What is a planogram?

 

A planogram is a visual diagram of a product layout on trade equipment.  This is an opportunity to see how products are placed on the shelves in stores.

 

The planogram is created on the basis of customer demand analysis, characteristics of goods categories, agreements with suppliers, and the principles of merchandising.

 

A planogram can be created manually or using a special tool - a service for creating planograms.

 

What is a planogram for?

 

A planogram is a visual merchandising tool for managing and increasing sales. Effective in-store merchandising creates an inviting atmosphere that encourages shoppers to make a purchase.

 

Competent display of goods helps to rationally manage the retail space and means getting the most out of every square meter of space.

 

A planogram is a display model that shows the exact placement of goods on the shelves, as well as the dimensions and characteristics of goods, the number of faces, the depth, height, and density of the display.

 

The availability of assortment, goods placement, and sales in stores are monitored with the help of planograms.  These are the possibilities to check, correct and update the layout based on the efficiency of the planogram execution.

 

What is the purpose of planograms?

 

 The main goal of a planogram is to increase sales and profits through efficient product placement. The display of the product in the store may be updated to reflect the season, special events, and product rotation. Ready-made planograms help merchandisers to place products in a logical and convenient way for the buyer. 

 

When are planograms created?

 

Planograms are drawn up a month or two before implementation. They are developed or updated when there is :

 - change of season;

- updating the assortment;

- planning the new stores' openings;

- when improving the strategy of planogramming.

 

History of planograms

 

Retail stores started using planograms for the first time regarding the growing competition in the market. As the retail industry evolved, product category management evolved and retailers needed to adapt their merchandising strategy to stay competitive in the marketplace.

 

It was vital for retailers to understand how and why a shopper makes a purchase and how this can be translated into an engaging visual form because of the changing behavior of shoppers.

There was a need for a shelf display tool to better measure, track and monitor sales figures and get a clear picture of profit and loss.

 

Therefore, retailers began to draw up plans for product placement on their shelves in order to improve the display of products in the store and to stand out from the competition by offering shoppers a variety of assortments.

 

Planograms have made it easier for retail chains to work. This allows the chains to provide a holistic view of the display at the same time in all their stores.

 

What data do you need when constructing planograms?

 

For the formation of planograms and the correct placement of goods, the following data is required:

1. Pictures of goods with characteristics: article, sizes, descriptions, TM, etc.

2.  Assortment of goods, brands, prices.

3. Data on trade equipment.

4. Sales data.

 

In order to create the best planogram, the planogram maker needs to link everything he knows about a product to the sales data for that category.  It is essential, when drawing up a planogram, to adhere to the basic principles of merchandising.

Understanding the product and its purpose will allow you to create logical product placement schemes that match the behavior and expectations of buyers.

 

Merchandising strategy includes both retail store and supplier collaboration, store and category clustering strategy, and category management methodology.

  

Principles of drawing up planograms:

 

Visibility and attractiveness of the layout

The product must be in sight. And then the buyer will reduce the time to find the necessary product.

 

Efficiency

Rational use of retail space and equipment in accordance with the volume of sales.  Hot selling products will be located in larger areas to increase sales growth.

 

Consistency

Products should be broken down into interrelated groups - juices will stand with groceries, and yogurt - with dairy products.

 

Compatibility

It is necessary to take into account the rule of commodity neighborhood and exclude the negative influence of neighboring products. For example, household chemicals next to vegetables and fruits are unacceptable.

Sufficiency - a complete demonstration of the variety of the store's assortment

 

Practicality

A planogram is a useful management tool that simplifies the process of displaying items on the shelves.

This is the ability to allocate the required space for each product according to sales. The planogram, combined with accurate sales data, is a valuable analysis tool.  So, you can measure the efficiency and detect problems in layout in a timely manner.

 

What are the benefits of using planograms?

 

The benefits of constructing and using planograms include:

- better distribution of retail space and, as a result, sales growth;

- aesthetic layouts that attract the attention of buyers;

- increasing the potential of each meter of the shelf;

- customers enjoy logical product placement.