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 store shelves.

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

A planogram can be created manually or using a unique 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 manage the retail space rationally 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, the dimensions and characteristics of goods, the number of faces, and the display's depth, height, and density.

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 product display in the store may be updated to reflect the season, special events, and product rotation. Ready-made planograms help merchandisers to place products logically and conveniently for the buyer. 

When are planograms created?

Planograms are drawn up a month or two before implementation. They are developed or updated in case of:

 - 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 due to 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 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, and prices.

3. Data on trade equipment.

4. Sales data.

To create the best planogram, the planogram manager needs to link everything he knows about a product to the sales data for that category.  When drawing up a planogram, adhering to the basic merchandising principles is essential.

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 the 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. Then, the buyer will reduce the time to find the necessary product.

Efficiency

Rational use of retail space and equipment following the volume of sales.  Hot-selling products will be located in more extensive 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 consider 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 valuable management tool that simplifies displaying items on the shelves.

This is allocating the required space for each product according to sales. Combined with accurate sales data, the planogram is a valuable analysis tool.  So you can measure efficiency and detect layout problems 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.