A planogram is a visual representation that shows how and where specific retail products or items should be placed on shelves or displays. Thus, making it easy for customers to make a selection of the products that they intend to purchase and helping retailers to increase sales.
“Planogramming is an art used in merchandising and space planning in retail stores.”
A person with this skill is called a Planogrammer. Planograms are also referred to as POGs or Schematics. In retail stores, this activity is performed by Merchandisers, with the help of shelf boys and stockers.
How retail merchandisers decide planograms
Retailers analyze historical and current sales patterns, and then accordingly plan the Planogram. This sales data helps retailers to decide the number of facings are to be given to certain products on the display shelves. They sketch out a diagrammatic representation showing the exact placement of products on the shelves. The products with high sales volume are kept at eye level shelves and they have more facings as compared to other products kept on the shelf of the same category. The eye-level shelves are the best place to display key value items. The resulting planogram is printed out as a visual to be followed and implemented by the merchandisers to restock retail shelves and displays. This gives retail managers of retail stores, more control over how products are displayed and allows them to track and improve on the success of their planograms.
Much planning is involved in the development of these plan to ensure complimentary products are placed close to one another, product assortment is optimized for sales and more. For example- you would see that retail stores are divided into sections, categories, and subcategories or families or subfamilies. This is so planned to make sure that related or complementary products are kept together or near to each other like Toothpaste, toothbrushes and oral liquids(Listerine). The complete category is referred to as Dental Care.
Planogram designing applications are used to design large space planning and retail space management in a big box store and hypermarkets. These sophisticated applications use other information about the product, such as the amount of inventory left for the product and the sales data to build the diagram.
- Presentations of the products play an important role in the retail store. With the help of Planograms; a retailer can actually know and decide where to place the products for creating the maximum purchasing effect on the customers.
- Planogram enables the retail merchandisers to stock the products at the right place with the right quantity and at the right time to attract the customers and prompt them to buy.
- A retailer can make the best possible use of the retail space with the help of planograms.
- The effectively implemented planograms can actually create attractive displays to entice the customers with the help of planograms.
- The planograms are the part of merchandising activity which enhances the beauty of presentations in a retail store.
- Planograms also contribute to maximizing the sale of the merchandise and thus generate extra revenues for the store. A messed up or cluttered store not only fails to attract new customers but also the existing customers will not return back to shop again. The planograms help the retailer to arrange the products in the best possible way and to effectively manage the retail space and allowing the customers to pick up almost everything.
Types of Product Planograms
Horizontal Product Planogram
According to horizontal product planogram, products are placed side by side on shelves to offer a wide range of options to the customers. However, this kind of placement requires more space and generally not preferred by stores, which are lacking space and having a huge assortment.
Vertical Product Planogram
The vertical product placement displays are also known as top to bottom display planogram. The products are displayed on more than one shelf level. This type of planogram is generally followed when the same product has many variances or sizes. It is most commonly used and preferred planogram.
Product Block Planogram
According to block planogram of products, the related products or merchandise belonging to a similar family are displayed at one place together under one common brand. The suppliers prefer this type of planogram. However, it is not preferred by store merchandisers as this type of planogram gives way to brand monopoly. Thus to effectively use the retail space and provide customers with brand options Vertical or Top to bottom planograms are followed.
Brand Product Planogram
Brand product planograms take into account the brand value of the merchandise/product. Every customer has a perceived image of the merchandise and its brand value which decides its placement in the store. A brand product which has high offtake would definitely get the best position as compared to something which does not contribute much to the revenue of the store. Some of the brands are like Pampers, Dettol, Gillette, and several other major brands.
Margin Product Planogram
According to Margin product planogram, the more a product earns profit for the retailer, the better is the location provided to the product on the shelf.
Reasons for Planogram Deviations and their control
Face overs happen when an adjacent product becomes out of stock. The product kept to the left or right of the out of stock item is used to cover the gap on the shelf. The result of the face overs is that shelves look full, without visible gaps on the shelf.
Stuffing occurs when there is not enough space on the shelf to display the products of the same category. Instead, it is “stuffed” in the closest free space on the shelf or stockers reduces the facings of other products to make space. Thus, the extra inventory ends up filled right next to the proper shelf location, this messes the planograms displays.
The face overs can still be considered a way to increase the visual appeal in the store for the shoppers. However, both the face overs and stuffing negatively impact the customer shopping experience and should be avoided.
Merchandisers are responsible for maintaining the planograms. The face overs and stuffing can be avoided by training and educating your internal merchandising team. They should be educated about the planogram management. However, supplier merchandisers should be monitored as they are focused on maintaining the individual planograms of their brands and sometimes they try to occupy more space for their products while reducing the facings of the competitor brands. Therefore they should be closely monitored and asked to follow the store merchandising guidelines.
Out Of Stocks, does happen and there could be several reasons leading out of stock situations. This would lead floor staff to do face overs or stuffing which in turn distorts the planogram. So, the best way is to avoid frequent out of stock by keeping enough backup stock and by following the best ordering practices.
Train on “Why” and “What” – most of the times we tell our stockers what to do, but forget to tell them the reasons and values behind the task. If our stockers are informed about the impact of face overs and stuffing had on the store, they would be far more likely to stop taking the easy way and instead follow processes as intended. Thus there would be no more face overs because they will now reach to the back of the shelf to grab the right product to pull forward instead of the easy face over.
These may look like simple solutions. Training and changing store processes take time, commitment, and constant supervision. Correcting and improving a store that has deviated dramatically from planogram due to face overs and stuffing will take time, and so will getting the entire stocking team trained and developed.
Thus we know now the importance of planogram management and how it affects overall store performance.