Picture perfect

Not yet utilised in Australia by the majority of the apparel sector, planogram software makes a store's selling space more productive. Samantha Docherty looks at the untapped market of visual planograms.

A picture paints a thousand words. According to merchandising experts 70 per cent of a customer's buying decision is made on the look of a store. A customer will decide within 60 seconds of seeing a store whether it is appealing enough to walk in. Now more than ever, merchandisers are focused on developing effective visual merchandising plans that maximise profits on a store-by-store basis.

The growth of fast fashion means more collections are arriving in-store regularly making it difficult to keep on top of a well-merchandised store. Not unusual for retailers to have new deliveries coming in fortnightly, product lifestyles are becoming much shorter. The polished presentation of this product through visual merchandising is critical in reaching maximum sales.

Visual planogram's are a useful tool in accurately understanding the best options of product distribution and placement.
Replacing words and numbers - those easily misunderstood snippets of communication - visual planograms offer images everyone can understand and no-one can misinterpret.

The software enables retailers to see where products or merchandise should be placed on a shelf or rack so it is appealing to the consumer. Minimising wasted space whilst maximising the amount of merchandise on the shelf pictorial planograms illustrate "the look" and identify of each product.

Visual planogram software in Australia is not widely offered in the fashion industry. Complicated due to fixtures and shelving being changed regularly, the European and American markets have overcome these hurdles with the use of software such as Mockshop.

Creating a virtual 3D 'shop floor' and planograms by inputting a store's physical dimensions, its merchandising and display units and layout Mockshop is designed specifically for the fashion industry.

Created by Netherlands-based business Visual Retailing, it provides the ability to build stores of any size and shape and produces floor layout planograms that are easy to read and execute. Individual photographed components of the range of products to be stocked are either scanned or imported from CAD sketches and 'placed' in the virtual store model.

It can recreate the stores own fixtures within the system and behind every fixture is a planogram with the data of product and how many will fit. It even changes the in-store displays week by week.

The company has recently completed a major project with jeans group Lee and Vans in Europe. Other clients include Germany's C&A, Macy's in the US, O'Neill, Nautica, Kipling and The North Face in Europe. Receiving interest from Australian retailers at EuroShop 2008, an unidentified Australian fashion chain also looks set to pick up Mockshop's solution. Visual Retailing managing director Bartel Huibregtsen says brands should be thinking about in-store presentation when designing their collections.

"The retail landscape is changing from product selling to concept and co-ordinated selling. Shopping is now an experience. Australian retailers all know the next step in retail is to optimise the shop floor. The only way is with planograms. When you are a bigger retailer you want to optimise the store type and you want to be able to adapt more to store types."

Planograms are critical in having a streamlined and uniform look across all Big W's stores according to planogram department manager Ian Field. "Significantly they enable the footage to be utilised to the maximum and enable a number of reports to be generated to measure sales and profit by footage allocated."

Using pictorial planograms that illustrate "the look" of a certain section Big W currently complete around 20 per cent of planograms as live image planograms, with more planned.  "[Pictorial planograms] have a much higher compliance rate than text planograms", says Field. "Estimated at 90 per cent plus compliance in stores, this is generally due to a very quick visual of how the layout will look once completed and is basically the front page of a jigsaw that just needs to be followed."

Easier to read, visual planograms enable accurate shop floor execution. The improved merchandise presentation also produces increased sales conversations, higher transaction values and a more consistent brand image. Repositioning a slow selling item with the assistance of a planogram can also reduce the number of markdowns in-store.

Huibregtsen says store managers have discovered that laying out the shopfloor is achieved in half the time due to visual clarity of the programs. "The pictures of merchandise, fixtures and configurations make product recognition instant. There is virtually nothing for the sales assistants to misinterpret."

Frank van der Klaauw, CEO of O'Neill Europe, says before using Visual Retailing's systems O'Neill sales reps and store managers needed a university degree in mathematics and communication to effectively present the collection.

"Now we use pictures to communicate because as we all know a picture paints a thousand words. Our store merchandising documents are now visual planograms instead of lists of numbers and written instructions. Our range catalogues are visual instead of being spreadsheet print outs and internally we can see our ranges and retail propositions visually. Literally we can see it all at a glance."

From these components O'Neill can now build presentations every month by theme or all at once. "Try doing that manually with a collection of a 1,000 plus styles per season" adds van der Klaauw. "When we presented the power of [Mockshop] to our partners even our most stubborn distributors bought the program the same day. Now visual merchandisers and sales reps across Europe are discovering and enjoying the power and simplicity of Mockshop. We are now producing 40 planograms per week instead of two. That's only a 2,000 per cent productivity gain."

At Big W planograms assist in ensuring that the stores' space is planned as effectively and efficiently as possible and report on slow selling lines and those that require additional footage says Field.

"Every bay is planned throughout the store, even though stores do not receive specific planograms. For example, every apparel department has allocated footage for each class and this is then consistent across all stores. Buyers are aware of how much footage they have to buy for in each category whether it is knitwear or dinner sets."

Used from the start with the design of the store, to the equipment set up in stores, to the actual planning of merchandise, planograms are an important arm that finalises the plans says Field.

"Planograms are the tool that enables the buying family tree flow to be physically set up in every Big W store. This is the core of the buying plan. It ensures that planograms are set in a way that relates to our customer perception as being the logical flow of merchandise in Big W stores."

By Samantha Docherty