  Shelf design decisions strongly influence product demand. In particular,
placing products in desirable locations increases demand. This primary effect
on shelf position is clear, but there is a secondary effect based on the
relative positioning of nearby products. Intuitively, products located next to
each other are more likely to be compared having positive and negative effects.
On the one hand, locations closer to relatively strong products will be
undesirable, as these strong products will draw demand from others -- an effect
that is stronger for those in close proximity. On the other hand, because
strong products tend to attract more traffic, locations closer to them elicit
high consumer attention by increased visibility. Modifying the GEV class of
models to allow demand to be moderated by competitors' proximity, these two
effects emerge naturally. We found that although the competition effect is
usually stronger, it is not always the dominating effect. Shelf displays can
achieve higher profits by exploiting the relative influence on competition from
shelf design to shift demand to higher profitability products. In the paper
towel category, we found profitability differences of up to 7\% and displays
with 3\% higher gross profits over the best shelf design present in our data.
