By Invitation
Golden Rule II – Planogram and Processes for Replenishment of Non-fast movers
LRN has worked at senior level positions in companies like Eicher Motors, Hero Motors, Greaves Cotton, Ashok Leyland, and Hindustan motors. His last employer was Titan Company limited. Eleven years in Titan Company limited (eight years in Tanishq) and retired as CEO for the new business division. LRN was also heading the innovation council at Titan and was an active member of Tata Group Innovation Forum.
LRN had successfully spearheaded the TOC implementation in Tanishq retailing.LRN had started a school for Innovation in Titan and the school had produced over 400 trained innovators.
LRN also undertakes consulting assignments from corporate companies on Strategy, Retail excellence and Innovation. He has recently authored two books, a book on Innovation titled “The 9 Nuggets of Innovation” and a book on retailing titled “Demystifying Retail” – The Four golden rules.
Prabhakar Mahadevan, Founder Director of Strategy and Systems Consulting & Focus and Flow
Technologies Pvt Ltd
Prabhakar is a certified Theory of Constraints consultant (TOC) by Goldratt Schools Israel, certified expert on TOC by TOCICO (www.tocico.org) & is associated with TOC for the last 22+ years.
Through his consulting companies,Prabhakar and his colleagues are involved in several comprehensive TOC consulting projects across several industry verticals such as fashion jewellery, fast moving consumer goods, consumer durables, automotive OEM, capital machinery, pharmaceutical, heavy engineering, fashion retail etc.
In continuation of our article titled “The Four Golden Rules for securing retail excellence”, we am detailing through this article, the second Golden Rule: “Planogram and Process for Replenishment of Non- fast movers”.
While this article will detail the insights in to building an Ideal Planogram, we will be delving on “Replenishment of Non-fast movers” in our next article.
1. Background
A retailer carries varieties of merchandise covering all categories, subcategory, sizes, and price points covering the width and depth of requirements of his customer base. He is investing in the stock he holds, and the return on his investment comes from the sale of merchandise.
Planogram, meaning the stock mix of the inventory held, is the backbone of retail. The right width and depth of merchandise one holds is a key factor in determining his ROI. For getting this aspect right, one should engineer their planogram. Also, when you are holding less inventory, the lost sale opportunity increases because of walkouts. When you are holding more inventory, because of “Choice Overload” the walkouts will again be high.
The retailer should find a solution to the following two questions:
- Firstly, how does one arrive at the right mix of inventory, leading to right planogram?
- Secondly, how should the retailer go about replenishing the merchandise against sale, in continuing to enjoy the right mix in planogram?
2. Constructing the Ideal Planogram
To explain this better, let us assume a retail chain with 50 showrooms. The retail chain comprises, say, 10 small format showrooms, 30 medium format showrooms, and 10 large format showrooms. The inventory mix in all these showrooms happens initially keeping their competition as bench mark. Once the showroom starts selling the merchandise, there would be learning, and each franchisee/ Store Manager uses their interpretation of the sale pattern, to correct the stock mix. Over a period, they reach a situation where they realise that the only way to bring in fresh/new merchandise is by liquidating the aged/non-selling stocks at a high discount. By resorting to this, not only their margins get eroded, but more importantly, their valuable time gets consumed only in liquidating the non-performing stock.
- What is the way out? Are there smarter processes in arriving at the right inventory mix?
- Well, it is said that collective wisdom is better than individual expertise.
In KAUN BANEGA CROREPATHI, research says that the right answers the person sitting in the Hot seat could get from “ask the expert lifeline” was only 40%, as compared to 80% correct answer from audience poll. This reiterates the point that collective wisdom is better than individual excellence. The point I am trying to make here is that, is there a way the collective happenings at each of the store can be used as a reference in arriving at the right planogram (rather than each store deciding on their planogram independently)
In the example explained, we said that the retail chain has 10 smaller format showrooms. Let us say that these small format retailers are dealing with 10 categories (and each category with multiple sub-categories) say A to J, and each category/ Sub-category will have merchandise at (say) 10 different price points, say 1 to 10. While each category (A to J) and its sub-category with price points 1 to 10, represents the width of merchandise, the depth of merchandise is defined by the number of varieties they carry in each category/ Sub- category at each price points.
Having understood thus far, we should compute the average stock held by these 10 stores, by compiling store-wise, at each category/ Sub-category/ price point wise, stock held. This followed, in arriving at the average sale, by compiling the sale, again showroom-wise, category/Sub-Category price-point-wise.
Having done this, we will be able to arrive at category-wise/sub-category wise/price-point-wise, the average sale per year of all stores together and the average stock turn, again category-wise/Sub- category wise/ price-point-wise. The sample data thus compiled will provide a valuable insight to each showroom on how their stock mix is performing in comparison with other stores and where it needs correction, and how they can arrive at the right planogram.
For a better understanding, let us consider the following example wherein for one category (Bangle)/ Sub- Category (Filigree), at one price point (10 -12 grams), compilation has been done.
This exercise needs to be done for all the Category/ Sub- Category and at each weight band. With this done, the Four- Quadrant tool (as explained below) will guide the retailer in arriving at the right assortment planning for his stores.
3. The Four Quadrant tool
This is a 2*2 analysis, which compares the sale and stock turn of a given Category/ Sub- Category/ Price point of a store with that of the group average sales and group stockturn of the group. The group average sale is captured on the Y axis and the Stock turn on the X axis. (As depicted below)
The stores falling under Quadrant 1 (Low sale and Low stock turn) and Quadrant 2 (High sale and low stock turn) are the candidates where there exists potential for stock reduction. In similar breadth, the stores falling under Q3 (High stock turn and Low sales) and Q4 (High sales and Stock turn) are the line items where they are doing well, and if required the stock can be added in the line items falling under these quadrants.
Now, coming back to the Bangle/ Filigree/ 10 to 12 grams, compilation chart done for the 10 Stores, with quadrant analysis done, will appear as below
The suggestion from our experience is that for the stores falling under Q1 and Q2 (in the above chart) the stocks can be reduced to the extent of matching the Group stock turn, without affecting their current sale.
As an example, let us look at the store 9 which is in Q1, with a sale of 2400 grams, stock of 1200 grams and stock turn of 2. If store 9 is to achieve at least the group stock turn of 2.8, their stock should be 2400/2.8 =857 grams, meaning a reduction of 343 grams (1200-857) in inventory.
The new assortment plan for a given store can be made ready by repeating the above exercise for all the line items (at Category/ Sub- Category/ Weight bands) and correcting (reducing) the stocks for the line items falling under Q1 and Q2.
The corrected inventory mixes thus arrived at is called the RIGHT/ IDEAL PLANOGRAM.
Four quadrant analysis for small retailers (< than 5 stores)
In this case, since a detailed line- item wise comparison across stores may not be meaningful (since the number of stores are less), they are suggested to do the analysis store wise, for each line item using the Four quadrant chart depicted below
For such small retailers, store wise line item wise (at the Category/ Sub-category/ weight band level) the performance of sale and stock turn is to be compared with Category/ Sub-category level average sale and Stock turn.
Having arrived at the right planogram, the next challenge will be to improve the merchandise mix on an ongoing basis, with the right replenishment process.
4. Replenishment Process (for large retailers)
For the merchandise selling under the category of fast-mover, we had explained in the earlier article how the replenishment is to be done. I will explain here, the methodology to be followed for replenishment against sale of a non-fast-mover.
To implement the suggested process, the pre-requisite lies in creating a Design bank. Therefore, let us first try and understand everything about the Design bank.
- What is Design bank?
- What should be the size of a Design bank?
- What are the pre-selection processes for a design to appear in the design bank?
- The process of replenishment using the design bank
- The advantages of using the design bank
- How to keep the design bank Dynamic?
5. Design Bank
What is a Design bank?
A design bank is a collection of pre-selected designs (with three agencies short listing) to improve the probability of sale. The design bank should cover all the line items (Category/ Sub- Category/ Weight band level = Line item) appearing in the largest show room in the retail group
What Should be the size of Design bank
To arrive at this number, for the largest store, one should refer to the sales from non-head age band, line item wise for the last one year. Having done this, the design bank should have options to cover, line item wise 6 months sale. For example, for a line item, Bangle/ Filigree/ 10-12 grams, the sale from non-head age band is 40 in a year, the design bank should have 20 varieties of design.
The computation as per the example given above must be done for all the line items appearing in the Ideal Planogram of the largest store.
If the 6 months requirement for some of the line item is less than 3, the design bank should have a minimum of 3 design variants.
What are the selection processes for a design to appear in the design bank
For a given line item if the computed number of designs to appear in the design bank is 20 (1x), then the vendor base should be asked to showcase 60 designs (3x). These 60 designs should be reviewed by the Senior store staff and the senior merchandiser in bringing it down to 40 (2x). The shortlisted 40 designs again need to be filtered through a customer meet in picking the final 20 (1x) designs to be showcased in the design bank. By repeating this process for all the line items the design bank can be made ready with a set of designs with much higher probability of selling.
The Process of replenishment using the design bank
Once the design bank is in place, all the stores should replenish their line- item wise non-head sale only from the design bank. It is important for the store to replenish the line item sold (at Category/ Sub- Category/ Weight band level) only with the similar variant belonging to the same line item from the design bank. Example: if a design variant belonging to Bangle/Filigree/10-12 grams has got sold in the non-head age band, then the store should pick an alternate design variant from design options listed under Bangle/Filigree/10-12 grams and under other category/sub-category / weight bands.
Also, there should be appropriate software (or excel) for capturing each design variant wise pick and sale from the design bank (as and when designs from design banks are picked against sale of a variant from non-head age band happens). Over a period, design bank will have line item wise/ variant wise pick and sale data which will be a valuable guide for stores in selecting the variants with higher probability of sales.
The advantages of using the design bank for replenishing sale from non-head age band
How to keep the design bank dynamic
After computing the design bank size and selecting designs based on multi-tiered selection process explained above, retailer should build the design bank with first with 50% of the design variant requirement. After this, every alternate month, 17% of design bank size should be added. But doing this, the design bank requirement will be met by the end of 6th month. From the 8th month onwards, when new designs equivalent to 17% of design bank size is added, the same number of non-performing designs from the design bank should be removed. This process ensures the design bank is kept dynamic and its size would also be around (after addition and deletion) the 6-month non-head sale requirement.
Example: Design bank size for Bangle/Filigree/10-12 grams is 50 designs. In month 0, build the design bank with 25 designs and get started with doing alternate replenishment from the design bank. In months 2, 4, and 6, add 8 new designs to the design bank. So, by the end of month 6, design bank size would be 49. In month 8, when 17 new designs are added, remove 17 old non-performing designs which was added in month 0. Repeat this process every alternate month and keep the design bank fresh and dynamic.
Summing up
To achieve the best inventory effectiveness, besides the processes suggested for fast-movers, two things are to be done:
- One must arrive at the right planogram, by doing 2 X 2 analysis
- A Design Bank showcasing merchandise-wise unique designs should be made visible to showrooms ((along with sales and pick data). This will enable the individual showrooms to pick the merchandise with good sales history, when a non-fast-mover sells.
Happy Retailing
L.R. Natarajan
M. Prabhakar
By Invitation
Arayian Jewellery: Weaving Heritage, Craftsmanship, and Modern Elegance into Every Gemstone
By Shivaram A
Arayian Jewellery, a distinguished name in the world of fine coloured gemstone jewellery, is redefining elegance through a rare blend of legacy, craftsmanship, and modern design.
Spearheaded by Ayushi Khandelwal, the brand draws from generations of expertise in gemstone trading and jewellery making. With a commitment to authenticity, vertical integration, and a deep respect for cultural roots, Arayian offers more than just jewellery—it offers heirlooms crafted with heart, history, and a forward-looking vision.
Here’s what Ayushi Khandelwal, Creative Director of Arayian Jewellery, has to say about the brand’s journey, philosophy, and vision for the future.
1. How do you define the legacy of Arayian Jewellery?
Arayian Jewellery is built on a legacy of generations deeply rooted in the world of fine jewellery and gemstone trading. Surrounded by exquisite stones and craftsmanship from a young age, we channel this heritage, passion, and knowledge into creating timeless pieces for our clients—offering not just jewellery, but a legacy of love and refinement.
2. Explain the USP of your brand.
We are involved in the entire journey—from sourcing rough gemstones and cutting them in-house to crafting fine jewellery. This unique vertical integration allows us to offer bespoke, high-end pieces with unmatched precision and quality, all under one roof.
3. What is your design philosophy?
Our designs revolve around the natural beauty of precious gemstones. We aim to create modern, elegant, and everlasting pieces that highlight the uniqueness of each stone while maintaining a timeless aesthetic.
4. Kindly provide details of your product offerings—bridal & jewellery collections or others.
We specialize in exclusive fine jewellery crafted with natural, coloured gemstones. Every piece is one-of-a-kind, celebrating individuality with authenticity and certified provenance. Our offerings include bridal collections, statement jewellery, and heirloom-worthy pieces.
5. How do you ensure that your jewellery designs reflect cultural heritage while appealing to the evolving tastes of younger generations?
By embracing clean, contemporary aesthetics while honouring the intrinsic elegance of traditional gemstones, we create designs that resonate with modern sensibilities without losing their cultural soul. The coloured stones remain the centrepiece of our creations, offering a bridge between heritage and innovation.
6. What role does sustainability play in your sourcing and crafting processes?
We source our gemstones responsibly, primarily via auctions from the likes of Gemfields. Our in-house cutting of rough stones not only reduces environmental impact but also ensures every layout is distinctive and responsibly crafted.
7. How does your brand differentiate itself from traditional jewellery makers in Jaipur in terms of craftsmanship and innovation?
Our commitment to international standards of craftsmanship sets us apart. Each piece is designed for enduring comfort, precision, and wearability, combining traditional artistry with cutting-edge techniques for global appeal.
8. What specific measures have you taken to make your jewellery accessible to a global audience without compromising cultural authenticity?
We actively participate in prestigious international exhibitions, making our work accessible to clients across the globe while staying true to our roots in artisanal gemstone craftsmanship.
9. How do you incorporate modern technology, such as AI, in jewellery designing?
Our design process is grounded in hand-sketching and personal inspiration drawn from travel and surroundings. While we honour traditional design methods, we remain
open to integrating modern tools, including AI, to enhance precision and creativity in future collections.
10. Where does Arayian Jewellery see itself in the coming years? What is the roadmap?
We envision Arayian Jewellery becoming a globally recognized name in fine coloured gemstone jewellery—synonymous with excellence, authenticity, and innovation. Our roadmap includes global expansion, increased visibility through exhibitions, and continuously elevating our craftsmanship.
11. Where is Arayian Jewellery’s presence beyond the Indian market?
Arayian Jewellery has an international footprint through exhibitions and showcases in key global markets including Bangkok, Qatar, Turkey, Hong Kong, Las Vegas, and Singapore, allowing us to connect with a discerning global clientele.
Jewellery is a precious commodity to purchase, and every customer wishes to take a cautious decision. Most of the purchase decisions of the jewellery customer is dependent on her “perception” of the brand or the jeweller. Keeping this in mind, certain parameters can be defined to help the customer make a quick and correct decision. For example, while buying diamond jewellery, 4 factors were considered as the “C”s- cut, carat, colour and clarity of the diamonds.
Likewise, the present customer’s buying behaviour rests on the 4 new “C”s of Jewellery Retail. What are these 4 new “C”s? Let us take a look.
The 4 new “C”s
Today’s customer’s mindset has undergone a huge transformation due to the accessibility to international trends and markets (maybe due to travel or just social media) and a wide range of designs and services are now available at jewellery stores. The buying behaviour of the current customers is governed by certain factors which are depicted below.
Observing the rankings (see Figure “Factors considered while selecting a Brand”), we can conclude that a jewellery customer’s purchase decision is based on the 4 new “C” s – Cost, Confidence, Convenience and Customer Service.
1. Cost- the first “C”
Let us face it. You, me and almost every Indian is very price conscious. Thus every customer wants to have the full value for her money- “Full paisa vasool / Good Deal” This is more so in the case of jewellery retail due to the high costs involved in the purchase. Cost is thus the dominating factor in the purchase decision of a jewellery customer. This cost of jewellery includes the making charges and the cost of the gold paid out as wastage. If this final cost looks affordable and justified to the customer, you, the retailer can make a sale.
So, the first “C” in the purchase decision is COST and as a jewellery retailer, you must position your brand rightly with respect to “cost”.
There are brands where the Making Charges / Value Addition is advertised in Bold while there are other brands like Malabar Gold or Tanishq, which may not be the cheapest in pricing but will want to still offer “Value for Money” for their set of customers. These customers might be very different from the customers for say a price warrior brand, but their customers also believe that the cost is worth it.
2. Confidence- the second “C”
A customer’s confidence in the jewellery brand starts with how the brand meets her expectations right from her first interaction during say marketing communication, her first purchase and goes on to maintain that confidence that is reflected in her repeat purchases and referrals. Word-of-mouth referrals and relatives’ recommendations still form some of the influencing factors of jewellery purchases.
Trustworthiness of a brand is a mark of the confidence the customer has in the jewellery retailer and this is an aggregate of several factors which include purity, pricing, discounts, shopping experience, after-sales service etc. A customer, who feels that the jeweller can give her
the best in all the above factors, has typically won her confidence.
This clearly shows that the “confidence” of the customer in the brand is emerging as the second “C” and it is the most important factor in brand perception and purchase decision.
3. Convenience- the third “C”
Jewellery is still a “touch and feel” market where purchases are made in person. But of late, convenience in jewellery shopping is emerging as one of the decisive factors in jewellery purchase.
Today’s customers are well-informed about the price fluctuations, making charges, wastage, and design options etc. even prior to the actual physical purchase at the shop. The presence of a website or social media like Instagram/ Facebook etc. with a design gallery and price estimates are often appreciated by customers as it helps them in planning their purchase. Such a convenience-driven model of business with knowledge-empowerment is the call of today for jewellery retailers.
This is why Convenience is emerging as the third C in brand positioning or purchase decisions.
Customers look at “customization” as part of the convenience offered by a jeweller. The convenience of customization is an added benefit offered by jewellers. Convenience also means service benefits that the jewellery outlet offers like “home delivery” or”gifting options”.
4. Customer service – the 4th C
A jewellery purchase is an emotional decision for most buyers as they attach great sentimental and personal value to the jewellery they purchase. This is why customers look for a “positive shopping experience” when they come to buy jewellery. This positive shopping experience is founded on the 4th C -customer service.
Customer service involves not only hospitality and friendly greetings but also expertise from the staff. Customers expect well informed staff to guide and advise them on their jewellery choices.
Ganesh Jewellers of Mumbai wish to position themselves with respect to their customer service. Look at what they say –
Right from the marketing communication, the entry to the store/ website, the warm welcome, the store atmosphere, the hospitality gestures, the offers on the merchandise including the range, the price, the design etc. to the customer-handling, everything in your jewellery outlet should enrich the 4th C – the customer service.
The Jewellery industry may see its ups and down regularly, but if you keep these 4 Cs in mind and position your brand or jewellery outlet, you are sure to be the champion of jewellery retail in your market and beyond.
The ease and convenience of gold loans is the prime reason for its huge popularity and accessibility. Being a secured loan, it does not require much documentation and processes. Gold loans in India have been emerging as the most popularly accessed credit form. With such huge popularity of gold loans, the scamsters also get active to cheat people. Read here to identify between the genuine gold lenders and fake ones.
Gold loans have emerged as one of the most accessible and dependable forms of credit in India. They are easy to apply for, processed quickly, and disbursed almost immediately. What makes them particularly attractive is the minimal paperwork involved and the fact that they usually bypass long credit history checks.
However, as the popularity of gold loans grows, so does the risk of falling victim to fraud. Many individuals in urgent need of funds become easy targets for scammers posing as gold loan providers. These fraudsters exploit the borrower’s urgency and trust, often leading to significant financial losses.
Red Flags: How to Spot a Fake Gold Loan Lender
Fraudulent lenders often try to lure borrowers with offers that seem too good to be true. Watch out for the following warning signs:
- Unrealistically Low Interest Rates: Be cautious if the rates offered are far below the market average.
- Inconsistent or Delayed Communication: Lack of professionalism or delayed responses could signal a scam.
- No Contact Information: A legitimate lender will always provide verifiable contact details.
- Unclear Loan Terms: If terms and conditions are vague or not explained properly, that’s a red flag.
- Missing Licenses: Genuine lenders are licensed and regulated by appropriate authorities.
- False Affiliations: Verify any claims of association with known institutions.
How to Identify a Genuine Gold Loan Provider
As a borrower, you have every right to verify the credibility of the lender. Here are a few essential checks:
- Verify Credentials: Ensure the lender is registered with financial authorities and follows regulatory norms.
- Compare Interest Rates: Research and compare rates with other well-known lenders.
- Insist on a Personal Visit: Visit their branch or office to understand their operations better.
- Request a Draft Key Facts Statement (KFS): This document clearly outlines loan terms, helping you make an informed choice.
Why Choose Arvog Gold Loans?
With over 40 years of legacy and trust, Arvog Gold Loans offers a seamless, secure, and customer-friendly borrowing experience. Here’s what sets Arvog apart:
1. Simple Application Process
Applying is straightforward and can be completed online within minutes. The user-friendly portal ensures a smooth experience.
2. Quick Loan Processing
Arvog processes loan applications in under 30 minutes, helping borrowers access funds when they need them the most.
3. Immediate Disbursal
Once the gold is evaluated, the loan amount is credited—often within hours—directly to your bank account.
4. Lowest Interest Rates
Compared to unsecured loans like personal loans or credit cards, Arvog Gold Loans offer significantly lower interest rates, making them cost-effective.
5. Flexible Repayment Options
Choose a repayment schedule that works for you—monthly EMIs, bullet repayments, or a one-time payment at the end of the tenure.
6. No Credit Score Required
Since the loan is secured against gold, your credit score doesn’t affect the approval—making it accessible even to those with limited credit history.
7. Secure Gold Storage
Your pledged gold is stored in SEBI-monitored vaults with the highest level of security, giving you complete peace of mind.
8. Guaranteed Gold Return
Upon successful repayment, your gold is returned in the exact condition it was submitted, ensuring both emotional and financial security.
Make Informed Choices
Gold loans are a practical and trustworthy way to raise funds—whether for urgent needs or major life plans. However, it is crucial to read the Key Facts Statement (KFS) thoroughly. This document includes important details like interest rates, charges, repayment terms, and more. Reviewing it before signing ensures transparency and a well-informed decision.
Conclusion
Gold loans seamlessly blend the traditional value of gold with the convenience of modern finance. With features like fast disbursal, low interest rates, and secure asset handling, they provide a reliable financial solution. By choosing a trusted and regulated lender like Arvog, borrowers can enjoy the benefits of gold loans with complete confidence and peace of mind.
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