While you can have the right type of products as well as the right quantity on your planogram, there is one more factor to keep in mind. It’s your product flow. When building your planograms, it’s important. In fact, we’d argue it’s essential. That’s because without the correct flow, your categories will invariably underperform.
Worse than that is the knock-on effect that one underperforming category can have on your bottom line. Multiply that one underperforming category by two or three and you’ll soon find your stores struggling to post decent weekly (or monthly) sales figures.
What is a product flow [and why is it so important?]
Before we take a look at how you can create a first-rate product flow for your stores, it’s essential first to understand what it is. More importantly, what an efficient product flow would look like once completed.
Fortunately, as far as retail terms go, a product flow is one of the easiest concepts to understand. That’s because you can find the explanation in its wording. It describes the organised flow of your products in your stores. In other words, it acts as a guide for your shoppers to shop the different categories in your stores.
That said, it’s also one of the most valuable exercises to do for your stores.
For example, when a customer walks into your store on their weekly grocery shop looking for the products on their shopping list, by implementing a logical flow, they’ll know exactly where to go to find the products they need. That’s because the way in which you’ve presented your products makes sense to them.
More than that, a good flow could result in your customer deviating from their original shopping list, adding purchases that they’ve picked up on impulse.
In that way, getting the flow right makes for a happier customer and better shopping experience.
What are the consequences of not following a logical product flow?
The above should be enough to counter any argument about why you should follow a flow. That said, it’s still worth looking at the consequences of failing to implement a flow that makes sense not only to your shoppers but your stores too
To get an idea of the repercussions, you need to consider what would happen if you displease or frustrate your customers.
For one, without a guide, your customers won’t shop your stores in the manner that you intend them to. That’s because you’ll confuse them. Let’s take a fundamental principle of placing your products on the shelf from smallest to largest, top to bottom. That’s how your shoppers would look for items and so you’d also look to do that.
By reversing that, though, keeping your smallest products at the bottom, you’ll frustrate your shoppers.
As a result, your stores will not perform as well as they should. There will be a drop in your sales figures, and your customers will consider shopping elsewhere. All because you’ve failed to organise your store in a way that makes sense to your customers.
Questions to ask to help you create a great product flow for your stores
As a space planner, before creating a product flow, you need first to understand everything there is to know about the product category. After all, whatever you do will have an enormous impact on the shopping experience for your customers. More importantly, it’ll impact a store’s bottom line.
For the sake of this piece, we’re going to use the Dental and Mouth Care category found at your average pharmacy retailer as an example. And we’re going to ask several questions to help you create a flow for this category.
1. What important factors about this category influence how it’s packed on a shelf?
The first question you need to ask yourself as you start to develop a flow is the question around the factors that will influence how you pack your shelves.
These factors can include anything from the types of packs or boxes you work with to the different types of product segments within the category. Also, are you able to differentiate between two different products within a sub-category?
There are also general rules to keep in mind.
For example, keep all your toothpaste together, keep all your mouthwashes together, and pack your products from smallest to largest. Mind you this last rule is specific to all categories, regardless of the products.
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When it comes to your toothbrush products, it's a good idea to place them on a pegboard. If they aren’t put on a pegboard, there is every chance that they’ll look untidy. With that in mind, do you have enough pegs to place on your pegboard? Be careful to monitor your shelf capacity to avoid any shopper confusion.
Another factor to consider is your mouthwash bottles. Considering their shape, you can’t give them side facings.
2. Are your products classified correctly within this category?
Your products should always be classified correctly. That’s because by having the correct product classifications, you ensure that your products are all in the right place on your shelf, ready for your customers to find them. More than that, it will also save your space planners time.
So what does the product classification look like for the Dental and Mouth Care category? Here is an example:
- Category: Dental and Mouth Care
- Sub-Category: Toothbrushes / Toothpastes / Mouthwashes / Interdental / Denture Care
- Segment: Whitening / Flavours
- Sub-Segment: General Size and Uom
Just to note, the above classification isn’t all-encompassing. For example, you can go into more detail around Sub-Category and Segment. In fact, your hierarchy should contain as much information as possible about the product so that you can understand why items are placed next to each other on your planogram and shelf.
That said, when classifying your products, your consumer decision tree (CDT), which starts at your category level, will always be different depending on how your customer shops. For example, if your customer is price sensitive, they’d look at which products would meet their budget and buy accordingly.
3. What is the flow of this category?
For the sake of brevity, we’re not going to go through each sub-category in the Dental and Mouth Care category. Instead, we’re going to look at one sub-category: Toothpaste.
This sub-category is usually set up by brand. That’s because that is how your customers typically shop this category.
So, when setting up your flow, you’d begin with your market leader. Since your market leader would most likely have multiple varieties (sub-brands) of toothpaste, you’d keep all the variants together too. The next best competitor in the Toothpaste market would follow your market leader. Brands that focus on products that fit into your Sensitive market are next, followed by brands which focus on products for the Whitening market.
If your pharmacy stocks a house brand, you’d position it at eye-level next to your market leader to increase visibility.
That said, when it comes to setting up your product flow, you do need to consider your category strategy. For example, if you’re following a profit generating strategy, you’d be better off putting your most profitable item at eye level and the less profitable item at the bottom of your shelf.
Here are a few other strategies worth considering that can help you to generate more sales.
4. What are the merchandising guidelines for this specific category?
The last question you need to ask would be, which merchandising guidelines are you going to use?
There are many general rules to consider when merchandising your products. That includes spacing your products evenly on your shelf to avoid congestion. You should space your shelves evenly too. And then there is the fact that you need to merchandise your products by size, with the smallest at the top and the largest (and heaviest) at the bottom.
There are also the different merchandising technique to kind in mind too.
That said, there are different rules for different categories. For example, while you can brand block your Dental and Mouth Care category, you can’t do the same for your Vitamins and Medications category. Remember, a great in-store flow is about presenting products in the way that your customers understand. More importantly, in the way that they’d shop your category.
For that reason, you’d look at creating a different flow for other categories. For your Medications category, you’d be better off merchandising it according to ailment since that is how your shoppers will approach this category.
