SUM
A planogram is a crucial tool for retailers, suppliers, and shoppers to create a balanced shelf layout. It is shaped by financial and shopper insights, purchasing decision trees, product lists, market share data, and business strategies. However, business realities can compromise the planogram's effectiveness. These include ongoing product launches, changing commercial policies, time constraints, and software costs. Retailers may not have the time or resources to update planograms, leading to missed opportunities or shelves not aligned with market trends. Commercial policies may also impact the final planogram, and the time investment can be costly. Software costs also play a role, but the focus should be on delivering accurate, insightful planograms. A category and space management professional can help navigate these challenges and turn everyday challenges into opportunities, ensuring that each planogram brings added value to the business. Investing in space and category management can lead to significant returns, saving time, increasing profitability, and keeping customers happy.
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Full Article:
Let’s begin by considering the shelf—the first point of sale where the expectations of retailers, suppliers, and shoppers all come together. Retailers seek a profitable shelf that stays stocked. Suppliers aim to showcase their full product portfolio to maximize visibility and sales. Shoppers want to easily find the products that meet their needs.
To achieve this balance, a planogram (the shelf’s “X-ray”) is essential. It is shaped by financial and shopper insights, purchasing decision trees, product lists, market share data, and business strategies, alongside specific fixture measurements. Together, these elements form the “dimensions” of the final shelf layout. A category and space manager must carefully evaluate and balance these parameters before introducing and implementing a planogram.
The Realities That Affect Planogram Effectiveness
In practice, business realities often compromise the planogram’s potential, diminishing the effectiveness of what would otherwise be an optimized shelf layout.
1. Ongoing Product Launches: Manufacturers frequently introduce new products, but retailers may not have the time or resources to continually update planograms to account for these changes. This can lead to missed opportunities or shelves that aren’t fully aligned with the latest market trends.
2. Commercial Policies: Retailer-supplier agreements can also impact the final planogram. Shifting commercial priorities may lead to adjustments that disrupt the balance and harmony of the shelf’s design.
3. Cost and Time Constraints: Developing a comprehensive planogram takes time—typically 4-6 weeks for initial drafts and revisions. In a more complex scenario, it could take several months. These delays can undermine the planogram’s relevance, as shelves are dynamic and need to reflect seasonal trends, economic shifts, or new product launches. The time investment can be costly, and businesses may opt for quicker, simpler versions, reducing the planogram’s potential impact.
4. Software Costs: Another factor is the budget required for planogram creation. With various software options available today, the choice depends on the business’s specific needs. While software plays a crucial role, the focus should remain on delivering accurate, insightful planograms, not just relying on the tools alone.
The Vital Role of Planograms for All Parties Involved
Despite these challenges, well-designed planograms are crucial for retailers, suppliers, and shoppers alike. A good planogram aligns the expectations of all stakeholders, creating a balanced and strategic shelf layout that maximizes profit, reduces stockouts, and enhances the shopping experience.
A category and space management professional is key to navigating these challenges. They understand the complexities of planogram creation and can help overcome the barriers caused by time constraints, shifting priorities, and changing market dynamics. With the right expertise, they can turn everyday business challenges into opportunities, ensuring that each planogram brings added value to the business.
Conclusion: Invest in Space and Category Management
In the end, giving proper attention to space and category management can lead to significant returns. It will save time, increase profitability, and, most importantly, keep customers happy. By investing in the strategic planning of shelf layouts, businesses can ensure that their planograms are not only functional but also a powerful tool for growth.
18.10.24 | S.Rodopoulou
Space and category management consultant
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