The importance of developing a planogram
So often is the case when meeting with a new or potential client and we start talking about their current merchandising and more specifically their planogram process do I hear ‘we have a great process already in place’…'we’re all about process’…or on the flipside ‘we struggle to establish a consistent process’…'we’re always reactive and not proactive’…'our store execution & compliance rates are sub-par’…
Understanding all the moving parts involved in a full merchandising process – from pre-analysis to store execution and compliance – is key.
Who is involved? Who should be involved? How should they be involved? When should they be involved?
To help answer these questions you must first understand what’s happening today: what’s working & what’s not, identify the pain points, bottlenecks, time-consuming manual steps that are necessary but take forever to perform and bog down the process drivers preventing them from focusing on the real goal which is to get stores to execute.
It is important to develop a planogram process road map.
An example would be to breakdown your process into the following areas and then work with key stakeholders to flush out the details and requirements specific to the organization: analyze, kickoff, build, approve, integrity, execute.
Analyze: conduct a category review (assortment decisions, new innovation and overall strategy), as well as a planogram review (item efficiency, space to sales allotment, gap analysis, version/planogram size review, market or regional input).
Kickoff: meet with all stakeholders to finalize assortment, gain alignment on strategy/direction/blocking, fixture requirements, ensure vendor innovation is aligned to planogram release schedule.
Build: draft full assortment planogram (either largest or most common size variation) adhering to established gold standards (for example: days on hand, control label placement, item efficiency, blocking), lab or test store setup to ensure correct fit, build remaining variations, capture missing images, listing for new innovation.
Approve: gain approval from stakeholders.
Integrity: store authorizations are complete for items, fixture arrangements made if applicable, inventory ordered into DCs/confirmed with DSD supplier, markdowns processed for discontinued items, finalize communication, confirm store footage assignments for web distribution.
Execute: ship new item inventory to stores, ensure distribution centres have adequate fill inventory for sku penetration increases, planogram delivery to stores, store execution completed, store compliance review.
Put simply, stores won’t or can’t execute if the planogram they’ve been issued has issues (items don’t scan, products or fixture elements don’t fit, there’s no inventory, labor hours to implement were underestimated).
All these components need to be addressed during the process prior to releasing to the stores. The stores need to know that when they receive a new planogram there will be no barriers to execution – they need the confidence that head office has dotted all the I’s and crossed all the T’s.