How to work with planograms in war conditions?
The hostilities in the country pose unprecedented challenges to business and retail. Disruption of supply chains, migration, changing priorities among the population, and other factors provoke a change in working conditions and changes in demand, for which retail chains were not ready. As a result, centralized management of shelf space often fades into the background, and this is also reflected in the availability of assortment directly in the store. How to work with planograms in a war, when for many networks it remains a top priority to keep the shelf full? Let's figure it out.
The planogram must continue to work for the business
In the current conditions, there is a possibility of unstable supplies for each specific product. At any time, the supplier's stock of goods may suddenly be depleted. But even in such circumstances, retailers must ensure proper shelf stock and understand what shelf space they can work.
Investing in a product that will not fit on the shelf and then be unclaimed in the warehouse has always been an unaffordable luxury, and in modern times it is simply unacceptable. That is, the conditions have become tougher, but the retailer's space for products remains the same, and it needs to be used as efficiently as possible so as not to miss out on possible profits.
Work with planograms should go in conjunction with the management of the assortment matrix, which will allow:
- organize work with shelf space so that it is used as efficiently as possible, based on the existing assortment;
- to calculate the quantity of the required goods, taking into account the capacity of the shelf when ordering.
The planogram provides an understanding of how much retail space can be used in the store, and based on this, it is possible to accurately estimate how many goods should be delivered.
Learn more about planograms and solutions for category management from our consultants: write to the mail [email protected] or fill out the form on the website.
Adapting the process of working with planograms to crisis conditions
In wartime, it is impossible to comply with the planogram at 100%. The supply of any product can be disrupted due to the disruption of logistics routes and the physical destruction of distribution centers. As a result, the retailer needs to solve the problem of how to meet the needs of its customers and increase the turnover of funds and the profit of the network. Two main areas of work with planograms help with this:
- Using UoN (short for units of needs). In his work, the merchandiser analyzes the change in demand in the category. For example, in the category "milk" there is a demand for milk of 1 liter with a fat content of 2.5% in soft packaging/plastic bags. But there is no certainty from which supplier such milk will be supplied specifically tomorrow, therefore, a place should be reserved on the planogram for the need. From the analysis of the assortment, the specialist can determine what size of shelf space should be allocated for such a product to cover this need.
- Allocation of shelf space for one-time purchase items. Increasingly, networks can see SKUs that can only be sold once. These may be goods with a profitable offer from a supplier or promotions of any products. And the demand for the implementation of business processes for such in-out proposals is growing. Changing the planogram for such changes in the assortment is labor-intensive. The solution may be to book a place on the shelf for the sale of one-time purchase goods. The category manager calculates the % of shelf space for each category where the use of in-out products is relevant. In fact, the planogram is allocated a part for "unstable" goods, the rotation of which does not require changing the planogram and does not affect the display of goods outside this block.
Working with planograms allows the network to fix a place for the actual needs of store visitors, taking into account the basic ones, and most importantly, it allows you to understand how much product needs to be supported in stores.
We invite you to check the business processes of category management: download the MCM checklist and see where and what can be improved.
Manage the filling of the shelf!
Working with planograms is an important element of the supply chain, the importance of which should not be neglected due to the unstable assortment. Because the:
- Using UoN in a planogram expands the category manager's ability to replenish the necessary goods by purchasing from those suppliers who have them in stock, while not going beyond the physical shelves in the store.
- A fixed place on the shelf for one-time purchase goods gives the category manager an understanding of the possible volumes of orders for in-out goods.
- In conditions of limited labor resources in retail outlets, working with planograms simplifies the implementation of the arrangement of goods. The planogram is essentially a clear instruction that reduces the time for making decisions about the placement of a particular product for store employees.
Wartime does not affect the fact that an accurate understanding of shelf space in the formation of the assortment helps to avoid overstocking the store and freezing the company's funds.
All questions about C4R solutions for category management and business process automation in the company, ask our consultants: write to [email protected] or fill out the form below. We'll be happy to call you back.
Authors of the article Igor Fedoryuk, Head of Space & Assortment Management
and Polina Leonenko, MCM Consultant at Consulting for Retail
