Convenience Store Merchandising

global retail
  • Apr 10, 2023
  • 7 min read
Cover: Convenience Store Merchandising

For several years there has been active growth in the convenience store segment. Shoppers increasingly prefer small stores, where shopping time does not take more than half an hour. The time factor has become more important than the price factor. In trying to provide their customers with the necessary range of goods and create a cozy "home" environment, small stores are successfully competing with super and hypermarkets. The number of such stores is growing rapidly, trying to take advantage of the favorable situation and gain a foothold in the market.

Scaling up, convenience store management companies face growth challenges that they are sometimes completely unprepared for. With each new store, issues related to the management of merchandise display for convenience stores become more and more acute.

  • How do you fit an assortment onto the shelves of all your stores?
  • How to use every inch of the sales floor, since there is so little space?
  • How do you quickly get the word out to all the stores about changes in merchandise display when there are so many of them?
  • How do you make sure that all the products are on the shelves?

These issues can be solved by qualitatively built convenience store merchandising. Development of planograms in which each product has its place, centralized management of merchandising in stores, control over the execution of planograms and multi-level analytics - these are the main components that will help to optimize the company's time and resources in the process of working with the layout of goods in a convenience store.

An automatic merchandising system will serve as a handy tool. Until recently, such systems could afford only large chains of super and hypermarkets, because the implementation of such a system required significant financial and intellectual resources.

With the development of modern cloud-based IT solutions, innovations are becoming available to businesses. Now even a small company can afford a modern merchandising system. Rental payment for such a system is made monthly, training of the program, implementation in the business processes of the company is made with the help of a team of professional consultants. daily support does not leave the client alone with problems and a new software product. These factors significantly reduce the resources for the introduction of a new product, and the company receives a convenient tool for managing the layout of goods.

An example of effective use of an automatic convenience store merchandising system can be the company "A Good Shop". Qualitatively building business processes for goods display management, the company was able to answer several key issues encountered as a result of opening new stores.

How many items fit on the shelves?

Convenience stores have a big problem they need to solve. Their main issue is deciding what products to put on their limited shelves. Unlike bigger stores, they can't fix mistakes by just using less shelf space. Also, because they usually don't have warehouses, even a small mistake in choosing which products to stock can lead to having too much of some items or not enough of others, which can drive customers away.

"A Good Shop" has answered this question. Given the size of the goods, the parameters of the racks in the stores, they developed planograms, where each product has its place. Through the use of specialized Leafio software, the process of creating a planogram did not take much time.

Item-by-item planograms made it possible to identify the oversupply of assortment. Working with the assortment had a positive effect on the marketing value of the position on the shelf.

Despite assortment reduction, the marketing value of the position on the shelf increased by 40%, which shows that suppliers were also interested in working only with active assortment with its place on the shelf.

Remove merchandise that interferes with the operation of the store.

As a consequence of a wrongly defined assortment, convenience stores display merchandiser cases overflowing with goods that do not fit on the shelves. Warehouses and aisles are cluttered with merchandise leftovers, preventing employees from moving around the store and getting to the items they need. As a result, the goods on the shelves are not those that sell better, but those that are more convenient to get out of the warehouse or that get in the way in the aisles.

By optimizing the assortment by almost a third, the company "A Good Shop" was able to reduce inventory by 23%. According to the CEO, cutting the assortment and placing the goods on the shelves freed up storage space, reduced breakdowns (especially of beverages), and accelerated the processes of layout and re-checking. As a result, turnover of certain categories accelerated by 25-30%.

How to manage the layout at the same time in all stores?

Often in small stores, this function is taken over by store managers or even vendor sales representatives, who find it more profitable to solve their tasks of presenting the assortment, and then the store’s tasks. To achieve order on the shelves, you need centralized management of layouts.

How do you quickly get information about changes to stores from the central office? Calling a few dozen stores or writing letters to all of them is impossible to do in a day. But the stores need to be under control to be sure that:

  • the best products are on the golden shelves; 
  • the first price product is always the first on the shelf; 
  • that stores are similar to each other, etc.
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A modern merchandising system solves these issues. Stores are automatically notified of display changes, and they always have access to the latest, up-to-date planograms, including on a smartphone or tablet. With the mobile app, it’s easy for stores to give feedback on layouts by simply taking a picture of a shelf on the sales floor and marking it as done on a smartphone. The process of sharing information between the office and the stores is no longer manual, thereby freeing up a significant amount of work time.

An analysis of the convenience store layout

Everyone understands the importance of analytics in any company’s business process. Analysis of convenience store design layout is no exception. What sells and what doesn't, what goods does the company earn, what goods act as anchors, and how much space should be allocated to these goods in the salesroom? In fact, for analysis, you need to unload reports from the accounting system, collect data on the layout from stores, bring it all together, and then try to analyze it. All this is quite a time-consuming process.

As for convenience store merchandise, if you are in the market, such analytics is especially relevant because it helps you keep track of unsold goods and categories and reduce their display space on the sales floor in time. This makes it possible to react to customer needs and expand the assortment that is really in demand.

In a modern merchandising management system, the analysis of convenience store merchandise display is performed directly in the Leafio planogram optimization program, allowing real-time assessment of the effectiveness of product placement in the context of groups, categories, etc. An important difference in this analysis is the calculation of performance indicators, taking into account the occupied space on the shelf of each product.

Solving these key issues helped “A Good Shop” to optimize the use of the working time of the central office staff. The main factor was that the Leafio merchandising software made it possible to do much of the work using a computer. Shelf space calculation, analysis of product sales and product placement efficiency, communication with stores - all this can and does be done by a modern merchandising program, thus allowing the central office to devote more time to studying the needs of its customers and creating a home atmosphere in stores - factors that create a competitive advantage and make the segment unique in the market.

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