2012

Abhishek Sinha

[RETAIL BUYING & CATEGORY MANAGMENT]

Comparison & analysis of planogram of three different categories namely Apparel, Electronics & FMCGs & suggestion for improvement in the planogram.

Planogram: The planogram is a visual diagram, or drawing, that provides in detail where every product in a retail store should be placed. These schematics not only present a flow chart for the particular merchandise departments within a store layout but also show on which aisle and on what shelf an item is located. A planogram should also illustrate how many facings are allocated for each SKU.

The complexity of a planogram may vary by the size of the store, the software used to create the planogram and the need of the retailer. Planograms can be as simple as a photo of a preset section or more detailed with numbered peg holes and shelf notches showing exact placement of each item. Creation of Planograms Big box stores and larger retailers typically hire merchandising specialists to assist in developing planograms or they may have their own in-house planogrammers. Due to the hefty price tag of most planogram software, small and independent retailers often resort to using word processors or paper and pen to optimize shelf layout.

As competition increases, we're seeing vendors and distributors becoming more aware of the importance of correctly merchandising their products. That awareness is leading to better point-of-sale displays, planograms and other marketing aids provided to retailers directly from the suppliers at no cost. Planogram Purpose

Product placement and improved sales are just two very basic reasons a retailer should be implementing planograms in their shops. Planograms provide many other positive benefits, such as:

Assigned selling potential to every square foot of space Satisfying customers with a better visual appeal Easier product replenishment for staff Better related product positioning

Tighter inventory control and reduction of out-of-stocks

Effective communication tool for staff-produced displays

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REQUIREMENTS: Sideview

Fixture information Planogram SKU listing

FIXTURE INFORMATION:

Shelf descriptions/height (shelf 1 is always 7.375, shelf 2-9.00, shelf 3-8.875etc. Note: The base shelf is always shelf 1 working from the bottom to thetop, left to right.) Where pushers or dividers are incorporated ensure appropriate space is allowed. MERCHANDISING REQUIREMENTS/GUIDELINES Merchandise layout All products/skus should be horizontally merchandised Brands (not skus) can be vertically blocked

Below are the requirements for each component:

Holding power standards require each sku to support a store allocationunit plus 1 piece per facing based on 16 base decks and 15 shelves.(Shelf depths may vary by planogram and should be verified with themerchant.) Compare And Save In the case of compare and save merchandising, the private label brand isalways merchandise to the right of the national brand regardless ofwhether a right or left hand set. Reverse Sets Both a right and left hand set will need to be provided. Planogram Height The top of product cannot exceed gondola height. SKU LISTING/PRODUCT INFORMATION

Holding Power Verification

Shoppable height of the merchandise cannot exceed 72.

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 UPC sku

Description

Size description if applicable Facings - #high/#wide New sku indication Sideview Example

Product dimensions height/width/depth for all new and existing skus. (Refer toHighlight anyexisting skus where dimensions have changed. Case pack quantities master/inner if available Indicate if product is merchandised in a tray, including number of units in a tray.

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A logic next step from the general layout is to place the individual products within the applicable blocks. This is where you start creating a planogram.

The basic version of a planogram is a schematic layout where the products are displayed as little blocks. A more visual version would be one where you use a photorealistic display of each product, often referred to as Live Images. The pictures below give you an idea of what these could look like above. Benefits The main benefits of a visual planogram are already manifold:

The Study:

A logic shelf-layout will please the consumers as they will be able to quickly find what theyre looking for. Its a visual proof that the products youre suggesting to be carried actually fit on the section. The schematic output is an effective way to increase shelf-reset efficiency. You will have a similar layout in all stores of the chain, contributing to a consistent shopping experience. Using Live Images, new product packaging can effectively be checked in a real-life environment without the high cost of creating many dummies and actual in-store tests. New or (temporarily) redesigned products can be checked for fitting on and between the shelves, ensuring seamless roll-out and effective (volume-plus) promotions.

We have taken three categories and three different stores in each category to analyze the planogram as follows: Category Store Store 1 Big Bazaar (Hypermarket) Big Bazaar Big Bazaar (Hypermarket) (Hypermarket) Apparel Electronics FMCGs

Store 2

Central (Vashi) Central (Vashi) Food Max MBO MBO (Kamothe) Departmental Store Levis EBO, Worli Reliance Digital Local Kirana Store

Store 3

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Apparel

1. Levis Store, Atria Mall, Worli

2. Levis Merchandise at Vashi Central

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3. Similar Merchandise at Big Bazaar, Raghuleela Mall, Vashi

1. Apparel (Denim Jeans) Comparison Points Presentation of product Inventory level of Shelves Height Stock Cross-merchandise Visibility

Appealing Lesser capacity Fewer No Optimum

Levis EBO

than Full No

Less Appealing Central Vashi Ideal Enough Higher

Stacked very closely Big Bazaar, Vashi Very less Yes Low height More choices Much higher Cramped

SKUs Capacity (Space Lesser Utilization) Space around

Very comfortable Spacious

Comfortable

Less spacious

Less comfortable

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Appearance Product-customer interface Communication brand identity

Profit per inch of shelf Least space 2. Electronics (LCD TV) Comparison Points Presentation of product Inventory level of Shelves Height Stock Cross-merchandise Visibility

of Highly Appealing

Attractive

Convenient

Less attractive Moderate

Organized but not Messy convenient Less appealing

Lesser attractive Confusing Highest

Segmented Moderate Optimum Higher Yes Suitable Better

Central Vashi

Cross merchandise Big Bazaar Limited Lesser Yes More optimum

Segmented Extensive Moderate No Spacious Best

Reliance Digital

than Good

SKUs Capacity (Space Good Utilization) Space around Appearance Product-customer interface Communication brand identity

Cramped

Improper Good Low

Minimum Minimum

Profit per inch of shelf Highest space

of Good Communicated

Moderate

Less Spacious Less communicated

Proper Distance Maximum Maximum Moderate

Best Communicated

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Electronics

1. Electronics at Central, Vashi

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2. Electronics at Big Bazaar, Vashi

3. Electronics at Reliance Digital, Vashi

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FMCGs

1. FMCGs at Big Bazaar, Vashi

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2. FMCGs at Food Max, Kamothe

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3. FMCGs at a Local Kirana Store

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3. FMCGs

Comparison Points Presentation of product Inventory level of Shelves Height Stock Cross-merchandise Visibility

Big Bazaar Organized Optimum Yes Best Best Best Maximum Fully occupied

Food Max Organized Good Yes Good Good Moderate Better Better Least Partly occupied

Babosa Supermarket Unorganized More No Good Good Minimum Cramped Less occupied

SKUs Capacity (Space Maximum Utilization) Space around Appearance Product-customer interface Communication brand identity

Less Spacious

More Spacious

Maximum

Profit per inch of shelf Comparatively less space 1. Suggested Planogram for Apparel

of Color-wise & brand Color-wise & brand Mixed wise separation wise separation

Unappealing Maximum

The planogram should serve the following purpose which was not fully served in any of the three stores. To communicate how to set the merchandise To increase customer purchases. To make them look more desirable. To adjust the visibility, appearance and presence of products. To ensure sufficient inventory levels on the shelf or display. To use space effectively whether floor, page or virtual. To optimize short- and long-term returns on investment.

To provide a logical, convenient and inspiring product-customer interface.

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To make right selection of products available.

To facilitate communication of retailers brand identity. To maximize profit per centimeter of shelf space.

Understand the relationship between space, sales and profit

Denim, the brands merchandising focus, in our case, can be rolled and tucked into shelving as shown in the above planogram, can be mixed with accessories on tables and can be hanged from racks.

While the space has a worn, classy look unconventional elements give it an edgy punch while utilizing the maximum space at the same time. 2. Suggested Planogram for Electronics The following kind of planogram can be used for electronic items. It has the benefit of cross-merchandising and because of different sizes of shelves; space utilization will be maximum as well as appealing to the eye so that customer is attracted towards it.
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3. Suggested Planogram for FMCGs

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Advantages of using this new planogram:

a. b. c. d. e. f. g.

Facings and rows can be added to increase sales. Products can be bill boarded. Stocking labor is radically reduced. Insures product rotation, reduces shrink. Fixtures can be lifted out for easy re-stocking. The planogram can be reset in minutes. Universal brackets can be mounted anywhere. --------******-------

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