Retailers struggle to find efficient ways to make goods accessible to customers. A report found that large food companies dominate supermarket shelves through fees paid to retailers for premium product placement. These fees include slotting fees for new products, pay-to-stay fees to remain in visible shelf locations, and display fees for promotional placements. As a result, smaller food companies face an imbalanced playing field with less access to shelf space. Retailers have also tried e-commerce options like buy online pickup in store, but many customers experienced problems receiving their online orders due to difficulties maintaining customer service quality without increasing labor costs.

1. Retailers Struggle
to Find Efficient
Ways to Make
Goods Accessible
Shelving Shop Group
http://www.shelvingshopgroup.co.nz

2. The Center for Science in the Public Interest (CSPI) recently released the results of an
investigative report that detailed the correlation between sales and product location
on the shelves.
Do Food Manufacturers ‘Rig’ Supermarket Shelves?
Supermarket chains make billions of dollars with the fees they charge to international
food manufacturers. In the report from CSPI, supermarkets impose three kinds of
fees on manufacturers:
 Slotting Fees: for the introduction of new products, such as new flavours of a
certain product or the launch of a new brand from a parent manufacturer.
 Pay-to-Stay Fees: for products to remain on the most visible and accessible
fronts of the shelves, thereby making sales more likely.
 Display Fees: for ‘premium product placement’, which involves displays such as
end-of-store aisles and flashy, decorative signs meant to attract customers.
Retailers often resort to shopfittings with innovative designs to attract
consumers and provide easy and intelligent, but cost-effective solutions.

3. Because of these fees, goods from larger food conglomerates dominate shelves and
displays in supermarkets and retail boutiques. Instead of a competitive arena, the
advantage created through the payment of fees to secure premium product
placement makes for an imbalanced playing field.
Why E-Commerce Goods to Customers Failed
To combat this, boost sales and reduce delivery costs, stores have attempted to offer
e-commerce ‘buy online, pick up in store’ strategies but they have proved ineffective,
despite higher growth in online sales. In a survey of over 1,000 respondents, of the
35% who took advantage of these kinds of offers, over 50% experienced problems
when claiming their purchases. While in theory, offering e-commerce seemed to
create a more level playing field, the problems of delivery caused setbacks.
It takes more effort to manage and implement ‘buy online, pick up in store’ offers
within the shop-setting rather than from a warehouse. It is difficult to maintain
quality customer service without putting additional pressure on their staff, and
compromising labour expenses. As a result customers have been inconvenienced
when acquiring their goods, resulting in losses for both the sellers and
manufacturers. Research has found that customers are particularly unforgiving when
it comes to failure with their online purchases.

4. SOURCES:
http://www.shelvingshopgroup.co.nz/shopfit-home/shopfitting/
http://www.wsj.com/articles/retailers-struggle-getting-e-commerce-goods-to-
customers-study-says-1446634802
https://cspinet.org/news/supermarkets-%E2%80%9Crigged%E2%80%9D-through-
secret-deals-food-manufacturers-20160928
http://qz.com/807723/inside-the-secret-backroom-deals-big-brands-make-to-vie-for-
control-over-grocery-stores/