Non Sales Revenue in Modern Retail

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Non Sales Revenue in Modern Retail

Post  Anand on Wed Aug 20, 2008 5:15 pm

Non Sales Revenue form a good percentage of the revenue generated for Organized retailers. This concept is ever prevalent in the US where in-store advertising and the fight for best visible shelf space has been around for a while.

The non sales revenue earn upto 45% of the operating profits in the case of big retailers like Big Bazaar and even smaller ones like ITC's Choupal Saagar.

In Store:

* Shop - in - Shop
* Gandola advertising
* Glow Signs
* Display Signage
* Impulse bins
* Product display space

Outside Store:

* Show Window
* Store front-facia
* Kiosk

All these modes bring in money in the form of non-core activities. The leveraging power of the Retailer kicks in here.

There are certain brands which are strong enough to be placed where they want to be placed and still pay minimal if any to the Retailer.
A simple example is Cadbury's: Majority of the retailers place Cadbury coolers at impulse points and near the cashier without the company having to pay retailer for that space.

There is also a famous case of Allen Solly and Shoppers Stop, where the latter stopped stocking the famous former brand because of the low non-sales revenue agreement. Allen Solly wanted the best space in the store since it is perceived to be one of the best premium brands, but the premium it offered to Shoppers Stop was significantly low.


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