Retail shelf strategy & shelf optimisation: what they are and why they matter

Key takeaways

• Strategic foundation: Shelf strategy sets the high-level plan for brand presence while optimisation is the tactical engine that makes that plan operational.

• Real-time auditing: AI-driven tools like image recognition allow field teams to audit shelves in seconds rather than minutes.

• Incremental sales: Leveraging AI-driven sales recommendations helps identify whitespace and optimise inventory to reduce out-of-stocks.

• Perfect store execution: Integrating strategy with automated tasks ensures promotion compliance and consistent results at scale.

Executive Summary

In-store execution is the primary driver for sales growth in APAC, yet it is uniquely challenging due to the region’s massive retail fragmentation. According to Economist Intelligence, APAC’s retail sector is poised for 5.1% growth. This outsized performance compared to global markets means that shelf space is now more contested, and more valuable, than ever before.

To capture this growth, brands must master the dual disciplines of retail shelf strategy and shelf optimisation. Fragmented tools and manual reporting in high-growth markets like Southeast Asia and India currently lead to massive leaks in revenue.

TELUS Agriculture & Consumer Goods bridges this gap by transforming your retail shelf strategy into a high-speed growth engine through our AI-powered Retail Execution solution. By replacing manual audits with real-time image recognition, we empower brands to navigate the complexities of traditional and modern trade with precision. To win at the point of purchase, New Zealand manufacturers are moving beyond static planning to a robust framework where continuous optimization ensures every product is in the right place, at the right time and every time.

What is retail shelf strategy?

In APAC, retail shelf strategy success depends on how well you adapt to local shopping habits. Manufacturers must account for a wide range of store formats, from high-end "perfect stores" in Sydney to high-volume kiosks in the Philippines. A strong strategy defines exactly how a brand should stand out in a crowded, high-sensory environment.

A strong strategy targets the right stores with strategic precision to ensure every minute spent in the field is focussed on impact. This includes analysing store clusters and historical performance to determine the optimal picture of success.

What is shelf optimisation?

While strategy is the "what," shelf optimisation is the "how". It is the tactical, ongoing process of using real-time insights to adjust shelf positioning, improve product availability and ensure promotion compliance.

Optimization in APAC is about speed and mobile agility. It involves using AI-powered image recognition to instantly identify gaps in busy urban kiosks or hypermarkets. This technology has become essential because, as reported by VietnamPlus, the pressure on Southeast Asian supply chains intensifies during major holidays, where demand often exceeds previous year levels by double digits. This volatility makes traditional forecasting difficult. By leveraging AI-driven visibility, brands can instantly identify gaps on the shelf, ensuring they capture the 10%+ increase in purchasing power typical of the festive season.

Shelf strategy vs. shelf optimisation: how they work together

Strategy and optimisation are two sides of the same coin. Strategy sets the direction, defining active campaigns and mandatory shelf audit requirements. Optimisation makes that strategy perform by providing field reps with guided visit plans that adapt based on store format and conditions.

You need both: strategy sets the vision while optimisation makes it operational. Without strategy, optimisation lacks focus; without optimisation, strategy remains theoretical. Together, they create a feedback loop where execution data informs future strategic planning.

The fundamentals of success at the shelf

Winning at the point of purchase requires a consistent approach to the "perfect store" framework:

• Route optimisation: Automatically ranking stores based on multiple KPIs to ensure reps visit high-value locations first and spend more time with the right customers.

• AI-powered orders: Managing inventory and growing sales with replenishment recommendations to avoid out-of-stocks and prevent excess inventory.

• Guided merchandising: Empowering field teams with mobile tools that tell them exactly what to check and where to focus.

How data and technology drive performance

As the APAC retail landscape continues to digitalise, brands are moving away from manual processes that 56% of organisations identify as too time-consuming. Manual, spreadsheet-based processes are prone to errors and delays. Modern tools replace these with real-time dashboards and actionable visit summaries.

Asia-Pacific is leading the "Mobile-First" revolution. AI has already moved beyond the proof-of-concept stage; according to IDC, AI-related investments in Asia/Pacific are projected to grow 1.7x faster than overall digital technology spending.

In the retail sector, this investment translates into modern tools that replace manual audits with real-time dashboards. This allows brands to manage thousands of disparate outlets without an army of manual auditors, while empowering field reps to shift from being “order takers" to becoming "strategic consultants" for small-scale retailers.

How to build a shelf strategy and optimisation programme

1. Analyse historical data: Review past visit results and compliance gaps using smart analytics to find patterns.

2. Define your "picture of success": Establish clear planograms and promotion standards for every store format.

3. Optimise routes: Use smart navigation and intelligent ranking to reach more customers in less time.

4. Execute automatically: Use image recognition to capture shelf intelligence in seconds, allowing reps to focus on relationship building and selling.

5. Coach reps: Utilise real-time performance monitoring and coaching tools to align on next steps while visits are still fresh.

What KPIs matter most?

To achieve a perfect store, brands must assess on-shelf KPIs that make a real difference:

• On-shelf availability (OSA): In APAC, OSA is the difference between a sale and a permanent loss of a customer to a local competitor.

• Assortment compliance: Validating that the right product mix is present on the shelf according to the planogram.

• Share of shelf (SOS): In "Mom-and-Pop" stores, physical presence is often the only marketing a brand has.

• Promotion & price compliance: Ensuring that regional-specific pricing and promotions are actually accurate and active in rural or smaller cities.

Common challenges and how to fix them

Manual, spreadsheet-based processes lead to errors and delays. By automating shelf audits, your sales force can cover more ground and focus on high-value activities that drive incremental growth. With global retailers losing approximately $1.2 trillion annually due to out-of-stocks, Australian field teams must work smarter to reduce stockouts and increase brand share. Precision at the shelf is required to ensure every decision is backed by measurable results.

How TELUS Retail Execution helps strategy and optimisation

TELUS Retail Execution provides localised, step-by-step instructions that guide reps to take the optimal action in every situation. By using image recognition to capture real-time shelf data, our solution helps manufacturers identify urgent gaps and evaluate results instantly. Whether you are perfecting a planogram or managing direct store delivery (DSD), TELUS helps your entire commercial organisation work more efficiently to win at the point of purchase.

FAQ

• What is the difference between shelf strategy and shelf optimization? The difference between shelf strategy and shelf optimization is that shelf strategy is the long-term plan or blueprint for how products should be placed, while shelf optimization is the real-time tactical execution that uses data to remediate gaps in the moment.

• How does AI help with retail execution? AI helps with retail execution by automating shelf audits through image recognition and provides predictive ordering recommendations to prevent out-of-stocks based on store-level demand.

• Why is on-shelf availability (OSA) so critical? On-shelf availability is so critical because when a product is unavailable, shoppers often switch to a competitor, contributing to the global $1.2 trillion annual loss retailers face due to out-of-stocks. Improving OSA by just a small percentage can lead to significant revenue recovery.