forward looking steer that help divide up the macro space allocations on potential, not history. Moving along the timeline as products are known and assortments considered micro space; with associated considerations of visual impact, display stock investments, adjacencies and colour blocking; can aid decision making with regard to what the final store assortment should be. A healthy tension can exist between the merchandiser, wanting to drive sales and present a "credible offer" providing "consumer choice, price architecture and range completeness" and the supply chain teams who simply see the sku-store rate of sale vs. the required minimum display stocks as an inappropriate placement of stock for traditional stock turn / stock cover measures. The final decision reached when all of these aspects are considered is most likely to be the best decisions possible.