Looking for ways to implement effective macro space planning in category management?

Looking for ways to implement effective macro space planning in category management?

May 03, 2023 | By HIVERY

Effective macro space planning is essential for retailers and consumer-packaged goods (CPG) suppliers. It involves organizing products in-store to maximize sales and enhance the customer experience. The goal is to create an appealing shopping environment that drives traffic, improves customer satisfaction, and increases revenue. This article will discuss best practices for macro space planning in the CPG industry.

1. Understand Your Customer and Store Layout

The first step in macro space planning is understanding your customers and store layout. Retailers and suppliers must analyze the demographics of their target audience, purchasing behavior, and preferences to determine the ideal product placement. They should also consider the store layout, including the location of high-traffic areas and the flow of foot traffic.

2. Analyze Store-level Sales Data

Analyzing sales data at the store level is crucial in macro space planning. Retailers and CPG suppliers can use this data to determine the most popular products, identify sales trends and consumer preferences, and make informed decisions. By analyzing this data, they can allocate more space to high-selling products and reduce or eliminate less popular ones. This analysis also helps identify opportunities for cross-merchandising and promotions. Store-level data, such as sales, product information, and store attributes, is used to gain precise insights. By providing a product assortment that aligns with customers' needs and preferences, retailers and supplier partners can improve the shopping experience and increase shopper satisfaction. This approach has been proven to work in over 100 categories and retail combinations. It ensures that the right products are available in the right stores, regardless of the company's number of clusters.  At HIVERY, we are all about unlocking each store's potential; it's why Hyperlocal retailing has been our philosophy; read more about this here.

3. Optimize Product Placement

Product placement is another critical aspect of macro space planning. The goal is positioning products to maximize their visibility and accessibility to customers. Retailers should place high-demand products at eye level and in the most prominent locations, such as end-caps and center aisles. Lower-demand products should be placed in less visible areas or grouped to make it easier for customers to find them.

4. Use Planograms

Planograms are visual representations of how products should be arranged on shelves and displays. They help retailers and CPG suppliers to optimize product placement, improve store layout, and enhance the shopping experience. Planograms should be regularly updated to reflect changes in sales data and trends at the store level and up.   It is acknowledged that due to operational cost and complexity, many retailers and suppliers limit these to a few resets per year. You can do this more often with technology like AI and HIVERY Curate. You can accelerate this analysis and take action in a market where it matters. Not all stores need to change, just the 10% that generate 80% of your growth. AI can identify this and maximize your value and time to market.  Another strategy is simply reoptimizing existing store clusters leveraging store-level data insights. In our experience, we have seen planogram draw count reduced while revenue increase simultaneously; see this blog post: Assortment strategies that generate smarter store clusters & planograms. 

5. Consider the Category Management

Category management involves grouping products into categories based on their sales performance and consumer demand. It helps retailers and CPG suppliers to identify the most profitable product categories and allocate space accordingly. Category management also helps to minimize out-of-stock situations and reduce product spoilage.

6. Utilise Technology

Technology can greatly improve the efficiency of macro space planning. Retailers and suppliers can use software and data analytics to analyze store-level sales data, identify trends, and optimize product placement. They can also use technology to create virtual simulations of store layouts and test different product placements before implementing them. This software helps to reduce labor costs and improve efficiency in macro space planning.

7. Prioritize Customer Experience

The customer experience should be a top priority in macro space planning. Retailers and CPG suppliers should consider the store's layout, lighting, and ambiance to create a welcoming environment that encourages customers to shop. They should also ensure that products are easy to find, properly labeled, and well-organized.

8. Monitor and Adjust

Effective macro space planning is an ongoing process. Retailers and suppliers must monitor store-level sales data and adjust product placement accordingly. They should regularly review planograms and make necessary changes based on sales data and customer feedback. Again, in reality, this is far more complicated than it sounds. Preparing planograms and executing them in stores can be both operational cost and time-consuming, with many retailers and suppliers limiting them to just a few resets per year. With technology like AI and HIVERY Curate, planogram creation can be automated and just focused on those few retail stores that generate a bigger bang for the buck and set contraints/rules like limiting product churn to, say, 2% or 5%.  With HIVERY Curate, we have helped many clients identify specific stores and set rules around limiting product churn to limit pack-to-operational costs.

Maximize Your Sales with Effective Macro Space Planning

Effective macro space planning is essential for the success of retailers and CPG suppliers. By using store-level sales data analysis, planograms, category management, and space optimization software, you can create an appealing shopping environment that maximizes product visibility and accessibility. Prioritizing the customer experience is also critical in macro space planning. By following these best practices, you can maximize your sales and stay ahead of the competition.

Connect with our team of experts and explore the benefits of using HIVERY Curate as your reliable co-pilot. By leveraging store-specific data, you can elevate your strategy with tailored assortment plans that cater to local tastes, are expertly showcased, and streamline store operations.

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