Decision support system development for store flyer space allocation: Leveraging own- and cross-category sales effects

Saeid Vafainia, Robert P. Rooderkerk, Els Breugelmans and Tammo H.A. Bijmolt

International Journal of Research in Marketing, 2025, vol. 42, issue 1, 113-132

Abstract: Print store flyers that feature retailer assortments remain a key retail marketing communication tool, making their space allocation among various product categories a vital decision. Academic research on store flyers has mostly taken a descriptive approach, focused on grocery settings where a large number of (often competing) categories are promoted, neglecting cross-category flyer space effects. We advance the literature by addressing how a non-grocery retailer can best allocate space in a showcase flyer intended to highlight the assortment of a few categories, with the aim of maximizing total store revenue. For this purpose, we have developed a dynamic Decision Support System (DSS) handling own- and cross-category flyer space effects on sales. Our DSS features two components: (1) a sales response model and (2) a store flyer space allocation tool that enlists a custom-built Large Neighborhood Search heuristic to solve the store flyer space allocation problem in less than a minute. Dynamics are captured using time-varying baseline estimates that yield optimal flyers to serve different seasons by limiting the level of overlap in subsequent flyers within the same season. In an empirical application for a furniture and home goods retailer, our optimization generates an overall average expected sales improvement of 13.0% versus this retailer’s actual flyers. By exploiting cross-category effects, store flyers become more thematic as they concentrate on one or two departments.

Keywords: Store flyer design; Space allocation optimization; Cross-category sales effects; Dynamic decision support systems; Non-grocery retailing; Showcase flyer (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:42:y:2025:i:1:p:113-132

DOI: 10.1016/j.ijresmar.2024.07.002

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