Retailers enter new era of top-down power planogramming

Drug Store News, Sept 30, 1991

Retailers Enter New Era Of Top-Down Power Planogramming

By now, retailers spurred by a tight economy and escalating productivity demands are weighing in with total-store planogram programs. These enable merchants to planogram top down rather than botto up - with complete-store perspective to maximize overall performance.

That stance is mandated by intensified competition in the '90s. Retailers must assess not only category performance, but placement and size as well, using space management software aimed at this challenge.

As more retailers adopt scanning, they are increasingly able to capture movement data on goods and categories storewide. Turn rates and sales can be compared, and when integrated with price modeling, can significantly upgraded total profits.

To effectively master top-down merchandising, retailers must write programs that digest this mass of data and sort it into actionable reports that interact with space management programs.

Chains must also staff amply to absorb, distribute and benefit from this incredible new knowledge.

This new retail efficiency will move retailer-vendor relationships into their second generation. No more overspaced or underspaced allocation. The new footage will be based on this new analysis. And, yes, it could call for radical restructuring of store layout. It won't happen overnight, however, because resets are labor-intensive.

Retailers will understandably be hard-pressed to take, say, 75 categories and reset them on a store-by-store basis.

Everyone wants to share in a growing category, and the ones who make it happen most effectively will succeed. Those who assist will truly be the partners retailers seek.

New technology will help vendors and retailers achieve these mutual goals. Hand-held scanners and lap-top computers will be the norm of the '90s. And vendor reps interacting with store managers will be power partners as they customize shelf-sets for local dominance.

They can upload their joint decision to a mainframe or service center, which can kick out hard-copy printouts for reset. Of course, this must match corporate reset goals that are tied to category reviews.

No doubt, complications are there. But so are huge rewards to those who manage this best, and reach this level first with the greatest efficiencies. Now is the time to set a plan, then act on it.

Going to an unbiased service center such as Gladson & Associates may be the best avenue to achieve these goals quickly and professionally. A space management service center is focused on this sort of situation, having the software, the staffing, the hardware - and the commitment - to make it happen.

Retailers should retail, salesmen should sell, and anything that interferes with that process slows everything and makes both less efficient. A service center can bring both parties together with a win-win synergy.