As we navigate through these turbulent times, it is more important than ever we utilise our resources to full advantage, keep costs down and capitalise on every opportunity. This may seem like an obvious statement, but many do not have a structure in place to manage two of their most vital assets, inventory and space.

The costs associated with inventory are well known, but space also comes at a cost, whether it is on the shop floor, on a counter or even in a window. So often, this fact is overlooked and in today’s environment of rising rents, the increasing cost of space must deliver a profitable return. Put simply, shelf space is like a rental property and the products are like tenants. They must contribute their share of the rent or risk being considered for eviction. The best way to manage these critical factors is through accurate planograms and floorplans.

Understanding the space available and using it effectively is just as important as the inventory selected to go in that space. Planograms, floorplans and products work together like pieces of a jigsaw and must be captured accurately to ensure integrity in all planning and analysis. On some occasions, planograms and floorplans will be treated as separate functions, often referred to as macro and micro space, but the destinies of these tools are intertwined and one cannot be defined correctly without the other. It is imperative that those managing space have an understanding of this and work across both areas in the space management process.

A little known fact is the amount of data generated from planograms, floorplans and the relationship between them created during the setup and maintenance of any space management function. When correctly established in a database environment, the data relationship between store, floorplan, planogram, fixtures and products can be harnessed to build business efficiency, drive replenishment, reduce multiple keying and decrease the chance of human error creeping in. Many business requirements can be automated and aligned with category management processes, resulting in the ability to share information between business systems and functions.

Using this data, costs can be monitored and controlled by reporting on store, fixture and inventory requirements from the database. When planning new stores, reports can be generated detailing the fixtures required and the exact inventory needed to fit out the store. Similarly, planning changes to existing stores, the before and after plans can be compared to produce the exact fixture quantities necessary to complete the updates. Utilising this information to your advantage ensures excess orders are avoided and no further costs are incurred due to freight and storage of these additional fittings.

Planogram data can be employed to provide insights for category management decisions and even reduce time required for operational execution. An example of this benefit is the ability to drive shelf edge label requirements on a store-by-store, bay-by-bay and product-by-product basis. As the planogram provides the exact location of every product, reports can be produced to deliver the correct quantities and print labels in the same order the products are displayed on shelf. This serves to accelerate the set up or price change processes.

The financial and inventory aspects of space management are well documented, but one of the most important elements is often missed and should be at the centre of all space planning processes. This element is safety. During planning of store layouts, consideration for aisle widths, wheelchair access, evacuation paths and fixture selection are paramount to protect customers and staff. In addition to this, one critical dimension of a product is rarely captured, let alone monitored or used as a trigger for action. Accurately securing height, width and depth data for products is a compulsory exercise but the other essential dimension is weight.
Most space planners do not capture this information or realise the significance for doing so. Given the prevalence of lifting injuries, retailers and suppliers need to consider the weight and bulky dimensions of products to ensure they are merchandised appropriately in store. Fixturing must also be a consideration in this process as it must be able to handle the load being applied. It is imperative that fixture load limits are known and documented to ensure products do not exceed what is deemed safe. Therefore capturing product weight and merging this with stock holding information from the planograms becomes a critical step in the process. Multiplying the unit capacity of each product on show against the weight will allow calculation of total load. This can be compared against the load limits of the fixtures to ensure no issues arise.

Not only should retailers and suppliers work closely on managing these risks, they should also work collaboratively to produce the best customer centric execution in store. Each party will have different objectives in any given planogram produced, but the one common denominator which needs to remain the focus of both is the customer. Obviously brand is an important variable, but it is not the only one and therefore suppliers should ensure their desire to improve positioning is directly aligned with the expectations of the consumer. In the same way, retailers need to ensure they range and merchandise products customers want without placing their agenda ahead of this fact.

As these examples illustrate, there are many factors in the space management process that can affect sales results or impact costs. There is significant value in getting the basics right and laying a solid foundation on which to build future functionality and business benefits upon. The keys to a successful space management function are capturing data accurately, keeping it clean and precise execution in store. Unless this is done properly, all the analysis benefits will be lost with results being compromised and poor decisions being made as a result.

The moral to this story is that space management can be a fantastic driver to secure sales, profit and return on investment. It just requires the correct data with a high level of focus. This doesn’t have to mean time consuming and in fact time can be saved at the implementation end of the process or through data doing the work for you. Your space is limited, so make the most of it and take the time to establish or enhance your space management capability and turn it into profits.

View Steve Close's Profile      Subscribe via RSS