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.
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.
7 comments:
As one of the user of planogramming tool I understand the importance of the POG tool. I have also worked at the similar kind of roles as author of this article.
I strongly feel retailers need customised POG based on the demography. Retailers in past have not invested time and money on the advanced POG techniques and have not realised the importnace of using sophisticated tools and thereby lost that extra bucks in terms of revenue.
With the retail boom in India and the entry of international retailers POG is going to be looked seriously, it is the backbone of any business.
All matured retailers understands that if you do not hold right mix in right quantity you will loose potential revenue and customers loyalty. Since Indian retail was not organised we can't imagine usage of sophisticatde tools in POG but in future POG is going to be a big market. Believe FMCG (CPG) companies will come forward and help retailers to organise thier products on shelf logically as they do it in west. This will open new doors of opportunities in POG market. Potential outsourcing of POG could be a potential market.
Neeraj
well its a new topic to me, but not totally new, as i have come across planograms and their basic idea.
Well never knew that planograms can affect business to quite an extent, after reading this i feel so.
the Indian retailers may be backing on the planogrammers possibly bcos they dont feel its important at the moment. but a structured and well authored way of displaying products in a store with the use of planograms and based on the demographics and other criteria, it definitely makes an impact on the business, and i feel its time the industry realizes this as its the time of retail!
From a solutions perspective, we can categorize planogramming to be a tactical/ execution level work. This ofcourse is tied in to the corresponding planning level task which is more commonly called "space planning", both of these typically handled by the retailer's Space planning department. This function is very intricately tied to the other planning level task, "Assortment Planning". Both drive each other. Understanding this is usually a big challenge for all retailers. These functions are so different in different retailers depending on the life cycle of the product. For example. CPG products have longer life cycle as opposed to apparel which is generally in the six week range, making the planning process entirely different since there is going to be no sales history.
I think this is where getting help from high end solution providers, will make a big difference for the retailer who is entering a market that has not been researched enough.
While the solutions have to be built/customized for the indian market, I think there is a huge gap that can atleast be half way filled with existing solutions as is.
Balaji Babu
Oracle Retail
http://www.oracle.com/industries/retail/index.html
Hi Bala ... Great Work Bala ...for the effort you put.......
hi to every body !!! this will be my first post a comment on this topic...
after worked so many years in retail as a FM operations and for some time as Merchan for Consumer durable Electronics .... and joined IT last year .... after joining IT , came to know there are different tools or application for retail irrespective reading some article or maag...
i still feel that indian retail players like Reliance or walmart.... has to send the merchan manager for out side india to learn the importance of the POG or some tools has to be invested for the better prospects of the POG .
Really speaking now Big retailer has got the experience guys who has worked for Big Box retailers...
for example shoppers stop has recruited a guy especially for the Air port retailing format for POG and Operations and these guys are there in india and hyd ans study the entire retail market and formats for the past 1 year.......
since hyd will be seeing soon the international airport and Air port Retailing ....... got the source from " The SHOP " event organinsed by the IMAGES RETAIL where all South Indian CEO's are meet and discuss the various ways of increasing the retail industry with in south india across different formats.......
hope i just started writing and going in the correct direction...incase if any comment .....let me know .....
A completely new & informative topic... Though I've wondered every now and then as to why one item is right at the entrance of a store... and the other in a nook...
Your blog sheds pretty good light on the same.
As I think of it.. Although the POGs have been a subtle part of the Indian retail, its time that a serious effort is made by the retailer in getting the right stuff at the right place.
Going by your article.. I do believe the FMCG companies would take a note of this & make the best of it.
I personally do not see any use of POGs in Indian retail, in the consumer perspective. Ultimately if we are organising the products in the store and also in the shelf it is not only for the retailer's utility but also for the consumer friendliness. As long as we have 10-15 people in the vicinity who are decently educated about the product availability, consumer is not 'trained' to search for it. How many stores make an attempt to train the consumers on it. It makes sense for them as in the long run it makes them reduce the man power too...This is particularly important in speciality stores like a Health & Glow, where consumers come in with atleast a basic knowledge of what they want!!!
There is a lot happening in Indian retailing and development is taking place in every sphere of retailing . Best practices are being adopted , subject matter experts are in , world class supply chain is being planned and getting developed, and definitely indian retailing is investing in hell lot of technology which will help them leverage every sphere of retailing .
Reliance, Birla , Bharti have already invested on technology like JDA INTACTIX for planogramming and everyone knows the importance of it . Telling that planogram is important is a passee in retailing all of us know and we practise it .
The problem what retailers face is low implementation and reversal feedback mechanism from stores. Reliance is trying to cope up with web distribution of planograms with subsequent implementation feedback .
There are few other points as how relevent is planograms in other forms of retailing like Consumer Durables , Jewellery , Lifestyle products and other specility retail.
Does the business logic of price always work in planograming ? Do we need to build consumer decision trees for categories where brand/cult product is bigger than the category itself ? Can planograms help a category manger to sell more of console games other than XBOX/PS2/PS3. Can a category manger increase his category share of personal audio by putting other brands or private label at eye level .The answer is NO u cannot substitute an ipod , it is more than just an MP3 player for customers.
Importance of planogram is known to retailers , today the need is to analyse it take corrective measures through space analytics and i am sure once retailers get their house in order these issues are the next what they will address . Till then
Happy Selling !!!
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