Six seconds. That’s how long retailers have to make a sale in-store for a given product. Such short customer attention spans demand assortment optimization and data-driven merchandising analytics, ensuring products are placed on the shelf in a way that maximizes visibility and conversion.
Efficient merchandising at shelf, coupled with the right assortment, is no longer optional—it’s a competitive necessity.
Unfortunately, attention spans are only one of the challenges in this rapidly evolving omnichannel retail environment.
The lack of shelf space is of particular concern. In fact, from January through Q3 2025, US retailers closed an estimated 127 million square feet of store space. Net absorption—a measure of how much retail space is occupied, versus vacated—has remained negative, at 13.1 million square feet, putting the market on track for the first year of negative demand since 2020.
Less shelf space means stiffer competition to get and maintain product placement, especially at a time when private label brands continue to grow and put pressure on pricing and brand loyalty. More than ever, manufacturers need to demonstrate to retailers the value and relevance of their products.
Data-driven merchandising analytics hold the key
Retailers and manufacturers face shrinking shelf space, rising private-label competition, and increased pressure to demonstrate category value. Merchandising analytics enable shopper-centric assortments, optimized pack sizes, and informed promotional strategies by revealing consumer behavior and buying patterns at a granular level.
With e-commerce accounting for 16.3% of total US sales, omnichannel execution is essential. Retail assortment planning and category management decisions must align across in-store and online environments to support fulfillment, profitability, and shopper conversion.
Leveraging data for
assortment optimization
Historically, shelf space supported foot traffic, promotions, and inventory. Today, it must also accommodate online order fulfillment, personal shoppers, and excess inventory driven by labor constraints. As a result, shelf space optimization is more complex and more critical than ever.
Advanced merchandising analytics and planogram software help manufacturers and retailers make smarter assortment rationalization decisions, reduce product cannibalization, and improve SKU productivity. By linking consumer behavior analytics to planogram execution, teams can identify incremental growth opportunities and improve overall category performance.
In an increasingly competitive retail landscape, data-powered assortment optimization enables manufacturers to anticipate demand, collaborate more effectively with retailers, and win and defend shelf space.
Discover how data-driven merchandising supports sustainable growth in The Ultimate Guide to Merchandising & Assortment.
