In simple words, Days Of Supply can be understood as the number of days a product is expected to last before it is restocked. It is often evaluated against a monthly or quarterly time frame. A proper understanding of movement of stock on shelves is crucial for retail success. Not only does it help in pleasing customers, it also helps retailers understand how many days the current stock will last based on sales data and customer demand. So, what can retailers do to ensure optimum levels of Days Of Supply? The answer is planograms!

Planogram is a visual merchandising tool used by retailers to plan, develop and implement a store’s merchandising strategy. It provides diagrammatic representation of the store layout, assisting retailers in appropriate product placement for increased visibility and sales. A well-designed planogram ensures that the right products are available at the right time and place to increase profitability and provide favorable shopping experience to customers.

2 Major factors that influence Days Of Supply:

1. Seasonality

If you run a retail store, you will be aware that there are some products that are sold throughout the year while there are others that are sold seasonally. Commonly referred to as seasonal inventory, demand for such products tend to fluctuate depending on weather, events or holidays during the year.

For example, holidays such as Christmas, Thanksgiving and Halloween are big drivers of seasonal goods. During such seasons, there is increased demand for Christmas decorations, gifts, Halloween costumes and other relevant products. Thus, these products will have lower Days Of Supply, since they tend to be sold out quickly.

Here, creating seasonal planograms will be an ideal option which ensures that the DOS remains at an optimum level all through the year. Such a planogram will provide insights about that particular time frame so that the stocked order will be in proportion to customers demand.

2. Out of Stock

Out of stocks have a huge impact on days of supply. Let’s take an example to understand how. Assume that a retail store sells 100 units of coffee a month and it is in demand all through the year. At present there are 50 units of it on the shelf, so DOS is 15. But what happens if they run out of stock for two months of the year. Here the number of units sold will reduce from1200 to 1000. This means the Days Of Supply increases.

Not tackling out of stocks would mean losing sales and disappointing customers resulting in reduction in overall profit and revenue. The solution is to generate store specific planograms that optimize the facing based on demand in stores. Store specific planograms allow retailers to keep merchandising flow in line with category strategy thereby optimizing Days Of Supply on shelf.

So, what are the impact of generating effective store-specific planograms? Out of stocks will be reduced, which will increase sales. The products that are placed on the assortment will always be available for customers to buy. Additionally, fewer items will have too many Day Of Supply which is particularly important for fast moving consumer goods.

Overview of Nexgen POG

Nexgen POG is a robust and effective cloud-based visual merchandising tool. It’s an affordable and easy to use planogram builder and offers unlimited licensing models to support large teams. It offers a vast array of features like customizable template, bulk upload of images, easy report generation, online sharing and much more. Anyone from an expert to novice can create planograms that will increase product visibility and sales- making it a highly preferred choice for brands worldwide.

                                                        Get Your Free Trial Now