A Good Store

“A Good Store” Retail Chain A Structured Merchandising For A Small Retail Chain

A Good Store

"A Good Store" is a small-scale convenience store chain. The assortment is based on food products, as well as on-site cooking - about 6,000 SKUs in total. 

"A Good Store" is a small-scale convenience store chain. The assortment is based on food products, as well as on-site cooking - about 6,000 SKUs in total. Growing competition is pushing all retailers to service level improvement and product range expansion. The decision was made to redesign the merchandising approach so that customers always find the right product on the shelves and improve customer satisfaction.

Challenge: Layout Redesign

The limited retail space and the product range are the main bottlenecks of all small stores. 

Super and hypermarkets are more adjustable to the product range variety than small retail stores. As there are no warehouses in convenience stores, an inaccuracy of just a few SKUs in each of the categories leads to either overstock or to an outdated assortment and customer outflow. Due to that fact, the management made a decision to implement the Leafio Planogram Optimization – a merchandising management system with a wide range of functionality that covers all merchandising management tasks. The system implementation is quick, efficient, and meets international project management standards.

The retail chain initiated manual labor minimization which caused planning and implementation layout errors.

Merchandising Management System Implementation

The project kicked off with the client's accounting system integration to the LEAFIO Planogram Optimization. An automatic exchange was set up according to the nomenclature data, stores, product range, sales, and photos. The full product information and the real-time layout were the main points of the system.

Next, a test category Drinks was designated for planograms. There were two main stages of the planogram development for the Drinks category.

  1. The fixtures were created in the Equipment Designer according to the parameters actually used in the store;
  1. Then, a positional planogram for Drinks was developed based on the created equipment for the current product range, corporate blocks layout, and meeting the company layout principles.

The immense work was done with the good's photos and dimensions taken from suppliers upon the implementation team's request. Loaded into the system, planograms turned out to be visually informative and accurate. The goods received a proper layout and the program automatically displayed each SKU on the shelf stock.

Further, planograms for other categories were written: alcoholic beverages, dairy products, confectionery, groceries, and household chemicals.

Project Results: Merchandising Automation

The crucial project achievement is the updated product range developed by planograms. The system now identifies categorized overstocks and reduces balances. The company has initiated the process of inventory balance minimization and a frozen capital release.

Thus, the assortment was optimized by reducing the SKU number by 35% in the Drinks and Alcohol categories, which led to a reduction in product balances by 23%. The Drinks category turnover accelerated by 30% while the Alcohol category turnover - by 25%.

The developed positional planograms generated the goods layout visualization in stores, and corporate blocks display, making the planogram an effective tool for communicating with suppliers regarding marketing budgets.

Thus, the marketing value layout indicator has increased by 40% in the categories of Drinks, and Alcohol.

Stores have received a convenient and comprehensive layout planogram. The mobile application has enabled managers to receive tasks in a handy manner. Overall, the company accessed a credible tool for layout control.