Planogram Implementation: Overcoming Challenges for Retail Success
In the article “Planogram: Understanding, Importance, and Advantages”, we talked about why retailers and suppliers need product display planograms, and what benefits their use brings to a business. But in practice, it sometimes happens that a perfectly drawn planogram remains just a beautiful picture. Why is this happening? And why don’t companies use the full potential of the opportunities that planograms give them? What difficulties do retailers face when implementing planograms in a store, and what are the ways to solve them? Read more!
What to do with the drawn planogram
So, you have created a planogram. And a completely natural question arises: what to do with it next? How to work with a planogram and how to put this ideal layout into practice? And at this stage, some companies face certain organizational difficulties.
As a rule, in the centralized planogram, quite a lot of attention is paid to drawing planograms and training office workers to work with them. But when the planogram implementation process moves to the store level, not everyone understands how to organize it correctly.
The first step is to train the sales staff. In the process of training, it is necessary to familiarize employees with the appearance of the planogram, explain what it consists of, how to read it correctly and how to work with it.
This task can be quite time consuming if the company does not have a centralized training process for personnel (for example, a separate department responsible for training processes, working with new software, etc.).
What can be done to streamline and simplify this task? First of all, the AC needs to draw up detailed instructions for working with planograms (hereinafter referred to as the Instructions). This can be done on the basis of certain templates, taking into account the internal procedural requirements of the company itself.
When compiling a template, you should first communicate with the store administrator or director and clarify what information they need in order to successfully work with planograms. In particular, the Instruction must necessarily contain the time allotted for the employee to implement the new planogram.
The CO should clearly define this period, include it in the Instruction and transfer it to the point of sale, the management of which should familiarize the employees responsible for the implementation of planograms with it.
Staff training can take place both offline and online. At the same time, employees responsible for the implementation of planograms must understand that compliance with the planogram for the categories for which they are created should be 100%. Our company distinguishes itself through tailor-made implementations, addressing challenges encountered on the journey to retail success.
Unfortunately, in practice, the training process often covers only employees of pilot stores, that is, those who are testing a new process for working with planograms. And the employees of other retail outlets of the network do not have a clear understanding of how to work with the planogram correctly.
If for some reason it is physically impossible to carry out the layout according to the planogram, this is an error, which must be reported to the CO. And it is the CO that should make all the key decisions on working with the planogram. The store should not make any independent decisions, in particular on how to eliminate the discrepancy between the actual display and the planogram, since this will complicate the assessment of the effectiveness of work with the planogram.
As soon as the store has implemented planograms, it must report to the office on the readiness of such implementation.
All the necessary functionality for communicating the store with the central office is in the solution for publishing planograms, including robust IT solutions for seamless communication and reporting.
4 Planogramming Problems You Shouldn’t Ignore
Let’s consider the most common problems that arise in the process of planogramming, and possible ways to eliminate them.
- Equipment mismatch
In practice, situations often arise when the number of shelves shown on the planogram does not correspond to the actual number of shelves allocated for a certain category of goods in the store. Or the length of the rack on the planogram does not match the actual length of the rack in the outlet. In this case, the store should never try to solve the problem on its own: adjust the equipment or product placement at its discretion. The task of the point of sale administration is to promptly, within the time limits stipulated by the Instructions for working with planograms, notify the central heating center of a problem that has arisen. Further decisions, in particular the decision on the advisability of changing the planogram, should be made by the central office.
- Errors in measurements of goods
If the measurements of the product are made incorrectly, despite the ideal placement on the planogram, it may not fit on the shelf at the point of sale, or vice versa, there may be empty space on the shelf. Using the logistic dimensions of the product when drawing a planogram, you can miss so much that the shelf can actually fit 1-2 more new SKUs or 1-2 faces of existing SKUs.
To eliminate this problem, as in the previous case, the outlet needs to issue a request with a detailed description of the situation at the Central Office in accordance with the Instructions. It is best to support such a request with a photo report, since, based on the practice of C4R specialists, about 30% of such cases are associated with the inattention of an employee who exhibited goods according to the planogram. A high-quality photo report enables the CO employee to visually verify the photo and planogram, and often makes it easier to fix the problem.
Since the human factor is often the cause of this problem, we recommend that you double-check yourself before contacting the CO. Perhaps the solution to the problem lies on the surface.
After receiving the updated planograms, the store needs to make the appropriate adjustments and report back to the CO whether the problem was resolved or not.
In order to optimize the communication of the store with the CO, the Instructions must clearly spell out the rules for this communication. In particular, it is necessary to define a specific time limit for the CO to consider the application for the existence of a problem, feedback, or resolution of this problem.
This communication is important as it is the first step in planogram auditing. Once a store has declared that it has complied with all office requirements, it must be ready for a product arrangement audit by the central office.
Such a check should not be scheduled. Its suddenness gives an objective opportunity to assess the compliance of the planogram with the presented calculation. At the same time, staff must remember that setting planograms once is only half the battle. On average, planograms are relevant for 2 to 4 weeks. And all this time, when replenishing the inventory, it is necessary to keep the shelf up to date according to the planograms.
- There is a product on the planogram, but not in the store
This problem should also be reported to the CO, who, in turn, should investigate the situation and provide an answer when the corresponding product becomes available, or change the planogram and send its updated version to the point of sale if replenishment is not planned.
But what to do with the resulting empty space while the store is waiting for a response from the CO? There are several options.
The simplest is to leave the space empty until a new planogram or product arrives. But so that the shelf does not repel customers with gaping holes, you can choose a different path. One of the options is to leave an empty space equal to the price tag under the product, leave the price tag, and “tighten” the remaining free space with the product located on the right. But choosing this option, the retail outlet staff must carefully monitor the position of the price tags on the shelf. The price tag should not “walk” on the shelf, but should always be under the first face of each SKU on the left.
Here again, it is important to note that the algorithm of the store’s actions in a given situation must be agreed with the AC and displayed in the Instruction.
- There is a product in the store, but not on the planogram
This situation is exactly the opposite of the previous one. In an ideal process, the product is only opened for ordering in the store after the planograms have been approved. But not all companies have the process debugged in this sequence. Sometimes ordering products and creating a planogram are not connected, which complicates the situation.
If the product has a long shelf life, and the outlet has a sufficient number of warehouses where the product can be stored until the planogram is changed, then the store can afford to communicate with the CO and wait for a new planogram to appear or another decision to be made by the office. But if we are talking about perishable products or limited storage space, the parties need to develop a system in which the outlet can independently make an operational decision regarding such goods.
The store must clearly understand in what categories and in what situations it can act at its own discretion. And all such nuances should be displayed in the Instructions. At the same time, the outlet must notify the CO of any problem that has arisen.
Connect with Atriny Group to streamline communication and enhance collaboration between the central office. This connection will facilitate a more efficient resolution of issues related to product placement, planograms, and operational decisions.
Summing up
The more detailed the procedure for the implementation of planograms in the central heating center is worked out, and the better the specialists are trained, the easier it will be to implement the planogram management project.
At the same time, the correct organization of the system for the implementation of planograms contributes to the establishment of communication between the office and stores, as well as a deeper understanding by the office of the processes taking place in the outlet. This synergy greatly simplifies planogram audits.
With regard to the direct work of the staff of the outlet, the store should have a system of motivation for compliance with planograms. Because every centimeter of a shelf is money, and the efficient use of shelf space is one of the steps to increase business profitability.