Shrink Control for Dummies
(How to dummy up displays to improve presentation, while controlling shrink)
Writer Daniel Keys Moran is attributed this quote: “So, we, as human beings, live in a very imprecise world. A world where our perceptions of reality are far more important than actual reality."
That is a deep and philosophical thought. The average produce manager, on the other hand, may find the quote has, of all things, merchandising application. Perception versus reality. The perfect produce display has a perception of abundance, when in fact the actual amount of produce on display is adequate for ample sales, yet manageable. And it holds much less product than it seems.
Which raises the question: How can this be achieved?
Dummying up displays using a false base is one way to limit the amount of perishable inventory on display without sacrificing the all-important “full-display” first impression. Here's a few thoughts on how to find the balance of the full-display look without sacrificing too much shrink.
Establish your desired merchandising standard.
Ask yourself, does your chain's (or individual store's) desired produce presentation feature low, flat tables with just a couple of layers of produce? Or does the look employ bountiful, heaping displays of high-quality produce that catch the customer's eye?
Typically, the desired impression is abundance.
A certain intangible buying mechanism kicks in with customers when they see an abundant produce display. The thought process may translate to something like, “Wow, with this heaping mound of mangoes, this must be a value.” Think about all the large ad displays built a day before an ad begins. In every case, sales spike -- even though the produce is still at regular price. Large displays sell much more product. The downside to any large display, however, is the associated higher shrink rate.
Define your standard for daily inventory ‘turns.'
This is how often the inventory on display sells completely, or turns, each day. Most produce managers agree that if a display turns at least once per day, this will minimize shrink while maintaining a fresh offering to their customers. By dummying up some or all of your display space, you can offer an abundant look while still achieving the all-important goal of daily, fresh turns.
Now for the $10,000 question: How can you most effectively dummy up your displays?
This depends on your chain, what your produce director or merchandiser allows, or how your store manager wants you to manage your inventory. Some chains have produce tables specially built to improve presentation or limit holding power. However, some dummying ideas can work for just about any retail format.
Most suitable dummying materials can be found within your store.
Look for things such as plastic or wooden crates, empty shipper cartons, wooden pallets, sheets of precut foam, etc. The rule of thumb is to use something that is worth little or nothing to displace space in a produce display so the at-risk component (fresh produce) on display is reduced to only what will sell in an average day.
The desired end result is risking the least amount of fresh produce and making the display easy to stock, cull and rotate, all while presenting the all-important abundant “look.”
You say yours is a busy produce department, and you don't need dummying help?
Think again. Even a high-volume produce department can suffer from high shrink. Consider all the summer melon bin displays. Suppose you want to include slower-moving casabas or other variety melons in bins. By dummying up a bin to the brim, the melons can be stacked just a couple of layers but appear full to most customers.
Or think about when high-respiration items such as cherries or stone fruit are in full swing. If your store's mode of operation is to pile items up rather that spread out, you may be creating shrink before you even have a chance to sell anything.
Even a busy store has its slower-moving, high-shrink items. Take fresh bunch radishes, for example. If your busy store sells two cases per day but your six-wide, 10-deep display holds five cases, you're going to end up with a lot of shrink.
By inserting a plastic crate or similar kind of dummy as a base, the spread-out display can easily be altered to only hold two cases – just what is needed to turn the display once a day and limit the amount of shrink. Now apply the same process to similar type of high-respiration or slower-moving items (such as eggplant, summer squash, pineapple, etc.) and you may see that, even in a high-volume operation, it's wise to use some dummying material in select displays.
To conceal the dummy material, simply cover it with your regular case liner material.
Every produce manager wants to have abundant-looking displays, but few want to sacrifice high shrink to achieve this goal. Dummying up displays takes a little planning and preparation but in the long run will help you achieve the best of both worlds: The perception of abundance, with the reality of inventory & shrink management. The result will be fresh product, satisfied customers, optimum sales and minimal losses.
It makes you wonder if writer Daniel Keys Moran was actually a produce manager in his day job.