18 May 2018

“Smart” planogramming increased sales in Karusel stores

Moscow, 18 May 2018 — X5 Retail Group N.V. (“X5” or the “Company”), a leading Russian food retailer (LSE and MOEX ticker: FIVE), has introduced automated generation of detailed planograms for stores, which, after three months of use, has helped to boost sales by up to 10.5% in some categories.

For example, Karusel achieved y-o-y growth in sales of 3%–8% in associated goods, 5% in tea and coffee, and 10.5% in shaving products thanks to planograms covering the maximum quantity of products of a given category down to individual SKUs. Each product’s location on a shelf is determined based on customer experience and the chain’s merchandising rules.

In addition to higher sales, detailed planograms contribute to lower operating costs by helping to optimise employees’ work, monitor assortment and adapt it when needed, refine logistics, and maintain sufficient inventory to ensure shelf availability.

The technology uses in-store equipment characteristics, customer preferences, historical data on inventory turnover by type of product, assortment by category, packaging size and type and other inputs. It enables automated generation of layout arrangements for each rack and prompt adjustments to them.

The technology employs JDA Software, enhanced by customisable settings to reflect each hypermarket’s layout principles. Planogram generator pilot testing was completed in December 2017, and today it is used on an ongoing basis, automatically producing solutions for the beverages category in 30 hypermarkets, and for the laundry detergents, coffee, tea and vodka categories in 59 hypermarkets. ​

By the end of 2018, up to 100% of grocery, confectionery, associated goods, alcohol, beverages and pet goods in all Karusel hypermarkets will be covered by the planogram generator. By the end of 2019, the format plans to roll out enhanced planograms for up to up to 90% of the assortment and introduce automated layout controls to match the planograms.