How to Read a Merchandising Planogram?

Retailers use planograms to maximize their selling space. Planograms help organize the display of goods and make it attractive to customers using the rules of merchandising, marketing, and psychology.

What is a Planogram in Retail?

A planogram (POG) is a visual merchandising tool for product placement in a store. This is a schematic plan for placing goods on a shelf or a so-called road map for store managers, who are directly involved in the process of laying out goods according to the planogram. So, the managers who are responsible for the in-store layout of goods will constantly monitor the goods' on-shelf availability and will know the exact place of each item. In addition, the merchandising department, while working with planograms, is able to constantly analyze the layout, as well as track the key sales indicators and inventory.
 

Thanks to an efficient layout, the merchandiser creates favorable conditions for shopping. A thoughtful arrangement of goods increases future sales. And a logically organized layout helps guide shoppers and tells customers where to find the right products. This, in turn, motivates them to make a purchase. Planograms are effective for both small stores and large retailers. This is a great opportunity to plan the layout according to the current demand, features, and customers' needs.

Using special software for planning the layout of goods, you can create store plans with equipment and store planograms on these plans in a few clicks.

merchandising planogram example created in PlanoHero service

A properly created merchandising planogram will show the correct location of each item and SKU on the shelves. In addition, creating a store plan allows you to place commercial equipment, and determine where the promotional displays, checkouts, and additional points of sale will be located.

Understanding the Planogram

In order to be able to place the goods in the right way according to the planogram, the store manager must read the planogram correctly, understand the type, size, and other product specifications, and also identify the equipment where the goods are laid out. A well-designed planogram will indicate the location of each product item (or SKU) on the shelf, display type, number of facings, etc.

The slightest mistake in reading the store planogram will cause an error in the layout. And then all the previous work done by the merchandiser, category manager, marketer, and planogrammer could be a waste of time and resources. And it would be difficult to predict layout results and analyze sales.

How to Read a Planogram?

Your managers need to know how to read a planogram, so they can place the products properly in the store.

• Pay attention to parameters. A detailed planogram makes it possible to read and understand all elements of the product layout and location: product number (number on the shelf from left to right), article number, barcode, supplier, layout order in depth/height, number of facings, inventory, out-of-stock, etc. Focus on each SKU specification and the characteristics of the store fixtures.
• Figure out the type of equipment. The manager in the store must know what equipment is used on the planogram (POG): various display racks, refrigerators, showcases, display stands, advertising displays, gondolas, display cases, signage holders, and more. Therefore, it is vital to be able to recognize the type of equipment on the planogram and place the goods accordingly.
• Identify the products, brands, categories, and product groups. In order to fulfill the correct in-store planogram implementation, the store manager must clearly define the products, brands, and their parameters on the store planogram.  When the manager understands all the information on the POG -  brands, SKUs, grouping, and compatibility of products, he will be able to combine products successfully with those already available on the shelves. This is the most crucial moment when a small mistake can cause a drop in sales or have a negative impact on the brand's reputation.
• The compliance of the layout (product placement). Managers need to know how to display merchandise according to the planogram. Planogrammers or merchandisers can make changes to already active planograms or create new retail planograms according to demand, season, or marketing campaign. Your employees must receive and execute store planograms in time - lay out the goods and ensure that the right product is in the right amount and in the right place.

juice planogram example

Store managers responsible for the planogram implementation don't have to guess the upcoming layout and don't make decisions on the layout of goods. They work with ready-made planograms containing all the necessary information about the layout: product parameters, equipment, brands, number of facings, placement features, etc. After completing the planogram, the manager should compare his executed layout with the received planogram.

Tip 1 (for managers)

Take time to review the planogram.  Ensure that the products on the planogram are correct and are available in the store. Compare the Universal Product Code (UPC), the so-called barcode, with your SKU list.

Tip 2 (for managers)

Take photos of the executed layout and compare photos with the planogram layout. Check the number of facings, sizes, packages, and SKU compliance. Found a mismatch? Correct inaccuracies and only then send photo reports of executed planograms.

When retailers use planogramming services in their retail chain, they get great benefits from such programs. For example, PlanoHero, a service for creating planograms, allows you to create equipment, store plans, and planograms with a product layout. And also send the planogram to the store and monitor its implementation via PlanoHero service. At the same time, the manager in the store will receive not just a merchandising planogram as a visual layout of goods, but will also see a complete set  - a table with a list, types, and special features of layout on the shelves, as well as the product parameters. Such detailed information helps to prevent possible inaccuracies in the layout.

If you allow a situation where the planogram is made with errors and the merchandising of your store does not match the planograms, then there will come a point when you will not be able to evaluate the effectiveness of the layout or analyze sales. Problems can arise when some products run out of stock in the store, and you do not know about them. This, in turn, will lead to a loss of customers, reputation, and lost sales.

Remember: the successful planogram execution depends on whether your managers can read planograms correctly. An experienced manager will immediately determine all the nuances of the layout on the planogram. But situations could be different, and the manager may not have worked with some types of goods before. Therefore, pay special attention to training your employees.