Transcript Smarter Retailing - Shelf Logic

The Case for a
Planogramming Pilot Project
Strategies & tools for merchandising
in a global marketplace.
Runtime= 20 min
Whether you are in charge of sales,
marketing or visual merchandising,
you need to try planogramming because:
• Planograms are the international
language of product presentation
and shelf space utilization.
• Retail shelf space is limited &
costly, so you must compete for
it.
• Shifting demographics require
customer-centric merchandising,
since no single planogram can
serve all markets.
• Product lifecycles are shortening,
so even successful planograms
need to change over time.
• Merchandising best practices are
changing.
Why are Merchandising
Best Practices Changing?
The Rise of Customer-Centric
Merchandising…
A Decade of Dramatic Changes
• In the past decade there have been dramatic shifts in
customer demographics that have reduced the
effectiveness of the traditional retail strategy of providing
a standard assortment and shelf layout across the entire
retail chain.
• Not only has there been an increased fragmentation in
consumer demographics due to changing ethnic
population mixes & relocation, but there is a developing
aging bubble due to the Baby Boomer generation.
• Additionally, the traditional boundaries between
marketing channels have been blurring, resulting in
increased competition and further pressure on margins.
Shifting Best Practices
This combination of shifting demographics and
changing industry dynamics is precipitating a
shift in the thinking on merchandising best
practices. The optimal response seems to be to
tailor the product assortment & display at a store
to reflect the consumer preferences of the local
buying populace.
Merchandising at the store level is a significant
departure from current retail practices which
tend to use a generic assortment and space plan
for the whole retail chain or a geographic region.
Current Retail Conditions
• Retail shelf space is limited & expensive.
• Retail market demographics are increasingly
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fragmented & aging.
Product lifecycles are shortening.
Offshore sourcing is constraining prices.
Major retailers are constraining margins.
Developing or maintaining brand loyalty is
becoming more challenging.
Visual Merchandising is regaining importance,
especially within Category Management &
Customer-Centric Merchandising models, in
order to acquire effective product positioning.
Customer-Centric Merchandising
To maintain profit levels, retailers are either
adopting a value strategy where they sacrifice
the breadth & depth of assortment for better
pricing or using a service strategy where the
attraction for customers is better product
offerings & add-on services.
Both of these strategies rely on an intimate
knowledge of customer-centric merchandising.
Tools for Customer-Centric Merchandising
• Planogramming, Space Management & Visual
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Merchandising: design your product & category
displays to optimize space utilization & GMROII
and analyze their effectiveness over time.
Category & Lifecycle Management: strategically
manage all your product categories, category
roles, and product assortments over their
forecasted lifecycle.
Business Intelligence: use BI to mine your data
warehouse for actionable information and alert
you to developing exceptions.
Whether you are a retailer,
distributor or manufacturer:
YOU NEED THE RIGHT TOOLS
TO PLAN & ANALYZE YOUR
VISUAL MERCHANDISING
AND SPACE MANAGEMENT
Visual Merchandising & Space Management
• Visual Merchandising is
the art & science of
presenting products in an
aesthetic manner to
increase consumer
appeal.
• Space Management is the
discipline of maximizing
the efficient use of retail
shelf space.
Both strategies benefit from the creative use of Planogram software.
Planogramming for
Visual Merchandising Support
Visual Aesthetics,
Effective Assortments,
On-Site Fixture Setup,
Planogram Compliance
Planogramming Your Displays
• Planogram software, like Shelf Logic, makes it quick &
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easy to drag & drop products onto a display fixture to
create a POG (Plan-O-Gram) design.
An Image POG allows you to view the aesthetics and
emphasis of your design.
A Schematic POG shows stock clerks how to implement
your design in the field.
An Analysis POG maps your performance metrics back
onto your design for assessing results.
Standard Reports analyze space utilization, expected
financial performance, actual sales results, and rank
products accordingly for decision support.
Shelf Logic – Easy Drag & Drop
The following is a demonstration of
dragging & dropping inventory items
onto a new planogram, as taught in our
user training system…
Shelf Logic – Easy Drag & Drop
Image POG
An Image POG shows
shelf & peghook items
exactly how they will
look when placed on
your display fixture.
Use an Image POG to
verify display aesthetics,
product positioning,
assortment planning,
and other visual issues.
Schematic POG
A Schematic POG shows
shelf & peghook items
exactly how they will be
placed on your display
fixture by UPC Code.
Use a Schematic POG to
assist floor managers &
stock clerks with
accurately placing
products on your display
– including performing
inventory resets.
Analysis POG
An Analysis POG shows
items in place on your
display fixture and colorcoded by relative value
for a user-selected
parameter.
Use an Analysis POG to
assist floor managers &
stock clerks by showing
them key performance
indicators or other
metrics overlayed on the
products in the display.
Planogramming for
Space Management Support
Shelf Space Analysis,
Financial Performance Planning,
and Sales Analysis per Cubic Foot.
A Space Analysis Report
To help you manage every square inch of precious retail shelf space.
A Financial Analysis Report
To plan for the anticipated financial performance of each category.
Sales Analysis by Return per CubicFt
To see which products are efficient performers & which are hogging space.
Fast Sales Data Entry/Import
 Quickly enter your PTD Sales
and analyze your POG’s actual
performance.
 Or, import your Sales data
from an Excel spreadsheet.
 Set the number of ranking
levels for grading results.
 Reset Sales data for the next
period’s analysis.
Planogramming for
Merchandising Strategy Support
Product Lifecycle Management,
Category Management:
Category Roles/Product Strategic Roles,
Merchandising Tactics
Product Lifecycle & Category Management
• Product Lifecycle & Category Management are
intimately linked functions.
• How to market the products in a particular
category is highly dependent upon where those
products are in their individual lifecycles and
how consumers perceive their relative value.
• Determining where products are in their lifecycle
requires skillful analysis of historical sales data &
careful classification.
Product Lifecycle Management
• All products go
through a
predictable lifecycle.
• The key to
maximizing profits is
to know where each
product is in its
cycle, and market it
accordingly.
Category Management
• Category Management is the process of
managing categories as strategic business units,
producing enhanced business results by focusing
on demand-driven merchandising tactics.
• The art & science of determining which specific
brands & assortments of retail products you will
be offering to your target customers in each
category of merchandise.
• The art & science of determining how to display,
group & price the products in a category in order
to optimize the contribution of the entire
category to all of your store’s objectives.
Category Roles
Every broad category of
products that you market
plays a role in your business
plan based on the category’s
perceived value to your
customers.
By assigning roles to these
different categories, you can
consciously place them on
your fixture displays where
they can contribute best to
the overall financial
performance of the entire
store.
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Destination Driver
Staple
Niche
Occasional/Seasonal
Fill-In
Niche: a small
to medium
size category
Destination
Driver:
a large
Occasional/Seasonal:
an
Fill-In:
category
purchased
that
drives
a
targeted
segment
of store
Staple:
aa frequently
purchased
category
that
impacts
the
business
occasionally/seasonally
purchased
betweentofor
shopping
visits
to other
shoppers
shop
at to
the
store,
i.e. a
category
almost
allshop
shoppers.
and
drives
shoppers
at the
category.
retail outlets.
destination
category for targeted
store.
consumers.
Product Strategic Roles
In every broad category of
products that you market,
there are individual items
that can play different
strategic roles because they
are in different stages of
their product life cycle.
By assigning strategic roles
to these different items, you
can consciously place them
on your fixture displays
where they can contribute
best to the overall financial
performance of the entire
category.
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Traffic-Builder
Profit-Generator
Transaction-Builder
Image-Enhancer
Cashflow-Generator
Transaction-Builder:
increases
Traffic-Builder:
Image-Enhancer:
Cashflow-Generator:
draws
conveys
consumer
enhances
positive
traffic,
working
Profit-Generator:
produces
significant
transaction
size,
builds incremental
encourages
store
capital
image
position.
high
to consumer
consumption
and and
creates
profit
dollars.
sales
andexitement.
provides strong impulse
increases
in-store
volume.
potential.
Merchandising Tactics
• Pricing: premium, competitive, low price or
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loss-leader
Promotion: frequency, event, scope and
cross-merchandising
Assortment: broad, moderate or best-sellers
Merchandising: location, POP and space
allocation
Supply Chain: product sourcing and processing
costs
The Benefits of Planogramming
Your Categories, Roles & Tactics
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Improved sales presentations & closure results.
Improved retail placements & product positioning.
Increased consumer appeal of product displays.
Better brand awareness thru consistent emphasis.
Improved efficiency of shelf space allocations.
Improved financial performance of assortments.
Better packaging testing thru tighter controls.
Faster, more accurate replenishments.
Quicker inventory resets.
Better grasp of relative product performance.
Much better marketing thru targeted displays.
Improved awareness of visual merchandising.
But don't take our word on it.
Here is a study by the National Association for Retail
Merchandising Services (NARMS) entitled "Increase Sales
By Improving Planogram Execution". It quantifies the
same-store sales improvements that can be realized
when well-designed planograms are quickly & reliably
executed in the field. The article concludes with "the
ability to take things learned from high-performing stores
and provide them to lower-performing stores, further
accelerating the benefits of consistent planogram
execution."
Why choose Shelf Logic?
• Shelf Logic is the value leader in dedicated planogram software. Our
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software sells for between $479 and $1,000, depending upon the
version you require.
Shelf Logic is very simple to use because it is focused on
planogramming, not a whole lot of other things.
We provide free lifetime tech support.
If you purchase our online training system for $300, you can
download it to CD and use it to train all of your users. View each
lesson as many times as necessary, until you have mastered our
software.
Because we use the MS-Access database for product data, your item
database is easy to access & interact with from other applications.
We just celebrated our 10th anniversary, so you know we will be
here to support you if you need us.
Our Master Edition is in Release 14, our Custom Report Writer is in
beta testing, and we are developing additional add-on modules to
our mature planogram software packages.
Continuous Innovation!
How to Get Started?
Look for the best short-term ROI
and the most manageable
pilot project.
Planning Project Scope & Goals
• Identify a product line or category that sorely needs
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improvement and prepare product measurements &
product digital images.
Select a salesperson & a display designer to work
together on the first planograms.
Provide your team with visual merchandising, space &
category management, and floor planning study
materials.
Obtain relevant market research & in-house sales data
to understand consumer behavior in your target market.
Perform a SWOT analysis for chosen market & products.
Develop pilot project plan & merchandising strategy.
Set realistic & measurable goals for success.
Acquire & Learn New Tools
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Purchase Shelf Logic Planogram Software.
Install Software on Computer.
Download & Review User Training System.
Practice Using the Software to Create Planograms.
Create or Purchase Product Images & Measurements.
Enter or Import Product Info into Shelf Logic Database.
Define Your Display Fixture Parameters.
Create Your First Planogram.
Deploy Planogram in Your Retail Space.
Monitor Sales Results & Customer Response.
Make Any Needed Changes to Planogram & Re-Deploy.
Review Pilot Project Results
Plan Wider Deployment
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Expand project scope
Identify market gaps
Select additional users
Purchase more licenses
Train new users
Set new goals
Provide market data
Develop new planograms
Deploy new planograms
Measure results
Follow Up Improvements
• Consider installing Business Intelligence (BI) software to
track sales campaign performance, monitor KPI’s
(Key Performance Indicators), and receive automatic
exception alerts.
• Improve your team’s category management, pricing &
promotion, and visual merchandising skills through
specialized training & state-of-the-art software tools.
• Investigate other innovative retail technologies that might
improve your customer-driven merchandising strategies.
Ask your trusted retail technology consultants for advice.
Resources
• “Everything You Always Wanted to Know About Planograms – But Were
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Afraid to Ask”, ACNielson, 2005
“Display & Merchandising Guide”, George Little Management, 2005
“Space Planning: The Next Generation”, ISR, 2002
“Space Management Benefits”, Martec Intl., 2005
"Increase Sales By Improving Planogram Execution“, NARMS, 2005
“Category Management – Positioning Your Organization to Win”, Nielsen
Marketing Research, 1992
“Solving Problems and Building Profits: The Benefits of Category
Management”, NACS, 1998
“The NACS Category Management Guidebook”, NACS, 1998
“Building a Category Management Capability”, UPS, 2005
“What’s in Store For Smart Retailers”, Lori Schafer, 2005
“The Art & Science of Customer-Driven Merchandising”
by Rahul Tyagi, Retail & CPG Practice, Infosys Technologies, 2006
“Consumer-Centric Category Management : How to Increase Profits by
Managing Categories based on Consumer Needs”, ACNielsen, 2005
“The Product Life Cycle”, QuickMBA, 2005
“Product Life Cycle Management”, Wikipedia, 2005
Presented by:
The Value Leader in Dedicated Planogramming Software
Contact Us at:
Shelf Logic Software Products
65 Lake Shore Drive East
Rock Hill, NY 12775
Tel: 1-888-697-4353 or 1-845-796-4242
Fax: 845-796-4777
Email: [email protected]
Url: www.shelflogic.com