What is Digital Shelf Share?
One of the brand’s key performance indicators (KPIs) within the online offer is Digital Shelf Share (or Digital Display Share). It is a KPI showing how many digital positions relate to a particular brand compared to all digital positions currently available in the observed market.
What is Digital Position?
A digital position is an individual offer of one product within the online offer of a retailer. Example:
Digital Shelf Share consists of the following 4 KPIs:
- Brand Portfolio KPI (chart 1)
The chart shows the number of different products (SKUs) per manufacturer.
- Display Share KPI (chart 2)
The chart shows the share (%) belonging to a particular brand in the observed market
- Display Position Count (chart 3)
The chart shows the total number of digital positions.
This chart corresponds to the Display Share chart, except that it shows the absolute number of positions instead of a percentage.
- Multiplication Factor (MF)
The Multiplication Factor shows the ratio of the total number of digital positions of a brand to the number of different products (SKUs) that that brand has to offer.
A higher Multiplication Factor (MF) indicates that a brand has more online coverage than a brand with a lower MF.
Why is Digital Shelf Share relevant?
We have already written on the topic of the importance of Shelf Share in brand development and growth in our article on the use of market data in brand management.
The Digital Shelf Share of a product is linked to the sell-out share of that same product. More precisely, Shelf Share directly affects the sell-out, so the number of examples of our beneficiaries shows a correlation between the number of digital positions of a brand and the share of sales on the level of that specific brand.
Classic brick&mortar retailers make very good use of the connection between Display Share and sell-out share, so product placements on the shelf is a well-established service charged by the retailers to the vendors and brands.
Let's take a look at the following example.
Brand A aims to achieve 24% of the market share in the market within the current quarter (24% of sales in the product category).
Brand A has 22% Display Share (meaning it has 22% of all digital positions in all the retail shops under our observation) with a wide products portfolio (between 15 and 20 products).
Brand A has 12% Display Share (12% digital market positions), with 3 products expected to be top sellers.
In which scenario is it more realistic for the brand to reach the target market share?
Intuitively, in scenario 1, which has proved to be correct in a large number of cases.
The brands, therefore, include in advance the costs of developing, marketing and displaying a number of products, including so-called filler products, allowing them to achieve high visibility in order to achieve the desired sell-out share.
Let us consider another example.
Brand B also aims to achieve 24% market share, and they have 10 products in their portfolio.
How can Brand B provide sufficient Display Share in order to achieve the desired sell-out?
By achieving a higher multiplication factor (MF).
By displaying its 10 products with as many online retailers as possible, brand B achieves a high MF, which enables a competitive advantage over brand A, which has a larger number of products, but with fewer retailers.
This is especially important for categories of goods largely sold online, since in online shopping the customers make the purchase decisions not only on the basis of the product brand, but also on the added value provided by the online retailer. This can be a price or a fast delivery time, special payment terms, level of customer support or goods return terms.
In both scenarios, the data from the Kliker market help the brand manager to monitor the Shelf Share for each product category separately, as well as the trend of the same over time. In addition to Display Share at the time of accessing the application, a glance at the graph shows a growing or declining trend of Display Share of a brand in the overall market, but also with an individual retailer in that market.
Why is Shelf Share tracking per retailer useful?
Because it is this information that provides the managers with the basis for decision on where to look for room for further growth.
if the Shelf Share brand in the total market is 19%, and we target 25%, the analysis of all retailers makes it easy to identify retailers, at which the share is currently significantly smaller and there is room for improvement.
The use of KLIKER market and KPIs related to Brand Share is just one example of how to use market data within brand management. Our users are multinational companies managing a large number of consumer electronics categories, and we are adjusting the data display to the needs of our customers, based on usage feedback.