How to decide the right Merchandise Mix in a FMCG Store

Usually the large format stores like BigBazaar, Spar, Hypercity, Foodworld, Spencers, More, Smart Retail carry a variety of merchandise to cater to all categories of buyers who enter these stores to satisfy their monthly shopping needs. It is important to understand how these retailers decide their category mix inorder to cater to every customer segement to prevent any lost sale opportunity or disappointing a customer with an Out of stock situation


Lets see the typical category mix of such a Store
Categories included to form the Assortment of a super market mainly includes Food, Non Food, General Merchandise and Agri Business

Composition of these categories are usually
1. Food - 30% of total sales
2. Non Food - 20%
3. General Merchandise - Usually in the range of 5%
4. AgriBusiness  - Forms 48% of Total Sales
Food Category includes following subcategories
1. Fresh / Frozen - These are mainly daily delivery products like Butter / Batter / Eggs / Icecream excluding vegetables
2. Processed Foods - like Ready to Eat/ Readymade items like Maggi, MTR, Jams, Sauce excluding Atta products
3. Impulse Items - like Namkeens, Biscuits, Cookies and Chips
4. Beverages - This category has deeper classification like

• Aerated Drinks - Pepsi / Coke
• FruitPulp drinks - Frooti / Maaza
• Health Drinks - Redbull / Gatrode
• Citrus Drinks - Nimboos
• Milk based Drinkss - Flavored milks, Soy Milk
• Tea and Coffee

Non Food Category Include
Personal  and Oral Care - like soaps, toothpaste, hair oil, shampoos etc
Household - like Washing Powders / Bars, Bleach and Liquid wash and Toilet care
General Merchandise - include Plastics, Steel, Scrubbers and Stationary items
Agribusiness includes Vegetables, Fruits, Ghee, Oils, Rice, Flour and Pulses
Cheers
Arroon
Spacedpractice.com

Key points to consider while preparing a Planogram

In my opininion following are the key points which any Space Planner should consider while designing a Planogram to ensure its maximum efficacy and increase the Planogram Productivity

Planogram Example

1. Planogram should consider the attributes of the product being placed in the shelf which considers customer tastes and needs mainly - Brand, Product Size, Taste or Flavors, Color and most importantly Price point.
2. Physical dimensions of Section, Shelf and Products like Height, Depth and Width
3. Linear Shelf Space, Number of Facing Allocations, SKU Visibility and Shelf Stock Capacity
4. Market Share of Product in Region, Store as well as overall market
5. Sale Spread across week days which identify market trends and improve shelf stocking movement.
6. Product adjacencies, Secondary placement and product switching helps improve upsell / cross sell opportunities and increase affinity selling between true affinity products like tooth paste with brush or artificial affinity products like Coke / Pepsi with Kurkure
7. Finally Product placement on shelf should consider sub category representation of Traffic builders, Profit generators, Stars and Image enhancers.
Incase I missed out any input pls post your comments


Cheers,
Arroon
Spacedpractice.com

Are you getting your Promotions right!!!!

Majority of Retail Promotions do not yield the expected returns. A recent discussion on my Linkedin group - Retail consulting guide posted by one of the members says - “60%(of retailers) had inconsistency across in-store and online promotions". Some of the reasons listed in this discussion why cross channel coordination is one critical piece of retail profits:

1. Enhances Brand Reliability
2. Makes Marketing Promos More Effective
3. Increases Reliability of Marketing Metrics & Decisionmaking
4. Reduces in-Store Customer Service 
5. Creates Coordinated Marketing  
6. Enables Effective Localization
Key Parameters to measure Promotion Performance are Returns on Promotional Investment and the Lift that the promotion generates in terms of Sales, Margin and Transaction.

Check list to consider while designing a Retail Promotion which can ensure success may be
1. What is the overall strategy the promotion must support and what specific goals do we want to achieve?

2. What is the best platform for the promotion - which categories, brands and products?

3. What is the best offer (e.g., price discount, “two for one,” etc. for the promotion?

4. Where should we run the promotion – in all stores, in some stores, in some departments in some stores?

5. When, and how often, should we promote?

6. What is the best way to communicate the promotion? What is the right combination of media, shelf

location,external signage, in-store displays, etc.?

7. How can we ensure the promotion generates a return? Is the minimum expected lift in sales realistic? Do we need vendor support? Are there longer-term benefits that outweigh shorter-term metrics and if so, what are they?

8. How will we monitor performance so that we can refine and improve future promotions?

Cheers,
Arroon
SpacedPractice.com