Numerical holding in supermarkets is a fundamental sales indicator. Based on a comparison between the number of references present in the store and those included in the mandatory assortment, D.t.N. contributes to the analysis of your sales performance in supermarkets. The numerical holding can be higher than 100%, since it also takes into account picking.
Today, we're tackling this major issue for any manufacturer wishing to improve its sales results in supermarkets and hypermarkets.
The numerical holding (D.t.N.) is the ratio between the number of products present on the shelves of a supermarket and the number of products that should be there, in accordance with the mandatory assortment stipulated in the terms of the distribution contract.
This major retail indicator enables brands to measure the presence of their products at point-of-sale. This is the most important indicator to track in supermarkets. If your products aren't available on the shelf, they can't be sold to consumers. And if they aren't sold, you won't make any sales.
Digital ownership can be analyzed not only by product, but also by product category, product group (20/80, best-seller, innovation...), brand, store, chain, stratum and salesperson.
Shelf managers also use this term to express the ratio between the number of items on the shelf and the number of items on the shelf list, i.e., in the case of integrated distribution, the number of items listed in the central purchasing department's catalog.
It's important to distinguish between digital ownership and digital distribution, which are often confused. When a brand talks about holding rates, it may indicate one or the other. However, they don't calculate the same thing.
Numerical detention calculates the ratio between the number of products present and the number of products that need to be present. In simple terms, it lets you know whether your products are present in a store.
Digital distribution measures the number of active stores in a chain. In simple terms, it lets you know whether your points of sale are active. To work on these indicators (the famous DN & DV), read our article on digital ownership and ownership by value.
The confusion is so widespread that even Google brings up erroneous definitions in its search results. If you're lost, trust us, we're in the business!
The formula for determining numerical holdings is very simple: simply compare the number of products on a store's shelves with the number stipulated in the agreements, and the number of products in each stratum.
The key to calculating your numerical holding is the denominator. This denominator is none other than the assortment. But the assortment can vary according to the strata. So there's a risk in calculating it: if the sector manager, when visiting the store, takes his reading on the wrong assortment, your DN will be wrong.
As a reminder, strata are the number of items a store offers per product and per department.
Numerical hold = number of references on shelves / number of references in mandatory assortment.
It is generally expressed as a percentage.
If you find that your retailer's shelf offers 3 SKUs when the contract stipulates 4, your numerical holding is 75%. It can also happen that a distributor offers additional references, outside the obligatory assortment. This is known as 'picking'. This happens particularly when your brand is very successful in its store. So, when 5 references are present on the shelf versus the mandatory 4 in theory, your numerical holding for this outlet is... 125%!
So much for the calculation method.
But you still need to have the data... In reality, digital detention is one of the indicators that brands determine from the presence surveys carried out by sector managers.
So it's vital that your area managers not only master this key performance indicator, but also have a solid method for gathering strategic information from your partner sales outlets.
💡 Do you feel that your sales staff could improve their information gathering at the point of sale?
-> Take the time to make them aware of the 8 benefits of a good shelf survey.
One of the key issues in analyzing digital holdings is double layout, if your products are referenced in multi-ray. How can you link a store's holdings to several departments? To do this, create a multi-shelf statement, which will enable you to collect your information by department. The statement then calculates your share of shelf space and numerical holdings.
The calculation can also be tricky if you're in multi-strate. The answer is similar.
Digital detention is fundamental to analyzing your sales performance, as it allows you to see the gap - positive or negative - between what you've been able to negotiate in terms of digital presence (number of references the central office recommends its sales outlets to list) and what the sales outlets ultimately decide to offer for sale.
The logic of trade marketing leads you to consider that you and your distributors share a common objective: maximizing sales. So, whether your competitors have stepped up their strategy to conquer the shelves, or your distributor has disassociated himself from your commercial stakes, a numerical holding (D.t.N.) of less than 100% is a sign to be taken seriously. It's time to take care of the commercial relationship, talk to the department manager, identify the reasons that led to this situation, and find common ground to list as many products as possible.
It's also important to take into account the winding down of your agreements. Every year, your holding rate will change, depending on the new agreements you've negotiated. The aim is to get new products on the shelves as quickly as possible. Your sales force will therefore be working in the field (visiting stores) to achieve this objective. The product hold rate calculation will then be used to evaluate this work.
Our advice is to carry out a retroactive calculation to get as close to reality as possible. For example, you had 10 SKUs in a store in year n-1. You've managed to negotiate 10 additional references for year n. Congratulations, your assortment has increased from 10 to 20 products. The denominator therefore changes from 10 to 20. We advise you to take this into account when collecting and analyzing your data. If you had succeeded in maintaining an N.T.D. of 100%, i.e. all 10 items are present in n-1, you will then start year n with an N.T.D. of 50%. Your sales team's objective is to reach 100% again.
In this calculation, it's important to consider the absolute value, as the N.T.D. can drop while your number of references has increased. For example, you have succeeded in having 15 products present on an X chain. You therefore have a numerical holding of 75% (which is therefore lower than in n-1), even though you have increased the number of references on the shelf!
The use of forms adapted to supermarkets, with the help of a CRM designed for the field, proves decisive: by enabling business data to be collected at high speed from the shelves and in a structured way, you give yourself the means to objectively compare sales outlets with one another.
If, in addition, you have access to checkout data to assess sell-out, you have everything you need to convince your distributor to increase the number of your product references on its shelves, based on comprehensive reports highlighting all the performance factors between sell-in and sell-out.
To sum up, calculating your numerical holding allows you to :
Once you've determined your numerical holding, it's time to interpret it.
In fact, the results may conceal a number of different situations, and you may need to talk to the department manager or his or her hierarchy to get a precise understanding of the situation.
However, we can list the most common causes of a numerical holding of less than or greater than 100%.
By now, you're familiar with the challenges of digital detention, one of the most important indicators to track for a company selling in the indirect channel. You may have learned how to calculate and interpret it, and now have the tools to influence discussions with your distributors. Finally, your sector managers need to be made aware of the importance of structured data collection at points of sale.
And for everything else, there's Sidely!
