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The following text is a fictional narrative, but it provides real information intended to highlight the practical benefits and strategic impact of one of our IVADO Labs solutions, addressing the challenges of merchandising and customer experience in retail store aisles.

Retail&Cie at a Crossroads

Anthony is the Director of Operations at Retail&Cie, an international hypermarket chain. His leadership has enabled the company to grow, but this growth has also brought complexity, particularly regarding the effective use of space in Retail&Cie stores.

In a setting where every square centimeter of commercial space must be maximized, mistakes that impact how products occupy retail space are costly. They can spread quickly and have a negative impact on hundreds of locations.

Optimizing space across hundreds of stores is an increasingly complex puzzle. Generic solutions for merchandising and space layout with a one-size-fits-all approach are insufficient, and it is humanly impossible to provide personalized attention to each store. Customer experience and profitability are at stake, as well as the brand’s reputation.

The Challenge of Space Optimization

Sophie, the head of merchandising at Retail&Cie, has always relied on merchandising guides, also known as planograms, to guide store layout. These planograms indicate product placements on displays and have served Sophie’s team well up until now. The visual merchandising team typically creates a few prototype planogram versions, which are then applied to several similar Retail&Cie stores.

However, as the company grows, the limitations of these planograms are becoming more evident. Since they are based on average sales of stock-keeping units (SKUs) across multiple Retail&Cie stores, they don’t account for the speed at which these SKUs sell or the unique assortment differences in each store. This mismatch may explain the recent increase in lost sales reported within Retail&Cie.

Moreover, Sophie read this study about customer behaviors when faced with stockouts, and the results concerned her: around 10% of customers won’t substitute the product with another brand and will end up not buying the item at all, while about 30% will go to another store to buy the same item. Overall, stockouts can lead to a 4% loss in sales! Furthermore, Sophie suspects that this same misalignment issue may be causing an increase in operational costs related to restocking.

She wishes that the planograms could adapt quickly enough to the constantly changing customer behaviors and localized sales trends. But with hundreds of stores to manage, she feels like she’s playing 3D chess on a continental scale!