3 Proven Methods to Fix Poor Planogram August 31, 2016,
3 Fast Fixes for Your Planogram
Most elementary tool in your merchandising arsenal is your planogram. This not only dictates the layout of your store, but the layout of your merchandise within the individual areas of your store. Some managers will focus on planogram compliance rather than admit that the problem is the planogram itself. Instead of measuring compliance, retailers need to solve compliance problems. Let’s look at three ways for store operators to fix planogram problems fast.
Admit There’s a Problem
The first step to fixing the problem, is admitting that there is one. The second step is acknowledging that there are problems that originate outside of your ability to fix them. In many cases faults in the planogram are due to problems with your suppliers. Whether it is a shortfall, an out of stock item, or late delivery, these gaps in your planogram have an effect on your customers. The most vital part of solving your planogram problems, and ascertaining their origin is to deploy retail merchandising software to keep track of your supply chain’s incoming orders, outgoing sales, and getting a grip on your inventory.
The goal of inventory control is to maintain a sustainable presence of the items in question on your shelves, planogram compliance in such a way that back inventory does not consume inordinate staff hours in servicing and maintaining it. In other words, you need to send your people into the stock room, and out onto the floor with mobile merchandising software in hand, and use the resulting data to find your sustainable point. However, until that point you still need to fix that planogram.
Here are three ways to make your shelves work.
- Set the bar high.
Create plenty of space in premium spots for your best performers, and ruthlessly cull your underperforming or consistently out of stock items. Space is a precious resource and you need to make sure that you highlight the very best.
- Take time to watch the foot traffic to your store, and find out what areas are not getting the attention they need.
Planning a full store reset needs to take a backseat to promoting your best performers. Create individual floor area planograms with flow areas between them and give them time to work. Constantly rearranging the store ends up being frustrating for customers, in addition to being frustrating and labor-intensive for your staff.
- Work with your vendors and staff to find out what products are selling, and available on a consistent 100 percent basis.
Give these products your attention, and also spotlight newer finds in special areas around the store. Be a little understanding if the customers seem irate at losing old favorites due to your reset, but simply explain that the items were not readily available any longer. This also gives you the opportunity to introduce them to something they might like better.
Because no article would be complete without that subheader, let’s take a look at the very real damage that a lack of inventory can do to a business. In the simplest terms, unsold inventory eats money.
- In 2013, the Hackett Group released a report stating that publicly held companies had more than $1 trillion tied up in inventory, accounts receivable and payable.
- In 2015, Supply Chain Digest reported that retailers held $1.43 in inventory for every dollar in sales as businesses increased the number of SKUs in inventory to meet future demands. This is a very mixed blessing. On the one hand you have more products to showcase, but less space to show them in, necessitating more storage for stock.
- The number of warehouses in use increased, and in a report by Colliers so did the price per square foot. Vacancies tumbled to a mere 6.8 percent in the fourth quarter of 2014. Depending on location prices for warehouse space can go as high as seven dollars per square foot.
With warehousing in demand, and a need for “long tail” inventory, the value of mobile retail merchandising software to store owners and operators of all sizes is readily apparent. Getting a grip on inventory costs and movement is a vital component of increasing profits and cutting waste. Inventory, as previously stated, eats money even when it is just sitting there. It costs money every month to house it, maintain it, service it, count it, and even to write it off when it is too shopworn or past expiration to sell. In other words, inventory unmanaged is waste.
Take your first steps and closely review the areas in your operation that need immediate attention. Getting the correct software and hardware solutions in place in time to save you from these losses and expenses should be one of the very first things on your fix-it list. Connecting with a software provider is the first step to taking firm control of your inventory, and making those planogram fixes permanent.