What is Planogram? Definition, Meaning and Concept
Planogram is a visual representation of how products should be arranged on a shelf or in a retail store to maximize sales and profitability.
It is a powerful tool that helps retailers to optimize their store layouts, improve product visibility, and create a better shopping experience for customers.
In this article, we will explore what planogram is, its benefits, and how it works.
What is Planogram?
Planogram is a detailed visual representation of a store layout that includes the placement of products, their quantities, and their specific positions.
The planogram shows how the products should be displayed to maximize sales and profitability, taking into account factors such as customer traffic flow, product popularity, and sales history.
It is a tool used by retailers to create an efficient and effective store layout that drives customer engagement, sales, and profit.
Planogram Definition
A planogram is a visual representation or diagram of how products should be displayed in a retail store.
It is a detailed plan that outlines the placement of products on shelves, displays, and other areas of the store.
Planograms typically include information such as product placement, shelving height, and quantity of products to be displayed.
They are created with the intention of maximizing sales and improving the customer shopping experience by ensuring that products are displayed in a logical, attractive, and easily accessible manner.
Planograms are an important tool for visual merchandising, inventory management, and store layout design.
Planogram Definition in Retail
In retail, a planogram is a visual representation or diagram that shows how products should be displayed in a store.
It is a detailed plan that outlines the placement of products on shelves, displays, and other areas of the store, based on factors such as product category, sales data, and customer behavior.
Planograms are created with the aim of optimizing product placement and increasing sales by creating a visually appealing and easy-to-navigate shopping experience for customers.
They are an important tool for visual merchandising, inventory management, and store layout design, and are commonly used by retailers of all sizes to improve store performance and drive profitability.
Planograms are typically created using specialized software that allows retailers to easily design and adjust their displays, based on sales data and other key metrics.
What Is the Meaning of Planogram?
The meaning of planogram refers to a visual representation or diagram of how products should be displayed in a retail store.
A planogram provides a detailed plan that outlines the placement of products on shelves, displays, and other areas of the store.
Planograms typically include information such as product placement, shelving height, and quantity of products to be displayed.
They are created with the intention of maximizing sales and improving the customer shopping experience by ensuring that products are displayed in a logical, attractive, and easily accessible manner.
Planograms are an important tool for visual merchandising, inventory management, and store layout design, and are commonly used by retailers of all sizes to improve store performance and drive profitability.
Characteristics of a planogram
Planograms are visual representations of how products should be arranged in a specific area of a retail store, such as a shelf, gondola, or end cap.
A well-designed planogram should have the following characteristics:
- Clear and Easy to Read
A planogram should be easy to read and understand.
It should clearly show the placement of each product and provide information on the number of facings, location of price tags, and other merchandising details.
- Customer-Focused
A planogram should be designed with the customer in mind.
It should be organized in a way that makes it easy for customers to find the products they are looking for and should be visually appealing to encourage browsing.
- Aligned with Business Goals
A planogram should be aligned with the overall business goals of the organization.
It should be designed to drive sales, increase profitability, and improve the customer experience.
- Based on Data
A planogram should be based on data, such as sales history, customer behavior, and product popularity.
This data should be used to optimize product placement and ensure that the planogram is effective in driving sales.
- Flexible
A planogram should be flexible and adaptable.
It should be regularly reviewed and updated to reflect changes in customer behavior, product popularity, and sales trends.
- Consistent
A planogram should be consistent across all stores and should reflect the overall branding and merchandising strategy of the organization.
- Accessible
A planogram should be easily accessible to all members of the organization who are responsible for implementing and maintaining it.
This includes store managers, merchandisers, and sales representatives.
Overall, a well-designed planogram should be customer-focused, aligned with business goals, based on data, flexible, consistent, and accessible to all members of the organization.
These characteristics will ensure that the planogram is effective in driving sales and improving the customer experience.
What Are the Types of Planogram?
There are several types of planograms that retailers use to display their products in a retail store.
Here are some of the most common types:
- Standard Planogram
A standard planogram is the most common type of planogram.
It shows how a specific category of products should be arranged on shelves, racks, or displays.
The standard planogram typically includes details such as product placement, facing, and shelf allocation.
- Seasonal Planogram
A seasonal planogram is used to showcase products that are associated with a particular season or holiday.
For example, a seasonal planogram might be used to display Christmas decorations during the holiday season or beach towels and sunscreen during the summer months.
- Promotional Planogram
A promotional planogram is designed to highlight products that are on sale or part of a promotional offer.
The promotional planogram typically includes details such as product placement, facing, and signage.
- New Product Planogram
A new product planogram is used to showcase new products that have recently been introduced to the market.
The new product planogram typically includes details such as product placement, facing, and signage.
- Clearance Planogram
A clearance planogram is used to display products that are being sold at a discount to clear inventory.
The clearance planogram typically includes details such as product placement, facing, and signage.
- Store Layout Planogram
A store layout planogram shows how the entire store should be laid out.
It includes details such as the location of departments, product placement, and aisle placement.
The store layout planogram is used to ensure that the store is easy to navigate for customers and that products are displayed in a way that maximizes sales.
- Interactive Planogram
An interactive planogram is a digital planogram that allows retailers to visualize and manipulate the placement of products in real-time.
Interactive planograms can be used to optimize product placement and improve store performance.
There are several types of planograms that retailers use to display their products in a retail store, including standard, seasonal, promotional, new product, clearance, store layout, and interactive planograms.
Each type of planogram is designed to help retailers optimize product placement and improve store performance.
What is Benefits of Planogram?
Planogram offers numerous benefits to retailers.
Some of the benefits include:
- Improved Product Visibility
Planogram helps retailers to display products in a way that enhances their visibility and increases their chances of being noticed by customers.
When products are displayed prominently, customers are more likely to see them and consider purchasing them.
- Better Customer Experience
Planogram helps retailers to create an organized and efficient store layout that improves the overall shopping experience for customers.
When products are arranged in a logical and easy-to-find manner, customers are more likely to enjoy their shopping experience, which can lead to repeat visits and increased loyalty.
- Increased Sales
Planogram helps retailers to increase sales by placing high-demand products in prominent locations and cross-selling complementary products.
By leveraging sales data and customer insights, retailers can create a store layout that is optimized for sales and profitability.
- Reduced Labor Costs
Planogram helps retailers to reduce labor costs by streamlining the process of restocking shelves and maintaining inventory levels.
By having a clear plan for product placement, retailers can reduce the time and effort required to manage their inventory.
- Competitive Advantage
Planogram gives retailers a competitive advantage by enabling them to create a store layout that is optimized for their unique needs and customer base.
By leveraging data and insights, retailers can create a layout that is tailored to their customers, which can help them stand out from the competition.
How Do Planograms Work?
Planogram is a complex process that involves multiple steps.
The following are the key steps involved in creating a planogram:
- Collect Data
The first step in creating a planogram is to collect data on customer behavior, sales history, and product popularity.
This data can be gathered from various sources, including point-of-sale (POS) systems, customer surveys, and sales reports.
- Analyze Data
The next step is to analyze the data collected in step one to identify patterns and insights.
By analyzing the data, retailers can determine which products are most popular, which products sell well together, and which products are frequently out of stock.
- Create a Floor Plan
The third step is to create a floor plan that takes into account factors such as customer traffic flow, product popularity, and sales history.
The floor plan should be designed to maximize sales and profitability while also creating an efficient and enjoyable shopping experience for customers.
- Determine Product Placement
The next step is to determine the placement of each product in the store.
This involves deciding which products should be placed in prominent locations, which products should be placed at eye level, and which products should be placed near complementary products.
- Build the Planogram
The final step is to build the planogram, which is a visual representation of the store layout that includes the placement of each product.
The planogram should be easy to read and should provide clear instructions on how products should be placed on shelves and in displays.
How Do You Create a Planogram?
Creating a planogram involves a number of steps that can be broken down into several key stages.
The following is a general guide for creating a planogram:
- Collect Data
Before creating a planogram, it is important to collect data on customer behavior, sales history, and product popularity.
This can be done by analyzing sales data, conducting customer surveys, and observing customer behavior in-store.
- Define Your Goals
Once you have collected data, you should define your goals for the planogram.
What do you want to achieve with the planogram? Is your goal to increase sales, improve the customer experience, or both?
- Determine Your Space
Determine the space that you have available for your planogram.
This will help you to determine the number of fixtures and products that you can include in your planogram.
- Design Your Layout
Using the data that you have collected and your goals for the planogram, design a layout that will meet your objectives.
Consider factors such as product placement, traffic flow, and the overall aesthetic of your store.
- Choose Your Products
Choose the products that you want to include in your planogram.
Consider factors such as product popularity, sales history, and seasonality.
- Place Your Products
Once you have chosen your products, place them in your planogram according to your layout.
Consider factors such as product placement, product grouping, and the overall visual impact of your planogram.
- Test and Measure
Test and measure the effectiveness of your planogram regularly.
Use sales data and customer feedback to determine if your planogram is driving sales and improving the customer experience.
It is important to note that creating a planogram is an iterative process.
You may need to make adjustments to your planogram based on sales data, customer feedback, and changes in product popularity.
Regular testing and measurement will help you to optimize your planogram over time.
Best Practices for Planogram
To ensure that your planogram is effective and optimized for sales and profitability, it is important to follow best practices.
The following are some best practices for creating and implementing a planogram:
- Use Data
Use data to drive decision-making.
Analyze customer behavior, sales history, and product popularity to create a store layout that is tailored to your customers' needs.
- Focus on Customer Experience
Create a store layout that is optimized for the customer experience.
Products should be easy to find, and the store should be organized and visually appealing.
- Plan for Change
Keep in mind that your planogram will need to be updated periodically to reflect changes in customer behavior and product popularity.
Plan for change and be prepared to adjust your planogram as needed.
- Test and Measure
Test and measure the effectiveness of your planogram regularly.
Use sales data and customer feedback to determine if your planogram is driving sales and improving the customer experience.
- Involve Your Team
Involve your team in the planogram process.
Seek input from your sales team and store managers to ensure that your planogram is optimized for your store and your customers.
Examples of Planogram
There are many different types of planograms that can be used in retail stores.
The following are some examples of planograms:
- Category Planogram
A category planogram is used to display products within a specific category, such as beverages or snacks.
The planogram is designed to optimize sales within that category by placing high-demand products in prominent locations.
- Seasonal Planogram
A seasonal planogram is used to display products that are popular during a particular season, such as holiday decorations or summer clothing.
The planogram is designed to maximize sales during that season by placing seasonal products in prominent locations.
- Cross-Merchandising Planogram
A cross-merchandising planogram is used to display products that complement each other, such as chips and salsa or shampoo and conditioner.
The planogram is designed to encourage customers to purchase both products by placing them in close proximity.
- Brand Planogram
A brand planogram is used to display products from a particular brand.
The planogram is designed to optimize sales for that brand by placing high-demand products in prominent locations.
What Does a Planogram Merchandiser Do?
A planogram merchandiser is responsible for ensuring that a retail store's planograms are implemented correctly and maintained over time.
This involves a number of tasks, including:
- Setting up Planograms
A planogram merchandiser will set up planograms in accordance with the retailer's guidelines.
This includes selecting the products to be displayed, arranging them in the correct order, and placing them in the appropriate location within the store.
- Maintaining Planograms
Once a planogram has been implemented, a planogram merchandiser will ensure that it is maintained over time.
This involves checking that the products are still in stock, that they are displayed correctly, and that the planogram is still effective in driving sales.
- Conducting Audits
Planogram merchandisers will conduct regular audits of their planograms to ensure that they are effective in driving sales.
This involves collecting data on sales performance, customer feedback, and product popularity.
- Reporting
Planogram merchandisers will report their findings to their manager or other stakeholders in the organization.
They may also provide recommendations on how to improve the planograms to drive sales and improve the customer experience.
- Communicating
Planogram merchandisers will communicate with other members of the organization, such as sales representatives, store managers, and marketing teams, to ensure that the planograms are aligned with the overall goals of the organization.
Overall, planogram merchandisers play a critical role in ensuring that a retail store's planograms are effective in driving sales and improving the customer experience.
They work closely with other members of the organization to ensure that the planograms are aligned with the overall goals of the organization and are regularly reviewed and updated to reflect changes in customer behavior and product popularity.
What Is the Difference Between Planogram and Layout?
While planograms and layouts are related concepts, they serve different purposes and have distinct differences.
A layout is a schematic drawing or diagram that shows the overall arrangement of a retail store or section.
It provides a bird's eye view of the space and shows the placement of fixtures, walls, aisles, and departments.
The layout of a store is designed to guide customer traffic flow and create a pleasant shopping experience.
It is an important aspect of store design and helps to ensure that customers can navigate the store easily and find the products they are looking for.
On the other hand, a planogram is a visual representation of how products should be arranged within a specific area of the store, such as a shelf, gondola, or end cap.
Planograms are created using specialized software and show the placement of individual products, including the number of facings, the location of price tags, and other merchandising details.
Planograms are used to optimize product placement and improve sales by guiding customer behavior and highlighting the most profitable products.
The key difference between planograms and layouts is their level of detail and scope.
Layouts provide a high-level view of the overall store design, while planograms provide detailed information on product placement within specific areas of the store.
Layouts are used to guide customer traffic flow, while planograms are used to optimize product placement and improve sales.
In summary, layouts provide a blueprint for the overall store design, while planograms provide a detailed guide for product placement within specific areas of the store.
Both are important tools for store design and merchandising, but they serve different purposes and are used at different stages of the merchandising process.
Tips for Creating Planograms That Improve Store Performance
Planograms are visual representations of how products should be arranged in a specific area of a retail store.
The effective design and implementation of planograms can help retailers improve store performance, increase sales, and enhance the overall customer experience.
Here are some tips for creating planograms that improve store performance:
- Analyze Sales Data
Before creating a planogram, it is important to analyze sales data to identify which products are selling well and which are not.
This information can be used to determine which products should be given more prominent placement within the planogram.
By placing high-selling products in prominent locations, retailers can increase their visibility and encourage customers to make additional purchases.
- Know Your Target Customer
Understanding your target customer is essential when creating a planogram.
Consider factors such as age, gender, and shopping habits to design a planogram that will appeal to your target customer.
For example, if your target customer is environmentally conscious, you may want to highlight products that are eco-friendly or sustainable.
- Focus on Product Placement
The placement of products within a planogram can greatly impact sales.
Consider placing high-margin items at eye level, grouping related products together, and placing complementary products nearby.
By strategically placing products within a planogram, retailers can increase the likelihood of customers making additional purchases.
- Optimize Product Density
Optimizing product density is essential when creating a planogram.
Consider the number of facings each product should have.
Too many facings can cause clutter, while too few facings can lead to stockouts.
By optimizing product density, retailers can ensure that products are well-stocked and easy to find.
- Consider the Retail Space
Take into account the size and shape of the retail space when creating a planogram.
Ensure that the planogram fits within the space and allows for easy customer flow.
By designing a planogram that fits within the space, retailers can improve the overall customer experience and increase the likelihood of additional purchases.
- Use Merchandising Techniques
Incorporate merchandising techniques such as color blocking, product contrast, and use of lighting to make products stand out within the planogram.
By using these techniques, retailers can draw attention to specific products and increase their visibility.
- Test and Adjust
Regularly test and adjust planograms to optimize sales performance.
Use sales data and customer feedback to make adjustments as needed.
By regularly testing and adjusting planograms, retailers can ensure that they are meeting the needs of their customers and maximizing sales.
- Collaborate with Others
Collaborate with other members of the organization, such as store managers and merchandisers, to ensure that the planogram is aligned with the overall goals of the organization and is implemented correctly.
By working together, retailers can ensure that planograms are effective in improving store performance and increasing sales.
Creating effective planograms requires careful analysis of sales data, understanding of the target customer, focus on product placement, optimization of product density, consideration of the retail space, use of merchandising techniques, regular testing and adjustment, and collaboration with others within the organization.
By following these tips, retailers can improve store performance and increase sales.
Why is Planogram Important in Retail?
Planograms are important in retail for several reasons.
Here are some of the key reasons why planograms are essential for retail businesses:
- Improve Customer Experience
Planograms help retailers organize and display their products in a way that makes it easy for customers to find what they are looking for.
By making the shopping experience more enjoyable, customers are more likely to return to the store and recommend it to others.
- Increase Sales
Planograms are designed to optimize product placement, which can increase sales.
By placing products in strategic locations and using effective signage, retailers can encourage customers to make more purchases.
- Optimize Shelf Space
Planograms help retailers maximize their shelf space by showing them how to best utilize the available space.
By organizing products in a way that minimizes wasted space, retailers can display a larger selection of products without having to increase the store's footprint.
- Reduce Labor Costs
Planograms help retailers streamline their product stocking process.
By having a clear and organized layout for each shelf or display, employees can quickly and easily restock products without having to spend time rearranging them.
- Enhance Visual Merchandising
Planograms are a crucial tool for visual merchandising.
They help retailers create eye-catching displays that draw customers' attention to specific products.
By using effective merchandising techniques, retailers can increase the perceived value of their products and encourage customers to make more purchases.
- Provide Data-Driven Insights
Planograms provide retailers with data-driven insights that they can use to improve their store's performance.
By analyzing sales data and customer behavior, retailers can adjust their planograms to optimize product placement and increase sales.
Planograms are an essential tool for retail businesses.
They help retailers improve the customer experience, increase sales, optimize shelf space, reduce labor costs, enhance visual merchandising, and provide data-driven insights.
By utilizing planograms, retailers can improve their store's performance and increase profitability.
What Is the Role of the Planogram in Visual Merchandising?
Planograms play a crucial role in visual merchandising by helping retailers create effective displays that showcase their products in the most appealing way possible.
Visual merchandising is all about creating a visually compelling and engaging shopping experience for customers.
Planograms help retailers achieve this by providing a blueprint for how products should be displayed in-store.
Here are some of the key ways that planograms play a role in visual merchandising:
- Product Placement
Planograms show retailers where to place each product on the display, ensuring that each item is given the best possible position to maximize its visual impact.
By strategically placing products based on their size, color, and style, retailers can create visually appealing displays that draw the customer's attention and highlight the product's unique features.
- Brand Identity
Planograms help retailers maintain their brand identity by providing a consistent look and feel across all displays.
By using a consistent color scheme, font, and layout, retailers can create a cohesive brand experience that reinforces their brand identity and builds customer loyalty.
- Space Optimization
Planograms help retailers make the most of their available space by optimizing the placement of products on the display.
By minimizing wasted space and maximizing product visibility, retailers can increase their sales and create a more engaging shopping experience for customers.
- Seasonal Displays
Planograms are particularly useful for creating seasonal displays, such as Christmas or back-to-school displays.
By using a seasonal planogram, retailers can easily create a display that captures the spirit of the season and encourages customers to purchase seasonal products.
- Product Segmentation
Planograms help retailers group products together based on category or theme, creating a more organized and intuitive shopping experience.
By grouping similar products together, retailers can help customers find what they are looking for more quickly and easily.
Planograms play a critical role in visual merchandising by providing retailers with a blueprint for how to display their products in a way that is visually appealing, engaging, and effective at driving sales.
By using planograms to guide their visual merchandising efforts, retailers can create compelling displays that enhance their brand identity, optimize their space, and provide a seamless shopping experience for customers.
Conclusion
Planogram is a powerful tool that can help retailers optimize their store layouts, improve product visibility, and create a better shopping experience for customers.
By collecting and analyzing data, creating an effective store layout, and optimizing product placement, retailers can increase sales, reduce labor costs, and gain a competitive advantage.
To ensure the effectiveness of your planogram, it is important to follow best practices and regularly test and measure its effectiveness.
Overall, planogram is a valuable tool for any retailer looking to maximize sales and profitability.
Why is the planogram important?
You have to agree with us on the following: a document that offers guidelines and guides the exhibition makes a big difference to the success of your brand.The planogram is the result of a complete analysis of the situation of the categories and is made by developing an ad hoc algorithm for each retailer that allows weighing sales, rotation and profitability at the SKU level, also considering the consumer's purchase decision tree, their tastes and preferences, their ethnographic characteristics, the commercial and operational strategies of the retailers, the physical restrictions, infrastructure and the number of references that make up the assortment. The resulting or output is a downloadable, printable and easy-to-read report that indicates at the SKU level basic information such as position, quantity, supplier, product brand and reference codes (EAN), among others, intended to implement,
The planogram facilitates the realization of the purchase as a result of the proper organization of the products, and incidentally, increases the level of customer satisfaction, as well as improving the visual appeal of the shelves and facilitating the replenishment of the products. It also helps determine the sales potential of each exhibitor space.
For the brand, the planogram is a performance facilitator, since it has a direct impact on the purchase impulse. That's what Iderlam Nascimento, Agile Promoter Success Consultant, suggests. After ten years of dedication to trade marketing agency strategies, he suggests that the planogram should be a reflection of how the company wants to display its product in the POS:
It means that your brand follows standards. And it is those standards that guide the shopper. The planogram directly impacts the visual part of the purchase impulse by the shopper.
Where should your brand be at the point of sale? Is the transmission of the strategy to your team efficient? A well-designed planogram can answer all of these questions.
Planogram: What is it and what benefits do you get by implementing it
The basic definition states that the Planogram is a visual representation of product placement within a store to maximize sales and minimize wasted space. It is created by a store manager or a member of the advertising/marketing/sales team.Prior to the creation of a planogram, a thorough investigation of the buyer should be done. CPG companies take care of categorizing their products and analyzing current market trends. Understanding how shoppers shop in that category is vital to creating an effective planogram.
Marketing or market research teams must be attentive to every detail. A small mishap can incur substantial losses.
Take the example of "Project Impact," a 2009 Walmart project. The main objective of the project was to increase the space in the superstores and improve the overall shopping experience. To achieve this goal, Walmart recalled 10% of SKUs, approximately 15,000 SKUs, from select superstores in prime locations.
Products such as jams and jellies, which they discovered were the reason for the clutter in the stores, were part of this elimination.
As the Walmart research team predicted, the change positively affected the experience for shoppers. The management was happy with the change, and the project was considered a success.
However, they paid no attention to the slow decline in sales. A decision that soon turned into a disaster. Over the next two years, sales dropped sharply at these superstores.
By the time Walmart management realized their blunder, the losses had piled up to $2 billion. A huge loss compared to its competitors, which brought "Project Impact" to an end.
Upon investigation, they found that Walmart's research team neglected the exclusive nature of these products. Yes, it was just Jam and Jelly, but many buyers came to these stores to buy them. By removing these products, shoppers' frustration levels increased as they had to go to other stores just to buy jelly.
So instead of traveling for a product, they started shopping at Walmart's competitor supermarkets. This shopper behavior resulted in poor sales of other SKUs and an overall loss for the store.
Benefits of implementing a planogram
The Cambridge dictionary defines 'Compliance' as: "the act of obeying an order, rule or request".
The term "Planogram Compliance" refers to the store's execution of pre-defined store/product planogram layouts. The main objective is to ensure that each retail store is optimized to sell the products offered.
Retailers and shoppers can easily find products when stores comply with the plan.
With that said, let's look at the 3 key benefits of planogram compliance:
Avoid out of stock:
Inventory depletion, commonly known as Out of Stock (OOS), is caused by inconsistent replenishment of shelves.
Research from America's grocery manufacturers attributes 70-90% of stockouts to poor shelf replenishment practices.
An empty shelf does not necessarily mean a lack of inventory in the store. To negate this situation, retail operations must include automated software that detects non-compliance with planograms.
This change allows retailers to guide their store and field representatives to the appropriate shelves.
Revenue increase:
50% of the planogram design belongs to successful brands/SKUs and the remaining space to new or low margin products. Most of the time, compliant stores make it easy for auditors to assess the performance of a brand/SKU.
After analyzing the impact of product placement and shelf optimization on shopper behavior, merchandise owners can deduce strategies to capitalize on sales opportunities.
Maximize space:
Regardless of the retail space and corresponding rental costs, maximizing the use of space leads to an efficient and profitable business. Planograms help merchandisers stay organized and understand the purpose of the store space. Additionally, planograms support effective inventory management.
How to use a planogram in your store
A planogram will help you plan your space usage and collect the data you need to make smarter visual merchandising decisions that drive sales in your store.With the help of planograms, you will be able to determine precisely when and where to place your products for the best financial results.
In addition, planograms make it easy to market products in the right place at the right time, giving the customer a better shopping experience and leading to increased upsells.
Effective use of physical space in a store is critical to the success of any retailer. It is clear that space costs money and products take up space.
However, planning how to use retail space is not always easy.
For this reason, a tool like the planogram, which can help improve sales, should be part of the strategic management of your business.
Spatial management has changed a lot in the last 20 years as a result of technological advances that lead to an increase in data sources. Still, there are many things that remain the same in space management.
More than 60% of the customer's purchasing decisions occur in the store, which shows that the visibility, presentation and rotation of products is vital to encourage sales, and all these decisions are made through a planogram.
An effective planogram generates an impact on the customer that leads him to buy. Its main objective is to increase sales by determining the optimal location for each product.
How to use a planogram in your store
The complexity of the planogram can vary depending on the size of the store and the needs of the retailer.
While extremely detailed planograms can be useful for some types of stores, for smaller stores, using the strategies behind the planogram to plan store layout and product display may be sufficient.
One way to start using a planogram is through a planogram software, you can find a large number of both free and paid options.
Another way would be the old school style, drawing the space to scale with pencil and paper, using templates, or creating one in a drawing tool. Smartdraw.com has several examples that you can edit and use as a starting point for your own planogram.
Benefits of a planogram.
Using planograms offers many benefits when planning your store layout. Let's see some:
Using the planogram in your visual planning process allows you to collect data on how certain locations influence product sales.
Product placement affects buying behavior and therefore you need to figure out which strategies increase sales opportunities.
If you can compare the sales histories with the planograms used, you will know which items sold the most and where they were located, as well as which were the slowest moving merchandise. Placing them together will increase the sale of stock that is becoming obsolete.
Sales history is a convenient source of information, however, it ignores the fact that the store's performance last year may not be equivalent to this year's.
For this reason, you can opt for forecast data, instead of historical data, which takes into account the expected future behavior, based on different causes such as seasonality, price sensitivity or certain events.
You will also identify the highest converting locations in your store to place the products you want to prioritize.
The planogram allows at the same time, the strategic placement of products from the point of view of cross-selling, by placing complementary products near the main one or by placing basic products at the back of the store to make the buyer go through the entire space and increase impulse sales. With a planogram, it is easier to define these routes.
How to create a retail planogram
A planogram is a visual merchandising tool, a visual representation of the product's location on the shelf or within the store, to maximize sales and minimize wasted space.Manufacturers also use it to suggest optimal display of their products in stores.
In short, they are detailed drawings of the store design with special attention to product placement.
They are especially useful for large retailers but also for stores that offer many products and categories, such as grocery stores, pharmacies, hardware stores or fashion and accessories stores.
For stores with fewer products, a planogram is also useful, although it will be less complex.
The main objective of the planogram is to convey your visual merchandising strategy to the customer, by having the right product, in the right quantity and in the right location, where customers can easily find it, contributing to the shopping experience that drives sales growth. sales.
In addition, it helps to detect unproductive products that take up space but do not generate sales.
Analysis of the planogram facilitates assortment decision making and enables quick and effective changes.
It even allows you to take into account different demographic data, consumption habits and purchase cycles, to adapt to each situation.
By analyzing past and current sales patterns, we can figure out where a product should fit within the display, determine the correct height on the shelf, or which products should surround it.
Planograms act as maps and action plans that can help you grow your business by:
1. Attract the consumer's attention through an attractive design.
2. Create incentives for higher margin items.
3. Emphasize best sellers by placement.
4. Allow successes and failures to be tracked to implement improvements.
5. Monitor inventory and reduce excess or unavailable products.
Benefits of a planogram
Optimize space.
Retail space costs money , so optimizing the use of that space will help you run your business efficiently and profitably.
The planogram helps you keep the space organized and assign a purpose to each area of the store.
A good retailer knows that one of the keys to increasing sales is through proper visual merchandising, and following the principles of the planogram is one of the best ways to present the product to the customer.
But it's not just about increasing sales, there are also other practical reasons why retailers turn to planograms.
Reduces out of stock.
Planograms allow for more effective inventory management . Greater organization will help you avoid out-of-stocks and keep inventory under control, as there is a place for everything and everything should be in its place, making ordering easier and replenishing easier.
In addition, it is a good antidote against theft because it is easier to know when you have lost something.
When stocks run out, the consumer has the feeling that the store is not well organized and unable to meet their needs, which, in some cases, can lead them into the arms of a competitor.
Understand space performance.
It is important to understand the performance of a product based on the space it occupies when deciding where to assign it.
How to create a retail planogram.
When creating a planogram, the best practices could be summarized as follows:
keep it simple
Large retailers often hire teams of visual merchandising specialists to research the best ways to promote sales through product placement, décor, and displays. They may even have a full-time planogrammer.
They also generally opt for specific business software to create planograms.
Smaller retailers will have to forego all of this and create their own templates.
If it is a very complicated process, it will be very difficult for you to repeat it from time to time because your time is limited and valuable.
Measure your plan.
Track monthly sales reports related to the planogram.
Train your employees.
Spend some time training your employees on how to use a planogram so they can effectively follow your guidelines.
How to Make a Grocery Store Planogram
The organization and arrangement at a point of sale, in this case in a grocery store, is essential to promote sales and provide customers with a positive experience that contributes to their loyalty. One of the strategies to achieve this is to have a planogram, but before we talk about tips, let's start by explaining what a planogram is.Planogram Definition
A planogram, as its name indicates, is a plan that helps you plan the space you have for your business, the furniture and displays for the products, as well as the correct arrangement of the products to boost sales.
In the case of a retailer, such as someone who has a small store on the corner, the correct use of space translates into profits. In addition, that the client prefers to go to your business before going elsewhere when he needs something. That is why a planogram is an essential part of business strategy.
The planogram is a diagram that, in a visual way, can help you determine the best location for the shelves and the products that you should place on them. With this, you minimize wasted space and that the customer can find and choose the products appropriately.
In addition, in this arrangement of products, it is possible and convenient to promote those items with a higher profit margin. It also helps to emphasize the products that are the best sellers/wanted by placing them on the shelves.
With a planogram you will be able to keep track of the successes and errors in the strategies implemented in the accommodation of space and products. Not to mention that you will be able to determine which products you have in excess in your inventory to give a balance, or those that are no longer available and you need to restock.
How to Make a Grocery Store Planogram
Now that you know what a planogram is, you can start working on the correct use of space as a sales strategy. Here are some tips that may be useful for you to get down to work.
Even if your business does not have a very large space, you have to identify which are the best-selling products and consider assigning them a considerable space that is at the customer's hand and easily accessible.
What products you should place in those spaces, how many products and at what height, are decisions that you must make based on the rotation of the products, that is, how much they sell.
Consider the different products that you offer in your store so that you can accommodate them according to their classification. For example, there is a way to classify them according to the type of sale. Here you will find the hook products that are always sold and you must have (milk, sugar, soft drink or bread). Impulse products that are not necessary, but the customer decides to buy when he sees them (gum or candy). Emergency products (medicines); seasonal and even differentiated products such as extra services offered to customers.
In the same way, they can be classified by product family, that is, products that are related to each other. For example, groceries, cold meats, dairy products and sweets. This is a way of arranging products that encourages impulse buying.
Compare the sales histories with the planograms that you have used to determine the relationship of the products that have sold the most and where they were located.
So, as we mentioned before, some of the advantages of using the planogram is that it facilitates the correct location of the product, both for the one who stocks the shelves and for the customer.
Remember that knowing what a planogram is and how to implement it will allow you to maintain a constant level of inventory and investment in the store.
Planograms: Why are they important to your brand?
Learn why having well-executed planograms is key to the success of your brand, as well as how to plan them correctly, making them a tool to increase your sales.Why can planograms represent the success of execution at the point of sale? A planogram is an instrument that describes through a diagram the location of the products at the point of sale. It is crucial to ensure the Share of Shelf of your brand since it defines the quantity, number of fronts, height and depth of the product on the shelf.
Shopper Marketing strategies also depend on a well-executed planogram to achieve success, as it is known that more than 70% of purchase decisions are made at the point of sale .
The location is decisive, an example is that sales can increase by 80% by moving a product from the lowest level to the level of sight on the shelf.
What are some essential criteria to define a planogram?
The elements to determine the space that will be attributed to a product on the shelf can be of two types:
Quantitative:
Sales per square meter
Rotation Coefficient
Container Size
Replenishment windows
Qualitative:
Variety vs. Duplicity
Influencing Buyer Behavior
Improve the Shopping Experience
Consumer Reaction
A properly executed planogram according to the planned point of sale strategies has important benefits for the brand such as:
1. Determine the sales potential of each space available for the exhibition
2. Optimize the shopping experience by ensuring visually attractive shelves for customers where they can easily find what they are looking for
3. Accurately control the health of inventories by assigning shelves and fronts based on rotation, reducing stock outages.
4. Ensures product availability by providing field staff with a guide to follow
5. Influence consumer behavior by encouraging incentive or impulse purchases through good strategic planning
Make sure that the planograms of your product are executed correctly and aligned to your Marketing strategy. It is crucial that you can monitor how shoppers actually see your product in the different displays in all your points of sale.
A tool that provides you with real-time evidence with photos and measurement data and planogram validation will help you increase your percentage of sales and gain Share of Shelf from your competitors.
What is a planogram in marketing?
Planogram strategies come into play when retailers organize related products that are within range of one another. In these cases, the planogram design serves as an in-store marketing tool to encourage shoppers to inadvertently purchase multiple related items at once. Product vendors pay close attention to planograms because they know that product placement affects sales.Function
A planogram is a diagram that shows retailers where to place products on shelves, racks, and other store equipment. According to "Retail Merchandiser" magazine, on average store displays hold shoppers' attention for five to six seconds. A well-executed planogram can be the key to making a sale in those few seconds. For example, if customers shopping for toothpaste see mouthwash next to them, they may remember that they need mouthwash too.
Product placement
Retailers refer to planograms to determine shelf heights and the number of products to be fronted. Shelf heights partly depend on the size of the products, but they also adjust to keep items within reach of shoppers. Retailers call a row of products a front, so three rows of items equals three fronts. The number of fronts is important because the best-selling and most profitable products generally receive the greatest number of fronts. These products are also usually at eye level to make it easier for shoppers.
Product providers
Product vendors use planograms to indicate the amount of space they want retailers to allocate to various brands based on product popularity and sales. Planograms are also made to point out new ideas on how to present the products. These charts also play a role in inventory control because they help retailers determine how much inventory they should have on hand to replenish shelves based on the shelf space provided for each product.
Shopping habits
According to "Retail Merchandiser" magazine, consumers make many of their purchasing decisions while they are shopping, and an effective planogram can influence many of them. For example, a shopper who can't find his or her favorite brand in a store might purchase a similar product that is a better value rather than forgo a purchase, because a good planogram places competing products close to each other in a display of value. Products. Additional sales can be generated with compelling display planograms that move shoppers to make unplanned purchases when they like the way the displayed items look, smell, or function.
Planogram: what you need to know to optimize space
Many of the actions carried out at the point of sale (POS) are established by criteria that have been worked on strategically with the creation of a planogram, this together with reliable information sources, adequate human resources and sufficient technology give as result renewed assortments, attractive and eye-catching for the customer.What is a planogram?
It is a space management tool that allows us to design, manage and analyze the linear. This scheme used by retailers at points of sale is important to distribute the merchandise on a shelf, taking into account which brands will occupy which space, the height at which they must be, the amount of each one that must be placed. Its elaboration should not be taken lightly and, beyond generating "visually beautiful shelves", profitable and efficient shelves should be generated.
Be careful with the data:
A Planogram Audit exercise conducted by Storecheck in the second quarter of 2015 for two categories of personal hygiene and grocery groceries, found that the level of execution of the planograms was between 86% and 60% respectively, only 26% of stores are at levels of 85% (acceptable range of execution).
How to define the objectives of a planogram
For the elaboration of a scheme like this, two basic criteria must be taken into account so that it can respond to the commercial objectives of retail.
At a quantitative level:
Sales per square meter
Rotation Coefficient
Container Size
Replenishment windows
At a qualitative level:
Variety vs. Duplicity
Influencing Buyer Behavior
Improve the Shopping Experience
Consumer Reaction
It is absolutely key to monitor how the buyer really sees your product in the different exhibitions that take place at the POS. In addition, it is important that evidence is produced in real time, such as the use of photographs, measurement data, and planogram validation. All these points will help you increase the % of sales and gain Share of Shelf from your competition.
Aspects to take into account for the elaboration of a planogram
Several studies have proven that placing products at eye level will result in higher sales volume, so visual communication is vital. Furthermore, it has been shown that if an item is lowered from eye level to the hands, sales will drop by as much as 20% and worse yet, if merchandise is lowered to ground level, then sales will drop by 40%. The most important criteria for drawing up a planogram are:
Convenience and agility for the consumer
visibility
Incentive to purchase
Positive brand image
From these guidelines you will have the inputs to create a planogram according to the objective of your brand.
In short, these are 10 keys to making a planogram.
It is important that you take these 10 points into consideration when preparing your work plan for the point of sale, since it will allow you to achieve the objectives adequately.
