Essentials of successful category management and planogram creation
Is it worth devoting time to planogram creation and category management? Will stores comply with the planograms? How to make planograms benefit all parties? Such questions need to be answered when deciding whether and how planograms will be used.
It is important to set up processes in order to make planograms facilitate the work for all parties involved.
It will help stores to easily identify what changes need to be made and where. It is essential that planograms are accurate, taking into account the dimensions of the products and the space available in a particular store. In such a case, it is not necessary to deal with situations where it is not possible to display the goods according to the planogram, as there is not enough space for it. It is also important to reserve the appropriate capacity for individual products according to sales in such a way that there are no frequent out-of-stocks which would the staff have to replenish from the temporary warehouse several times a day.
It is essential for the headquarters to have the entire process under control and to reliably manage the display of goods in all stores. Planograms can be retrospectively evaluated and they allow a quick response if the implementation does not work as intended. If we can rely on the accuracy of the implementation, compliance with the agreed conditions will be significantly facilitated. In addition, it will smooth the cooperation between retailers and their suppliers.
What are the essentials of a successful process of category management and planogram creation?
You need to constantly communicate with stores and explain the benefits at the very beginning. If you explain the changes in the assortment and in the implementation to the store staff, they will understand why these changes are useful. Hence, the stuff will be more motivated to follow the implementation according to the planograms. A great tool for these purposes is Quant Blog.
Not everything at the very beginning can be set up without errors; therefore, it is important that stores can easily report problems and inaccuracies, both in terms of product dimensions and exhibition areas, such as product unavailability. Quant thus includes integrated task management and online chat.
A picture is worth a thousand words, so it is an invaluable assistant for communication between the headquarters and stores, the opportunity to attach not only annotated photos of the implementation of planograms, but also the general situation in the store.
In order to use planograms to improve the functioning of successive processes such as automatic orders, reporting or price tag printing, it is necessary to put in place control mechanisms to ensure that the plan becomes a reality and the implementation of products in stores matches the planograms.
Automatic notifications in case of non-compliance with deadlines should be a matter of course.
Confirming the implementation of planograms, including photo documentation, increases the motivation of stores to show that they do quality work and it also allows inspection without physical visits in the stores. Thanks to artificial intelligence, it is even possible to automate the evaluation of the conformity of the implementation photo with the planogram. Some reports also serve as good control mechanisms. For example, report of the goods being out of stock in planograms. If the stock of the product in the store is zero, the planogram containing this product cannot logically be implemented at the given moment.
3. Automatic orders
Planograms are a great enrichment for order automation. By creating and managing planograms, you define the minimum supply required to prevent empty spaces on the shelves. Usually this figure is equal to the number of packages of the product next to each other on planograms. However, you also define the total capacity of the product in the sales area which enables the algorithm to minimize the number of necessary replenishments from the temporary warehouse. If the store does not have warehouses at all, then you use the planogram to define the maximum that will fit in the given store.
The publication of the planogram in advance and clearly stated implementation dates permit the algorithm of automatic orders to ensure the availability of new goods at the moment of the planogram implementation and the timely sale of eliminated goods. When a product will be removed from the planogram, nobody wants its quantity to be automatically replenished to the maximum by an automatic order the day before removal.
4. Return minimization
The topic of returns is closely related to automatic orders and planograms. When introducing new products, it is logically necessary to exclude other products from display. But when is the right time to issue a planogram with a novelty so that the discarded product has the smallest possible return? Quant can solve this problem very effectively thanks to the unique function of automatic replacements. The principle is actually very simple. The original product remains in the planogram and the new product is set as its replacement. Quant subsequently checks the stock levels at each store every day. If the stock of the original product falls below the selected limit, Quant automatically publishes a new planogram with a refund for that store only.
If necessary, it is possible to let Quant select replacements automatically so that it selects the most similar product possible from the available unexposed products and it updates the planogram.