When research firm Gartner published its market guide on space planning this year, it made one thing clear: retailers who put off digital transformation of their space planning processes risk losing sales.
After all, stores face increasingly tough competition from online shopping which offers unlimited options, personalized customer journeys, and represented more than half of all retail growth in 2018. “Left unchecked, this growth can take shopping trips away from brick-and-mortar retail sales, eventually impacting investment in available selling space,” the Gartner report concluded. In just the first three months of 2019, there were more store closings than the entire year of 2018.
Gartner lays out the top trends in space planning today and how software applications will need to evolve to meet those trends. Here, we break down the key findings of the report and how One Door’s end-to-end merchandising platform solves for each one.
“Retailers are abandoning periodic and complex assortment changes and planogram resets and opting for automated planogram generation and frequent adjustments based on near-real-time market observations.” – Gartner
When it comes to space planning, timing is everything. Retailers need to get the right product in the right store fast to keep up with what’s happening in their stores in near-real-time. If a season’s hot new product sells out within hours, does the store have the agility and digital infrastructure to respond? Can the store operations team communicate directly with HQ and supply chain to get the product back on the shelf while it’s still trending?
Our research tells us no. Most retailers aren’t reacting to market observations in real-time because they still use paper to communicate plans. In our 2019 survey of nearly 300 retail leaders, visual merchandisers and space planners, we found that 63% print and ship merchandising instructions to stores.
Merchandising Cloud is a cloud-based platform that drives a 5-8X increase in planning efficiency. It keeps all product and promotions in one place and automatically generates store-specific plans based on layout and fixture inventory. As a cloud-based app, it lets space planners adjust plans in real time, based on what’s happening on the floor.
“All space planning will increasingly be performed at a store-specific level to ensure that merchandise categories, services and experiences are designed to meet customer expectations.” – Gartner
Localization is a trend that’s not going away. Today’s most successful retailers are creating great customer experiences with hyper-localized assortments and services. And they know that great space planning isn’t just localized by region or city, but down to the unique characteristics of each neighborhood. Unfortunately, the majority of space planning today is done for the space that’s available, rather than designed for the space that’s required to meet customer demographics and expectations. Our 2019 survey found that 41% of retailers base the number of planograms only on fixture size and only 28% of retailers create planograms for each specific store.
Merchandising Cloud’s Floor Plan Editor houses the unique store floor plan for every single store in one place. It allows space planners to import architectural plans and create macro and micro space plans using easy drag-and-drop tools. Keeping an accurate inventory of all your store footprints and fixtures so that you can tailor every shelf and peg toward a target demographic lets you meet, and exceed, customer expectations.
“Interactive mobile applications are integral for the delivery of visual merchandising directives to in-store executional associates.” – Gartner
We know that more efficient, knowledgeable store associates equate to a better customer experience, and that 86% of retailers believe that merchandising execution quality impacts sales, but store teams are increasingly designated as generalists and lack specific training or experience in merchandising. The Gartner report points out that planograms don’t always conform to the exact store configuration in front of them, which can mean wasted hours as store associates grapple with how to set products from inaccurate planograms. “This is a major point of failure. The result is that the retail customer experience may contain discontinued products, inadequate space for stock or be less visually appealing than planned,” the report says.
The Virtual Merchandising Assistant in Merchandising Cloud delivers a guided experience to the associates executing merchandising plans and provides clear visual merchandising directives to store teams, from planograms to POP displays. And, since compliance correlates to a lift in sales, the application features a robust compliance reporting module with photo capture integrated into the mobile device.
Merchandising Cloud is aligned with all the trends in space planning outlined in the Gartner report, and equipped to tackle the pain points identified there: automated planogram generation, store-specificity and a better in-store execution, plus a whole lot more like real-time communication between HQ and stores, streamlined in-store processes and supply chain integration.
So, it’s no surprise that Gartner named One Door as a “Representative Vendor in Advanced Retail Space Management Market” for its Merchandising Cloud Platform.
Learn how Merchandising Cloud solves today’s space planning challenges