The POG Department represents the distinct department zones in a store, which broadly demarcate different types of merchandise being sold at the store. They depend on the type of retail format, customer shopping patterns, type of merchandise, and product packaging. In effect, planograms used vary from retailer to retailer. Within an electrical retailer, printers and print cartridges would likely be different categories, but they would often be merchandised in the same planogram. For example, within a grocery department, the dairy category may include milk, eggs, and butter, but these would likely be merchandised completely separately, owing to the different types of fixture that each requires. Retailers tend to use a planogram hierarchy when merchandising a store, as opposed to the product hierarchy, although these are often very similar. These levels are synonymous with Department, Category (or Class), and Sub-Category (or Sub-Class) in a product hierarchy. There are three levels of the POG hierarchy defined in the application: The POG hierarchy defines the way products need to be physically merchandised in a store. The images in the following figure show a sample POG and actual product shelves used to physically merchandise the products in a store.įigure 5-2 Planogram and Product Shelves in a Store Planograms are used to define how different products are physically merchandised in a store. Therefore, there is a need to transform PROD hierarchy-based targets to the POG hierarchy and transform the POG hierarchy-based optimization results to the PROD hierarchy.Ī POG is a visual diagram indicating the placement of products on shelves and fixtures in a store, so as to utilize the available space optimally and catalyze customer purchases. The POG hierarchy represents the store layout the way a store's selling area is structured and depicts the front-end of the store as presented to the customer. MSO uses the Planogram (POG) hierarchy in place of the traditional Product (PROD) hierarchy. Note that MSO is conducted prior to the assortment planning and optimization activity so that the assortment plans can be made in alignment with the allotted space to sub-categories. At the cluster and trading area levels, the recommendations are presented by aggregating data from the store level.įor more information on Space Profit tables, see "Manage MSO Tables Step" in Chapter 3. It uses an algorithm, which runs at the store level, to recommend optimum space to a department and sub-category. MSO can be conducted at the store, cluster, or trading area level. Space Profit tables are also referred to as space profit elasticity curves, which are derived using Advanced Science algorithms. These tables are used to store a relationship between the allocated space and respective gross profit returns at the retailer based on historic data. Space Profit tables form the basis of MSO and are maintained by an administrator. Optimal space allocation for a fixed gross profit goal.īefore beginning Macro Space Optimization, the following requirements should be met:Īn approved category plan should be in place.Ī merchandise financial plan needs to be imported from Oracle Retail Merchandise Financial Planning (MFP).Ĭurrent space information needs to be imported from a space planning application.įigure 5-1 Category Management Process Flow Gross profit maximization from the available space at the retailer. Optimal space allocation is based on the following two principles: This needs to be defined at the time of application installation. The unit of measure for space can be linear units (feet, meters, and so on), square units (square feet, square meters, and so on), or cubic units (cubic feet, cubic meters, and so on). Space in MSO context refers to the floor area, fixture-space, and shelf-space at the stores used to display merchandise in the selling area. It has a cost associated to it and needs to be utilized efficiently. Just as with merchandise buying budgets, space is a key resource in Category Management. With Bossa Nova Image-Based Analytics, you can provide real answers-not just estimates-to your retail and CPG clients.Macro Space Optimization (MSO) is used in Category Management to allocate optimum space to a department or sub-category. For example, clients can compare metrics such as planogram and promo execution across stores and regions. Our product data enables clients to analyze how well their products are performing, including comparisons. How do we do this? Bossa Nova provides detailed product data for every image, including metadata. Leveraging Image-Based AI Analytics in your field or workforce management mobile app allows you to give your retail and CPG clients superpowers: that is, x-ray vision into the real-time status of their products, promos, planograms, shelves, stockrooms, and inventory. Let your clients see exactly what a shopper sees.
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