Artificial intelligence (AI) is gaining immense popularity in the retail sector because of its proven ability to generate a substantial return on investment. Apart from that, retailers also use the power of AI to analyze consumer needs and spending capacity, control inventory, improve returns and take better decisions. In a nutshell, AI is the perfect match for retail.

However, a point worth mentioning is that most AI techniques focus on information gathered from consumer data to provide recommendations and suggestions. They refuse to focus on the importance of the physical location of products, store layout and the overall organization of the store. One approach to do this is to create a planogram. Planograms are visual merchandising tools that dictate the location and quantity of products to be placed on a retail shelf. In addition to being a visual merchandising tool, they aim at optimizing every inch of the available retail space for increased profitability and sales. So, what happens when AI and planograms come together?

AI enables retailers to look at planograms in a new, innovative way. For instance, AI analyzes historical data gathered from a store to determine where each product should be placed, at what price and which promotion strategy should be applied to optimize sales. Similarly, maintaining and adjusting specific planograms manually is rarely a realistic option. AI helps in automating these processes, thereby saving an enormous amount of planning time and cost. These are just a few of the many benefits of incorporating AI into planograms.

Let us now look at some of the benefits of AI in detail and understand how it can optimize planogram and business strategy.

1.Accurate retail demand forecast: Undoubtedly, the ability to accurately predict retail demand is important for retail success. AI gives planograms the ability to learn automatically and improve its predictions using data alone. It helps in analyzing large volume of data to identify patterns in data for making better decisions. When AI is implemented the right way, it delivers benefits across different aspects of retail demand forecasting:

• Identifying recurring demand patterns caused by seasons or holidays.
• Predicting the impact of promotional strategies, price changes, or other internal business decisions.
• Foresting the impact of foot-traffic, local weather events, or other external factors

2. Real-time product ordering from warehouse: In order to reduce chances of out of stocks and ensure that the retail shelves are fully stocks, retailers need to correctly identify what product in which quantity should be ordered. Here, planograms use AI to predict the days of supply of each product and make ordering decisions based on business rules.

3. AI for better commercial decisions in retail: As mentioned earlier, AI algorithms play an important role in understanding customer’s needs and shopping patterns. This provides useful insights to retailers in deciding how to cluster products, categories and brands for higher buy-ins. Clustering products is very much beneficial in creating assortments tailored to local demand thereby optimizing merchandising decisions. Additionally, AI-based algorithms allow planograms to easily solve a complex optimization problems with high accuracy rates.

Overview of Nexgen POG

Nexgen POG is a robust cloud-based visual merchandising tool designed for easy and efficient planogramming. Being cloud-based software, users can create and share planograms anywhere, anytime from their desktop, laptop or even mobile phones. Additionally, it comes with an array of features including easy report generation and compliance, bulk upload of images, standard and customizable template that relieves you from the pain of creating planograms from the scratch.

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