Planogram Automation Solves Category Management’s Toughest Challenge

03.18.2024 | Mike Troy
With a critical component of a connected store strategy, merchants gain the ability to create localized, customer-centric assortments while improving on-shelf availability

One of the most significant advances in category management involves the creation of planograms that are store-specific, space-aware, and easily updatable. This dream scenario has long been the aspiration of category managers intent on keeping pace with shoppers’ elevated expectations and rapidly shifting product preferences. However, it wasn’t attainable until recently.

The big change involved the development of model-based planogram automation solutions that use a retailer’s wealth of shopper data and automate the process of creating store-specific and customer-centric planograms. It marks a huge advancement for category management because such solutions dramatically reduce the time needed to create planograms, and those planograms are optimized for forecasted shopper demand and better reflect anticipated rates of sale and inventory days on hand. These improvements have a material impact on various performance metrics. For example, SymphonyAI calculates based on real-world implementations that planogram automation can achieve the following:

  • A 50% improvement in efficiency through process enablement, automation, and model-based planogram development.
  • Automate up to 95% of planogram creation.
  • A 3X reduction in category reset cycle times.
  • A measurable improvement in product availability.

The power of planogram automation has multiple, interconnected dimensions, all made possible by technological advances that position retailers for success in an environment where shopper behavior is more dynamic than ever. That means retailers need to identify trends and update planograms faster, which is why, going forward, planogram automation is an essential capability for retailers.

The model of planogram perfection

Planogram automation greatly minimizes the complexity of creating custom space and supply chain-aware assortments for every format and store and proactively updates assortments as market conditions change. The key is a model-based approach that relies on data and algorithms to create planograms in a fraction of the time of more manual, action list-based processes.

An additional benefit, which speaks to the job satisfaction of category managers, is that their efforts are focused on analytics and strategy development instead of the arduous, some would say impossible, task of manually creating store-specific planograms. Retailers have long understood shoppers love localized assortments and that new items drive sales. However, executing store-specific planograms across hundreds or thousands of stores of varying sizes, category space allocations, and fixture variations is daunting for those who attempt it. Then, there is the issue of new item cut-ins and potential lost sales when product launches don’t align with a retailer’s category reset plans.

Other advantages of PA

In the age of big data and rapidly advancing technology, model-based planogram creation offers several advantages over manual methods, especially for retailers operating hundreds or thousands of stores. Here are some key reasons why:

Data Utilization: Model-based planogram creation uses vast amounts of data, including sales history, customer demographics, seasonal trends, and product preferences. Quickly and accurately analyzing data sources lets retailers make informed decisions about product placement to optimize sales and customer satisfaction.

Efficiency: Algorithms that quickly analyze data and generate planograms maximize sales potential. This efficiency is particularly beneficial for retailers that operate large numbers of stores as it dramatically reduces the time and resources required to create and implement planograms across multiple locations.

Consistency and flexibility: Model-based planogram creation ensures consistency across a store base that helps build brand identity and provides customers with a familiar shopping experience while also giving retailers the flexibility to customize assortments where desirable based on local demand and space considerations.

Adaptability: Algorithms can continuously adapt and optimize planograms based on real-time data feedback. This adaptability allows retailers to respond quickly to changes in consumer behavior, market trends, and product performance, ensuring ongoing planogram effectiveness.

Scalability: Model-based planogram creation is highly scalable and can accommodate the needs of retailers with large store networks. Whether a retailer operates ten stores or a thousand, the same data-driven approach can be applied to optimize product placement and drive sales across the entire retail chain.

Competitive Advantage: Through advanced analytics, retailers can gain a competitive advantage in the market through identification of hidden patterns in data that lead to new sales opportunities, thereby outpacing retailers reliant on traditional manual methods.

Model-based planogram creation offers significant benefits for retailers looking to enhance efficiency, consistency, adaptability, scalability, and competitive advantage in an increasingly data-driven retail environment. As technology continues to evolve, adopting solutions that automate and optimize decisions, especially in category management, will become even more prevalent and essential for success.

Discover what’s possible with planogram automation and how it improves efficiency and helps retailers grow sales. Get in touch!

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