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Chapter 3. Retailing Secrets: Tips from ... > Planograms and SKU Rationalization

Planograms and SKU Rationalization

Stores are physically space-limited and, therefore, cannot accommodate all SKUs. SKU rationalization is a method for selecting, listing, and placing key products on the shelf.

The physical store allows for only the most profitable SKUs to be placed in prime locations. Other products are relegated to the bottom or top rows of the shelf that are shopped less frequently—and many don't make it to the shelf at all. Customers dislike getting on their hands and knees to find items and often disregard products placed in odd locations. Some stores, such as grocery chains, charge manufacturers stocking fees to place their products on the shelves. Premium placement commands higher fees. The practice may discourage placement based on consumer needs.


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