Planogram Compliance Perfection with the Latest Technologies and AI

It's a classic scene: the central office creates store planograms and sends them to retail outlets for execution. Somewhere along the way, gaps that negatively impact sales and inventory management often occur. The reason may be that planogram compliance checks are not done or thorough enough. Let us explain how modern AI-based solutions effectively eradicate this problem.

Key Takeaways

Achieving perfect planogram compliance is crucial for optimizing shelf space and enhancing product visibility. The integration of AI technologies helps retailers maintain accurate product placement, ensuring compliance across multiple locations. The following key points highlight the role of AI in improving planogram accuracy and efficiency.

• Planogram compliance is key to maximizing shelf space. 

• Technology like AI improves planogram accuracy. 

• Regular audits ensure product placement stays aligned. 

• Automation reduces human error. 

• AI tools provide real-time adjustments for efficiency.

The explanation is simple: planogram compliance is the extent to which a retail store or outlet adheres to the planogram requirements set by the chain's management.

We know that the purpose of a planogram is to strategically place products on shelves in a way that maximizes sales, improves the customer experience and customer satisfaction, and prevents stock-outs or shortages.

But there is a problem: even in well-established networks, planograms deviate from the plan. A study by the National Association for Retail Marketing has confirmed that the average deviation is about 10% per week.

Why are well-planned planograms not fully implemented and even ignored by outlets sometimes? These are the most common challenges:

The most common problem. Whether deliberately or due to fatigue, store employees misinterpret the requirements for filling shelves and make minor or even severe mistakes in retail execution.

Obviously, if inventory management is not well established, shelves in some places cannot be filled according to the planogram.

Shelf-filling solutions need to be updated as product packaging design, size, and volume constantly change.

Throughout the day, customers intentionally or unintentionally move goods on the shelves, disarraying the space. The problem is that the store staff might not notice and fail to rearrange the items in time.

If the store staff is not trained and does not understand the importance of planogram compliance, they are likely to ignore the requirements or not take store operations seriously.

Even though the future is already knocking on the door, many retailers still use traditional methods of planogram compliance control.

It would go like this: store managers create visualizations of planograms and step-by-step instructions. At the outlets, they print them out and distribute them to the responsible staff. Then, representatives of the central office with checklists regularly visit the chain's retail stores and personally check planogram compliance. This is a very costly way of ensuring compliance. 

This method allows for control without a personal visit. After meeting the planogram's requirements, the store staff takes pictures of the shelves and sends them to the central office. There, responsible employees compare the results with the layouts to identify discrepancies. The problem is that this also involves a lot of manual labor, and there is no way to monitor the shelves dynamically in real time.

The issues of traditional methods have provided the impetus for the emergence of new ones.

There are plenty of special software solutions on the market to optimize the process of developing planograms, implementing them, and monitoring them. These solutions can be integrated into an existing inventory management system, which avoids the problem of shortages or surpluses. It is also worth mentioning mobile applications that make it possible to report on the fulfillment of planogram requirements and monitor it using tablets or smartphones.

The software has greatly improved the accuracy and efficiency of planogram compliance. The development of AI has also greatly contributed to this. For example, the system can now check the compliance of photographed product displays on shelves instead of a human. Planogram compliance computer vision is an image recognition technology that automatically compares the actual filling of shelves with planogram specifications. Image recognition is a promising area: the market is expected to reach $3.7 billion by 2025.

Artificial intelligence can process huge amounts of information coming from various sources: not only photos of planograms but also inventory data, sales reports, etc. Using machine learning technology, the system can predict possible problems, give recommendations on the placement of goods, and track this process in real-time in all stores of the chain.

The LEAFIO Shelf Efficiency system is a comprehensive solution for retailers in setting up processes: from inventory control to forecasting. The ecosystem includes innovative visual merchandising software called Shelf Efficiency. It provides effective management of micro and macro shelf space, automatic generation of planograms, and efficiency analysis.

For planogram compliance, there is an effective planogram recognition function that works based on artificial intelligence. It can detect any problems with planogram real-time compliance and signals assign tasks to the store employee to fill out the planogram and generate a report to the head office.

Planogram maintenance vs compliance, are they at odds? In reality, they are two sides of the same coin. After all, keeping data up-to-date and effective, implementing it correctly, and complying with requirements are all integrally linked activities. Modern AI-based software solutions help to combine and implement these areas efficiently.

Want to learn more about the benefits LEAFIO AI will bring to your business? Request a free demo and consultation with our experts.