Before implementing floor planning software in your retail business, you need to ask yourself a series of questions. That’s because in asking them, you’re setting yourself up for success. More importantly, in reviewing these questions, you’ll understand what you need to do to make full use of such software.
1. Are your planograms linked to your floor plan?
The first question you need to ask yourself before you consider implementing floor planning software is this: are your planograms linked to your floor plans?
The reasons for asking yourself this question are simple, and we’ve mentioned them, in brief, in other articles on this blog, such as this one on those questions retailers ask us the most. We also dealt with it in another piece, which focused on what you can accomplish with the right floor planning software.
That said, it’s still worth digging deeper to explain why your planograms and floor plan must be linked. More importantly, why you need to build your planograms first before you start on your floor plan.
Let us explain:
Before building any floor plan, you first need to determine how much space to give to each of your categories. After all, if you don’t know how much space to apportion to each category, your store will be a mess; riddled with out of stocks due to lack of appropriate space allocated to high-selling categories. There is also the fact that you can’t determine your category space by looking at your floor plans alone.
You need data to help you. More importantly, you need the causal data found in planograms.
Book a one-on-one consultation with a DotActiv Account Advisor and hear how we can help you create a floor plan that meets your business’ goals
In the retail sense, your causal data is any information that helps you to understand your environment so that you can make informed space planning decisions. It includes information on your shelf capacity, minimum display depth and product facings, to name a few.
With this data at hand, you’re better placed to determine your Days of Supply and Gross Margin Return on Investment. More importantly, you can also figure out your congestion percentage so that you don’t under- or overpack your shelves.
Let’s take the example of DotActiv’s software.
By placing your data-driven planograms onto your floor plan in the software, you can go about determining your category flows. Using the Highlights feature, which looks at your retail data, you can group similar categories, spread high-performing ones out evenly across your store to prevent floor congestion, and create a floor plan that pulls your customers through your store.
2. Is your category management software going to integrate with your POS system?
As we’ve noted in the previous question, your final floor plan relies on the data in your planograms to determine how much space each of your categories should receive.
That said, before looking at implementing floor planning software, you also need to ask yourself if you’re going to integrate your category management software with your Point of Sale (POS) system.
Here’s why it’s crucial: if your database isn’t linked to your POS system, it is going to be very labour-intensive to determine how much space to allocate to each of your categories. You also run the risk of running into accuracy problems. Since your space allocation is determined by your sales and unit movement, it’s important to point out that, at its core, the space given to your categories is partly determined by what and how your shoppers buy.
For example, if your sales reflect that Product A sells well, you’d look to give it the space it deserves according to its sales contribution to the category. Meanwhile, you’d decrease the facings or space for Product B or C which isn’t performing as well.
Fortunately, an action as simple as integrating your category management database with your POS system can help you make better business decisions which are based on clean and reliable retail data.
If you’re interested in the integration process that DotActiv follows and how we drive inventory replenishment, while not exhaustive, this piece gives a brief explanation. In short, DotActiv has an application known as the Data Import Utility, which imports data from SQL staging tables.
Meanwhile, there is also the Planogram Import Utility, which imports space planning data. After collecting all your causal data from your planogram, the data is then written directly back into your DotActiv database.
3. Do you know your store and fixture measurements?
Regardless of the products you sell or the size of your store, it’s vital that you know everything there is to know about your store.
This includes the actual square metre footage of your retail floor space as well as the dimensions of each fixture that you use. Or, at least, those that you hope to use if you’re opening a new store.
The reasons for this should be obvious. It’s almost impossible to build a floor plan without knowing how much space you have available to you. Even if you use the most sophisticated floor planning software out there, you’ll struggle. More than that, without the right dimensions, you won’t be able to create accurate planograms. In fact, you won’t even know where to start since it affects your space allocation.
Book a personal consultation with a DotActiv Account Advisor to talk about your floor planning needs
Let’s say, for example, that you’re using DotActiv’s software, and have created a floor plan that measures 100m x 50m. Along with that, you’ve estimated that each shelf is 91 centimetres wide. However, in reality, your shelves are one metre wide. Come the day of implementation, you’ll soon find out that you have space that you’re not using.
The fact that it might not be a lot of space isn’t the point. It’s space that you could have used to sell more product and thus please your customers. However, you’ve wasted it because you’ve failed to ensure your floor plan is an accurate representation of your real store.
Something like a Fixture Report can help you here.
Such a report allows you to measure and capture the fixture dimensions of your store. These dimensions include your gondola height, which helps you to determine how many shelves would fit into a gondola drop as well as the acceptable merchandising height. Meanwhile, capturing the shelf length, width and depth will assist you in determining the number of facings to fit lengthwise.
4. Do you understand your category roles?
Understanding the roles of your different categories in-store plays a vital part in your success as a retailer. After all, these roles give your business direction on which tactical strategies to follow and which not to.
For the sake of clarity, here are the four major category roles: Destination, Routine, Seasonal, and Convenience. As we’ve mentioned before in other articles on this blog, you can choose to stock a variety of different categories, each with different roles. Or, if you want, give all of your categories one role.
For example, if you’re an FMCG retailer, you might want your Meats category to take on the role of Destination so you’d want to stock a broad and deep product range. You also want to follow a strategy to match that like: Traffic Building or Excitement Generation. Meanwhile, you might also want to give your Barbeque Accessories category the same role.
On the other hand, if you’re a smaller retailer, you might want to pick one category and give it a Destination role, while the majority of your other product groupings follow a Convenience role. It’s up to you and what you want to achieve as a store.
As for the consequences of not knowing your roles, here’s one: the result is you’ll have a planogram with no clear objective in your floor plan. In other words, it will be nothing more than a pretty picture. At the same time, the category will fail to drive the strategy, which will mean a loss in sales and business growth.
Another consequence is that your store layout will be haphazard, at best. That’s because each of your categories won’t reflect the specific role that you’ve given them.
Let’s say that you also stock Dairy products and have given this category a Destination role too. However, you’ve placed it in the wrong area of your store. For example, you’ve put it at your store entrance instead of at the back of your store. Or worse, you’ve failed to give it enough space to show your customers that you have all their Dairy needs covered.
That said, if you are struggling to understand your category roles, it’s worth asking your buyers or merchandising team for help. More than that, you can also analyse your sales data to find out how each category is contributing to your store. By determining your profit margins, stock movement, sales value and so on, you’ll have a better understanding of what is going on in your store.
More importantly, you’ll know which role best suits each of your product categories.