By Flora Delaney, President Of Delaney Consulting
The shelf isn’t what it used to be, and you can probably guess why.
The pandemic, professional shoppers, supply chain, changing shopping habits, new shopper expectations, the Great Resignation.
The questions are: What is the new role of the shelf? How does it affect planogram and store floor plans?
A more important question might be: How can space management or space planning teams optimize their processes in the face of this new retail reality?
At the National Retail Federation’s conference in 2022, I talked about this with my colleagues at a panel discussion hosted by One Door: A CXO Perspective on the Role of the Shelf in 2022.
We covered the role of the shelf and the potential of AI in retail, the importance of having the right tools, and how retailers can set their store associates up for success.
One of the big takeaways from the panel was the limits of retailers’ legacy systems, including paper planograms, spreadsheets, and emails, 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. The endgame was to make the most attractive presentation possible.
Retailers could offer a variety of choices (and prices) to persuade shoppers to buy more than they intended to.
Ideally, the shopper would purchase multiple things, instead of just one product.
For example, they would not buy just the new glove for their kid that they came in for. They’d also buy two baseballs, a bat, and a pair of new cleats.
By anticipating the trip drivers and surrounding those with options, the retailer could expand the market basket and increase the dollars per transaction. They could do this all while making the shopper feel great about their decision to spend and winning their loyalty by giving 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 (Buy Online, Pickup in Store) — 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. They have no interest in examining choices and making the wisest selection.
To meet their needs, all that matters is an efficient selection process (not “shopping”).
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 visual merchandising, store 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 merchandising using a good/better/best or full-solution presentation to encourage additional purchases.
If the ratio of professional shoppers is high, consider a more regimented approach to visual merchandising. The approach should encourage faster perception of the merchandise organization to help professional shoppers quickly recognize the entire selection and hone in on the item they need.
It’s also important to recognize that supply chain voids create 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 communicate voids and face-overs in real time to direct professional shoppers to the locations of alternative items.
(Ideally, the retailer will use profitability in their logic to recommend substitutions.)
Dynamic two-way communication is critical to adjusting quickly, particularly if you have hundreds of stores. As one of my fellow panelists, One Door board member Jen Loesch pointed out, changes and resets that happened monthly in the past now need to happen weekly or 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. It’s the direct connector between non-seasonal assortments and store operations.
In other words, planograms are maps of where to place the goods unloaded from the truck onto the sales floor. However, a map 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.
About Flora Delaney
Flora is the president of Delaney Consulting, a boutique retail strategy firm. She is also the author of Retail The Second-Oldest Profession: 7 Timeless Principles to WIN in Retail Today.