In writing one of the adages says: »Kill your babies!« Means that you have to relentlessly cut down the particular scenes you like but don’t work as a part of the whole. Throwing away is hard to do because the writer invested a lot of time and emotions into it. But no one cares!
It’s similar in retail.
When preparing the proposal for remodeling store layout, the analysis through our home solution – Smart Space Layout Model – showed that we have huge trouble with a particular category. Obviously the most important category in the store – as it took 19 bays of the shelves more than any other particular category. But the sales were nowhere nearly related to space dedicated and – on top – the trend curve was pointed steeply down with index 91.3 on year to year level. The Space Model recommended: CUT! And cut relentlessly!
We were thinking. Discussing. Questions popped up. Yes, the trend is down but it’s still a very important category. Will this sink it? Will this damage the overall profitability? Will … this and that? Finally, we made a decision – cut! And we cut – from 19 bays to 6 bays – now we had less than 3 times previous space.
Then we measured. The result? The stock level fell enormously, of course. Very positive. The additional space that opened up brought additional sales for the extended categories so we were on the safe side. With this in a pocket, it was a bit easier to approach the final question – what did we do to the category?
So we dared to ask the Model: »What was the impact? What happened to the sales?«
Hm. Didn’t fall so steeply as stock for sure. In fact – it didn’t fall at all. Slightly increased. For a long period, the negative trend was turned around and went from 91.3 to 100.8 -> or even better incrementally 110.4. (Why? Probably because cutting means decluttering. And decluttering means simplifying decision-making. And now the category is less visible but more »buyable«?)
What would we achieve if we cut down from 19 to 15 meters? Or 12.5 meters? It wouldn’t have any significant impact and we’d probably come to the conclusion that reducing doesn’t work and the category would be still sliding down.
Afraid of the consequences?
Leverage the fantastical – yet in digital haste often overlooked – a tool of test store remodeling. Study the problem and decide where to cut. Then do it on a prototype case. And do it thoroughly. After all, it’s only one case! It least you’ll get to the valuable conclusions.
Very likely you’ll dramatically reduce stock and slightly increase sales. And get the learning you can expand from one case to the series of cases. Maybe hundreds of them!