Once viewed as a single-use tool to visualize shelf setups, computerized planogramming systems are proving vital to broader applications in space management.
Retailers fully exploiting the software packages say the category analysis capability enables them to set shelf space to reflect store merchandising philosophy while maximizing profitability of item mix and stock levels.
"We are definitely more aware of what is out there than we were in the past ever since we started to import scan data. It isn't a 'guess-by-guess-by-gosh' thing," said Al Baker, director of computerized planogramming at Marsh Supermarkets, Indianapolis.
Trading guesswork for precise and timely data creates other opportunities, such as more efficient promotional planning, retailers told SN.
"I could probably tell to the day when a manufacturer could expect to have his item in distribution in 90% of our stores -- even if he were to present that item to me [six months in advance]," said Charlie Swanson, manager of space management at Save Mart Supermarkets, Modesto, Calif.
"And that would enable him to plan for in-store demos, coupons, any type of promos he wanted to put together," said Swanson. "That's led to one of the biggest benefits, the fact that more manufacturers and brokers have been presenting better deals or newer items to us. We also know we can take full advantage of allowances much quicker," he added.
Marsh's Baker said retailers are recognizing the rewards that computerized planogramming can bring. "I think the use of data is really what's changed everyone's attitude toward space management and category management and merchandising in general," he added.
Marsh's use of space management data has extended into previously unplanogrammed frontiers and has allowed the retailer to take over tasks traditionally handled by brokers and manufacturers.
"We've been assisting the produce department in popcorn and refrigerated juice sections, and we've toyed with giving produce and meat a basic planogram, allowing them to expand or contract items, as long as they stay in the same relationship with other items in the section," Baker explained.
Another new entry in Marsh's computerized planogram system is kitchen utensils, whose shelf sets are now guided more by the store's general merchandise departments than by brokers and manufacturers.
At Tom Thumb, Dallas, general merchandise items will be among the first to be put on line with a new computerized planogramming system, said Mark Prestidge, operations vice president. Further down the pike, he said, the chain will look into mapping selected areas in produce, bakery and food service.
Integrating previously unplanogrammed areas of the store into the software program may require extra computing power, but decreasing costs of technology have brought that power within reach of more retailers. One retailer using that computing power for planogramming -- augmented by in-house and third-party data bases -- is Farm Fresh, Norfolk, Va.
The chain loads data into its software program from a direct front-end link to the mainframe, which tracks 104 weeks of store-specific scan data on a week-to-week basis.
"Our large capacity for storage and our own internal information give us the flexibility of creating aggregates of time, aggregates of stores and the ability to look at sales volume, unit movement and profit contribution," said Hank St. Claire, manager of merchandising and marketing technologies at Farm Fresh.
In addition, Farm Fresh accesses a third-party census data base to view product movement across categories for the specialty items. "These items may not be in distribution in all stores, or in fact, not specifically planogrammed," he noted.
"We would leave, let's say, 2 feet of the top shelf in category X for the specialty foods distributor to put a product assortment in. When we want to look at the performance of that segment of the business, we utilize a syndicated product, on-line, in-house, to tell us what percent of distribution we have on certain items as well as how they're performing."
Managing space profitably for specialty foods is challenging for a chain of any size, but for an independent operator like Busch's Valu Land, Ann Arbor, Mich., the task is more complex.
Doug Busch, corporate coordinator, said the six-store company differs from other supermarkets served by Spartan Stores, the Grand Rapids, Mich., wholesaler, which uses a different planogram system.
"We carry about 7,000 specialty food items. If Spartan did the planogram for us, they wouldn't have any of those items in it," he said. "Planogramming has helped us eliminate duplicate items and the sections look a lot nicer. What it gives us is a good guide so that when we go to do a reset, we already have 98% accuracy of what it's going to look like," he continued.
"We can react faster, cut in many new items, then send out an intelligent plan to all stores at once vs. me having to tell them one by one," Busch said.
