Continuing the thought from yesterday’s blog about new product categories, one of the most important decisions businesses are making involves the allocation of space. Who decides how much shelf space to allocate to K-cups and related products? What used to be on the shelf before Kuerig was popular?
These decisions are made with the thousands of items that stores carry. Our grocery has six types of water chestnuts (natural, whole, sliced, Pacific fancy, LaChoy and generic). Where in the logistics chain did someone determine that we needed six — rather than four or eight?
I am sure that the scanning software allows the corporate office to know which brands are selling and which aren’t, but big data can only shed light on what is. If we had a different type on the shelf, perhaps it would be the winner.
How much space you allocate to products and how much time you dedicate to services becomes a crucial strategic question for your organization. Don’t focus your thinking so much on the “what” so that you overlook the other variables such as space and time that are competing for your resources.