The shelf isn’t what it used to be. You can probably guess why: the pandemic, professional shoppers, supply chain, changing shopping habits, new shopper expectations, the great resignation—all the buzzwords. The question is, what is the new role of the shelf, and how does it affect planogram and store floor plans? More important, how can space management or space planning teams optimize their processes in the face of this new retail reality?
At last month’s NRF conference, I had the chance to talk about these and other topics with some of my colleagues at a panel discussion hosted by One Door: a CXO Perspective on the Role of the Shelf in 2022. We covered not only the role of the shelf, but the potential of AI, the importance of having the right tools and the ways that retailers can set their associates up for success. (I encourage you to watch the video! )
One of the big takeaways from the panel was the limits of retailers’ legacy systems—including paper planograms, spreadsheets, emails, etc.—when it comes to the role of the shelf today. Traditionally, the shelf was geared solely at shoppers making selections and purchases for themselves and their households. So the end game was to make the most attractive presentation possible, including an array of choices and more (and more expensive) items than the shopper may have originally planned to buy.
Ideally, the shopper would end up purchasing an entire solution or system of goods, instead of just one product. So: not just the new glove for the kid that they came in for, but two baseballs, a bat and a pair of new cleats. By anticipating the trip drivers and then surrounding those with options, the retailer could expand the market basket and increase the dollars per transaction—all while making the shopper feel great about their decision to spend and winning their loyalty for having given them so many great choices.
Enter the professional shopper, who has completely different goals and constraints. The professional shopper—or the store associate tasked with pulling orders for BOPIS—wants the most efficient route through the store to find the exact items required. They do not have the latitude to choose a different item and have no interest in examining choices and making a wise selection. To meet their needs, providing an efficient process of selecting (I dare not call it “shopping”) is all that matters.
So, how can retailers meet these new, contradictory demands on merchandising? The key is having a constant feedback loop between what’s happening in the store and what needs to happen from a planning and space management perspective.
When it comes to merchandising, planners should use the percentage of sales driven by BOPIS and professional shoppers to inform the merchandising strategy of planograms. If the ratio of professional shoppers is low, continue to merchandise using a good/better/best or full-solution presentation to encourage additional purchases. If there’s a high ratio of professional shoppers, consider a regimented approach to merchandising that encourages faster perception of the merchandise organization, to help professional shoppers quickly recognize the entire selection and home in on the item they need.
It’s also important to account for the fact that supply chain voids are creating holes in the intended merchandise presentation. Many retailers are giving store operators more leniency for “facing over” holes by spreading lean inventory across shelves to make their presentation more appealing. While there are good reasons to do this, it will immediately wreak havoc on professional shopping apps intended to marry planogram locations to build efficient shopping routes. Store operators need to be communicating voids and face-overs in real time to direct professional shoppers to the locations of alternative items. (And ideally, the retailer will use profitability in their logic to recommend substitutions!)
To be clear: dynamic, two-way communication is critical to making these kinds of adjustments quickly, particularly if you’re dealing with hundreds of stores. As one of my fellow panelists, Jen Loesch, pointed out, changes and resets that in the past may have happened monthly may need to happen weekly or even daily. Paper planograms and other static planning processes are doomed to fall short. Despite sputtering executives who say otherwise, planogramming is ultimately a one-way planning system, meant to be the direct connector between non-seasonal assortments and store operations In other words, a map of where to place the goods unloaded from the truck onto the sales floor. And a map simply isn’t the right tool in a world where merchandising has to be fluid and adaptive.
The good news is that with the right technology—ideally paired with expert space management and planning guidance—retailers can turn the challenges of today’s retail environment into opportunities to boost sales and win customer loyalty.
To hear more about my take on the shelf, plus some excellent insights from Kelly Breitenbecher, CXO for Evolve Information Solutions and Jen Loesch, CEO of Breatheable Baby, I hope you’ll watch a CXO Perspective on the Role of the Shelf in 2022.
Flora Delaney is President of Delaney Consulting, a boutique retail strategy firm, and author of Retail, the Second Oldest Profession.