Stock rotation is a common strategy employed in small and large retail stores. Essentially, the process involves displaying older items for sale more prominently than items that were recently acquired. The idea behind this type of rotating process is to move older products out the door in order to make room for other and newer ones.
While stock rotation is used in every retail outlet, the strategy is particularly prominent when it comes to selling perishable items, such as packaged or fresh foods. Many commercially packaged items, such as cereal, canned goods, and dairy products, carry a date by which the product must be sold or removed from display. As this sell-by date approaches, merchants tend to move these items to the front of the display shelves, placing newer products behind them. For casual shoppers who do not pay attention to these dates, the chance that they will simply select the item at the front of the shelf is much higher.
Some manufacturers consider the rotation of stock to be essential to maintaining a positive public image. Companies with this mindset often employ personnel who travel around to the various retail outlets carrying their products and determine if it is time to remove older products from public display. This action helps to ensure that consumers do not purchase products that are on the verge of becoming stale and thus less desirable in terms of quality or flavor. When a manufacturer employs this type of policy, it is not unusual for them to issue some type of credit to the store owners for any items that are removed from public sale.
Supermarkets and convenience stores commonly rotate stock on an ongoing basis. Moving products to the front of the display are sometimes augmented with offering some sort of discount off the usual retail price. For example, a supermarket may apply a discount of up to 50% on a gallon of milk that is about to reach its sell-by date in an effort to obtain as much profit from the item as possible. Meats are sometimes marked down in an effort to move them before they spoil. The rotating stock is moved to a more prominent position in the coolers than the freshly prepared meats, improving the chances that shoppers will see the meats and purchase them for use within the near future.
Even older products that are not perishable are sometimes rotated. Clothing that is about to go out of season is sometimes moved to a prominent area of display in an effort to sell the items before they have to be stored away until the following year. Older audio and video equipment, such as CDs or software programs, may be shifted to the front of display cabinets or shelves, working on the theory that rotating products to a more prominent area will make it possible to sell the units before they become too old or obsolete.
The process of stock rotation is a simple marketing strategy that can often help to minimize loss to the retailer as well as to the manufacturer. It does not work in every case, however. Items that are seasonal or considered fads may fail to move even when displayed prominently and offered at a discount. In addition, savvy shoppers are familiar with the concept and will often reach for an item that is near the back of the shelf, disregarding products that are displayed toward the front.