Retail Shelf Merchandising – Planograms & beyond…

Authored by Balakrishna Parankusam Venkata

Retail Shelf Merchandising is also known as Planogramming, among other interpretations. For the uninitiated, Planogramming can be defined as the art and science of displaying products / items / Stock (or Store) Keeping Units / brands on the shelf of a retailer, which is based on various parameters on inventory turns, percentage contribution to volumes / sales turnover, based on mutually negotiated terms and conditions between the Consumer Package Goods (CPG) manufacturer and the retailer.

Wikipedia (http://en.wikipedia.org/wiki/Planogram) defines a Planogram as a diagram of fixtures and products that illustrates how and where retail products should be displayed, usually on a store shelf in order to increase customer purchases. They may also be referred to as plano-grams, plan-o-grams, schematics (archaic) or POGs. Planogramming is a skill developed in the fields of merchandising and retail space planning. A person with this skill can be referred to as a planogrammer.

Having worked as an Operations Manager and subsequently as a Merchandising Manager, planogramming was one of the critical review areas of my daily store / merchandising operations. But due to non-exposure to high end Planogramming tools like JDA’s Intactix or Spaceman or Apollo , the planning, preparation and implementing of POGs was restricted to excel sheets, but as I progressed in my career I was exposed to JDA’s Intactix which totally turned around whatever perceptions I had about the availability and usage of advanced tools for effective building of POGs. But irrespective of the tool or mechanism used the importance of POGs was never lost on the retailer. Many FMCG (Fast Moving Consumer Goods) the Indian equivalent of CPG companies have had come forward to do the shelf management for the retailer, free of cost, but somehow the intent and seriousness with which they had started out could not be sustained.

The recent retail boom across India, has resulted in the retailers waking up to the importance of POGs and have built up dedicated teams whose key result areas are POG – ing and visual merchandising.

The objective of this post is not to dissect the defination of POGs or not to understand what it does and what has happened, but what does the future hold for the POGs and few other probing questions like, “How relevant is a POG in the retail industry? Are retailers serious about spending time and money on developing planograms which suit the respective demographic profiles and business requirements of each of the stores or is it “one planogram fits all” principle which is being advocated? If developing and implementing of planograms is considered highly relevant then why is it that the same is not being felt by the retailers? Or is it felt by the retailer and somewhere we are missing the crucial point linking its importance to a retailer’s business? Why is that retail ERP product companies are not big time into devloping and selling POG tools? Why ITES (Information Technology Enabled Servcies) and prominent IT companies are not able to go beyond the tip of the iceberg as far getting high end POG services outsourced?"

Rather than a post, this article, is more like a questionnaire to solicit answers , feedback , views from the readers and followers of this blog.

Let the Games begin!

Authored by Balakrishna Parankusam

The word retail, when I joined one of the leading Indian retail chain in 2001, meant detail, and it still does but now everyone seems to humming the word retail for different reasons, for some it means investment and business opportunities, for some, raking in the moolah on the bourses, the latest oversubscription of Vishal Retail IPO being an example of this, and for some they just want to be part of the retail discussion . Even the neighbourhood friendly Kirana (the so called mom – pop shops) would like rename his shop from Ram Babu & Sons Rice Merchant to Ramz Retail. Name them and everyone is jumping on to the lucrative or otherwise Retail bandwagon.

12 months back when I started writing for my blog, Retailog, I was speculating what the future has in store for the Indian retailers. Now, a lot of water has flown down the Cauvery, and most of the retailers are slowly but steadily digging their feet deeper into the Indian market. Reliance Retail captured the imagination of the nation and is now living upto its forecasts, Future Retail apart from sponsoring the scarcely crowded and hardly viewed cricket matches in Ireland, is setting its back office in order and is rewriting how retail business should be done in India. Aditya Birla Retail, without much fanfare silently acquired the Fabmall and Trinethra chain of outlets across southern India and is now expanding rapidly in Western India through its “More” brand of outlets. The pioneer of Indian grocery retailing, RPG Retail is silently increasing its foothold across India through its Spencer’s brand of stores. The mega Bharti – Walmart deal could be signed up any day and everyone is waiting with baited breath.

In 2001, I had to explain people what retail was all about, and I found it tougher than my kindergarten maths teacher found teaching me the principle of BODMAS in school. Today, even the auto rickshaw driver, Raju, brandishing his stylish Moto phones, has a word or two to talk on retail, and going by his knowledge he must be one of the keynote speakers in his basti meetings.

The burgeoning middle class incomes, the penetration of plastic money (that reminds me of my overdue credit card bills), the surging job market, the mind-boggling growth in real estate in terms of malls (one gets “mauled” in these places on weekends), availability of easy credit are some of the reasons why Retail is the current buzzword.

But what does all this have for the most sought after object of desire, the customer. Will she have a better bargain for the best quality of products, will these new age retailers redefine customer delight, will customer satisfaction be a priority over business break even. The answers to all these questions would be difficult, as these retailers will try every trick in the book to woo the customers into their stores and also ensure their stickiness to the outlets and also ensure that the footfalls are optimally exploited to achieve a faster then forecasted break-even.
Till all these happen, let me go back to Ram Babu & Sons Rice Merchant or Ramz Retail and check if even he wants to get listed on the stock market.