The yield of a product in large-scale retailing
In retail distribution, the position of a product on a shelf will influence the yield. Retailers and manufacturers are already aware of the importance of managing each category as a strategic business unit, adopting effective Category Management strategies.
Planogram systems are included in this scenario, tools that allow the optimization of space management based on the available assortment, simplifying the process of purchasing of the consumer in order to increase profits of retailers and manufacturers.
What is a planogram for?
A planogram is the virtual representation of the availability and number of references to a shelf within a store aisle and allows the shopper, engaged in the purchase of a product, a more intuitive reading of the shelf. For both distributors and manufacturers, it is important to have an assortment that reflects the needs of the consumer, which allows him/her to easily find what they need in the store, preventing it from falling into spinning “sensations of confusion”. A planogram is, therefore, practical on the side of demand, for shoppers who want simplicity when searching retail products, as well as on the side of supply, for operators who are able to obtain a sizeable increase in revenues, thanks to the better organizing of exhibition space.
Features of a planogram software
The use of a planogram software will allow the display reproduction of any applicable logic of micro-merchandising.
An indispensable condition for the elaboration of a planogram consists in having a software that allows: the optimization of shelf space management; the segmentation of the assortment of products in order to make it simple to apply the instructions from the decision-making tree structured for each product category; the highlighting of possible conditions of over/under storage; the creation or modification of references present in the target market, replicating real images and dimensions; identification of better performing references and the accurate replica of each specificity of the shelf structure. For the realization of a planogram, it is necessary to benefit from a package of skills which includes the knowledge of the software as well as of the category that is the object of the planogram. The market offers various types of solutions, several are free but strongly limited in functionality and other products manufactured by industry leaders such as IRI, JDA, and Nielsen who, for the marketing of their software in Italy, specifically turn to agencies specialized in the analysis and optimization of Category processes.
JDA Space Planning
JDA Space Planning allows retailers and manufacturers virtual elaborations of any planogram proposals, according to the logic related to Space & Category Management processes. Managing similar aspects through a software allows to directly translate theoretical logic imposed for each product category in the actual configuration of the shelf, contemplating all the specific structural constraints per sales point. It is possible, in fact, to reconstruct different type structures, composed only of shelves or rows of hooks, pegboards or baskets.
Through a primary key (corresponding to an EAN code of every SKU, in almost all cases), it is possible to prepare the master data of a product for each reference, within which it is possible to enter the sizes expressed in width, height and depth, the number of pieces and the optimal amount of pieces per carton, the brand and the manufacturer of each single product in the assortment. With this information one can add the product category and subcategory and additional specifications which can be inserted in the numerous descriptive fields. It is, therefore, information on the references of qualitative nature as well as quantitative, generally provided by the manufacturer and essential for the elaboration of an effective proposal.
Therefore, through the creation of a master planogram, easily customized according to the characteristics of each sales point, distributors can better manage the references present in the assortments of the different channels of their stores, while the manufacturers can exploit Space Planning for analyzing what could be the best possible positioning for the SKUs of their brands, in order to take in any impulse purchases.
Compared to other solutions present on the market, the JDA Software offers a multi-planogram service, which allows for the managing of several planograms within the same project. This allows for a more rapid and efficient management of the database of products, the loading of sales data, and the integration of useful information in the description fields. In fact, through a single operation, it is possible to carry out appropriate modifications and avoid, as necessary with other software, repeating the same action for each planogram.
Considering that information is commonly repeated in all planograms, this functionality of Space Planning is almost indispensable for the development of cluster planograms for the various signboard channels. Among its many features, there is a practical reporting system which allows the comparison of various types of tables for both multiple planograms and multiple projects, in order to highlight the most useful data such as shelf share of various brands or the weight of the sub-segments within each planogram in relation to the total of the product category.
The adoption of the JDA solution is a winner for retailers as well as for all the categories of manufacturers, including the small and medium-sized, who are interested in exploiting the logics of micro-merchandising for sales or are eager to pre-emptively analyze the effect, in terms of shelf share, which would produce a change in the dimensions of the packaging of a particular reference.
Planogram services represent, therefore, a tool which a company engaged in Category Management processes, simply cannot do without. The faster speed and efficiency in micro-merchandising processes, guaranteed by these services, is a competitive factor of great value. The benefits of adopting a planogram system are numerous and to deprive oneself by not keeping up to pace with innovation or to struggle to understand the changes of the market conditions, could cause a gap that may be difficult to fill among leading and pro-active companies in relation to the new input supplied from the market, and the pursuing companies.