Planogram is no longer a dirty word

G|ltilPuTEn generated planogram lor Kwikset locksels results in endcao shown below. More and more manufacturers are using space management t0 create customized planograms for their customers.

planogram is generated, the section is reset, and evaluation ofthe section performance begins again.

Manufacturers, retailers and distributors all use computerized space management, yet each uses it differently. Retailers use space management to create "what if"' retail scenarios on screen. This allows them to immediately see the impact of their merchandising decisions to the bottom line. Space management can help them create more profitable product mixes, reduce out of stocks and decrease inventory costs.

One retail chain, for example, credits its system with reducing inventory costs by 53%, largely through analysis of movement, days of supply and fixturing. Most space management systems have the ability to read point of sale (POS) data, which provides retailers with an ongoing analysis of product movement. Stores can be reset quickly based on what is making money and what is not. Space management also allows store plannners to efficiently develop customized planograms on a regional or even store-specific basis. There are other not-so-obvious benefits, including more accurate store displays, fewer store personnel required to set the shelves as a result of precise set-up planograms, and increased productivity of the store planning/merchandising departments.

Another benefit of space management is that it often leads to more attractive displays. Program accessories create planograms with digitized product images. Not only do these computer-generated planograms increase in-store accuracy and productivity, but they also help eliminate aesthetic surprises.

Builders Emporium uses space management to generate planograms for its 105 home centers. The Irvine.

Story at a Glance

Computerized space management changes the way retailers allot space to products, stock shelves and create displays. as much as 539/o savings in inventory costs rcported systems and services for all budgets.

Ca.,-based retailer uses a space management system to generate a few "generic" planograms for each product category, based on the store fixturing and traffic pattern. Every 90 days point of sale data is downloaded from the mainframe computers and imported into the program. Reports are generated, comparing actual sales with the buyers' original estimates, on an overall, regional and store-specific basis. SKUs are added or deleted, resulting in a product mix that is optimal for that geographic location.

Builders Emporium and other users say that space management is clearly an idea whose time has come. And the numbers back them up. The number of companies using programs has more than doubled annually since 1988. This trend is expected to continue through the decade, particularly as the fluctuating economy forces companies to take a hard look at their operations and, ultimately, at new solutions to optimize the retail space.

Lynne Fancher, MarketWare Corp., developer of Pegman space management system, provided the information for this article -editor.