Top 50 Hot Products in Europe
In this unique research, item level data from some of the biggest Grocery retailers in Europe was shared with academics, who, using a complex methodology, were able to establish lists of the hottest products in the Fresh, Alcohol and Health & Beauty categories.
It is based upon data collected from three companies operating in the UK, focussing upon the top 50 items in each category over a 12-month period (by value and percentage of total sales). It adopts a novel methodology to allow data to be combined from companies with very different levels of turnover: generating a product risk score based upon its multiple of the overall average and its percentage of total variance.
The study is very much focussed upon describing the ‘what’ rather than the ‘why’ of hot products – it does not offer any detailed discussion on the reasons for particular types of products having a higher risk score than others.
Within categories, the study found that fresh meat was by far and away the biggest area of concern, particularly beef. For BWS, some key brands dominated the lists, not least Smirnoff Red Label Vodka and Jack Daniels. Perhaps of equal interest is the preponderance of beer and wine categories within the top 50, both of which rarely feature in traditional high-risk lists. The study suggests that these losses are not due to customer theft but are more likely to be associated with the way in which these types of products are processed within retail businesses. Within H&B products, the study noted the prominence of high value razor blades and pain relief products.
The study also noted that despite some of the products in these lists being the subject of considerable efforts to protect them on the shelf (such as the use of tagging, safer cases and so on) it would seem that the results are rather limited. It suggests that new thinking may be required for some of these products and the active involvement of all parties in the retail industry is far more likely to generate meaningful results than individual companies acting in isolation. It also points to the value of retailers coming together to share data to enable them to begin to develop strategies to deal with common problems.
Finally, the report argues that the data provides an opportunity for greater engagement and dialogue between manufacturers and retailers, something which has been highlighted in many other ECR studies.
Background
Research by the ECR Europe Shrinkage Group and others has frequently highlighted the relative risk of shrinkage to particular types of products – what are usually described as the ‘hot products’ in the retail sector. For instance, a study by Beck and Chapman presented data on the vulnerability to shrinkage of one company’s range of products, which showed that 8 per cent of Stock Keeping Units (SKUs) were responsible for 30 per cent of all shrinkage losses, while 20 per cent of products accounted for one half of all losses1 . For the most part the identification of the products most at risk has been through shrinkage surveys where respondents are asked, based upon their perceptions, to suggest those items that are most likely to suffer from shrinkage. Inevitably, such an approach tends to produce relatively generalised lists focussing more upon categories of products rather than specific items and usually focuses upon those most likely to be stolen.
For instance, the recent Global Retail Theft Barometer summarises the products that are deemed by respondents to be the most likely to be stolen and found that razor blades/shaving products and cosmetics/face creams were at the top of the list, followed by perfumes, alcohol, fresh meat and expensive foodstuffs, infant formula and DVDs and CDs2 . Further down the list are to be found small electrical items and fashion clothing. The survey undertaken by the Food Marketing Institute offers a slightly different ‘top five’ stolen items: meat, health and beauty care items, analgesics, baby formula and then razor blades3 . However, much of this data is problematic as it is simply based upon what respondents think are the items most likely to suffer from shrinkage rather than what is actually lost. While these opinions may be based upon personal reflections on data available from within their own organisations, they can also be a result of commonly held views about the items traditionally viewed as prone to shrinkage4 . In other words they are rarely based upon an actual analysis of shrinkage data and they certainly do not do this across different retailers.
For further information on this report and its findings. https://ecr-shrink-group.com/page/top-50-hot-shrink-products