FEFO is the merchandising rule where the products expiring first are also the first to be sold. This technique is used to control the inventory of products in the store and is used especially when the retail chain sells products with a very small period of validity.
FEFO techniqueis useful in reducing loss because products that have a small shelf life will be sold first. The store thus avoids losses caused by the expiration of low-validity products.
Optimum inventory of products is very important for large chain stores. An expert team can help you manage your inventory by using the right technique for your shop type.
The FEFO technique ("first expired, first-out" – First expired, first-out) takes into account the lifetime of the products. Merchandising, sales, and logistics techniques are tailored to organize the distribution of products so as to reduce the losses resulting from product expiration
Other benefits of using the FEFO technique are to increase customer satisfaction (which will have fresh products on the shelf), increase quality and prevent unpleasant situations from analysis of products marketed in the store.
According to the FEFO rule, the products with the low expiration date are the first managed, regardless of the date of purchase or the date on which they were entered into the inventory system. The FEFO technique is versatile and easy to implement in the merchandising strategy, when is supervised by an expert.
Merchandising techniques used in the store can be adapted to facilitate the implementation of this rule for product sales. Horizontal or vertical arrangement on shelves can highlight the fresh products for which a faster sale is desired.
FEFO compared to other merchandising rules
Several inventory methods are available for the stores. Another strategy used frequently is FIFO (first in, first out) that does not take into account the expiration date but the order of placing in the warehouse/inventory system: The first product introduced will be the first to be sold.
These two techniques are similar, but the stores using the FIFO technique and selling products with the low expiration date risk entering a shipment with the expiration date higher than a shipment with the lower expiry date in the warehouse. In this case, there is a risk of losing the shipment with the lower expiry date because it will prioritize the first shipment with a higher expiry date.
Shops focusing on the quality and freshness of the marketed products will often implement the FEFO technique. Customer satisfaction is very important and more and more consumers want to have reliable information about the expiration date of the purchased products.
The FEFO inventory method is mainly used in the food industry, but it can also be used in the pharmaceutical industry, where the product expiration date is just as important.
So our merchandising expert team will urge you to use this technique to avoid staying with expired products on the shelves.
You can contact us for more details and specialised consulting.