What Is a Planogram and How to Apply It in Retail
If you’re in retail, then you know that a planogram is key to success. But what is a planogram? And why do you need one for your business? Keep reading to find out!
I remember when I first started working in retail, my manager sat me down and explained what is a planogram. At the time, I had no idea what she was talking about. She might as well have been speaking another language! But eventually, I learned that a planogram is simply a diagram of how products should be arranged on shelves and racks.
In other words, it’s like a map that tells store employees where everything goes. Having this kind of visual guide makes it much easier for everyone to keep the store looking neat and organized – which ultimately leads to more sales. So if you’re wondering whether or not your business needs a planogram, the answer is most likely yes!
What is a planogram?
There are several reasons to use data-driven planograms. All of them relate to these two objectives:
- Data-driven planograms create a more enjoyable shopping experience by catering to the needs and wants of shoppers.
- They help the store to make more money.
Planograms can be used for a variety of reasons.
1. The Importance of Space
If a company wants its products to be popular and profitable, it is imperative to give those products enough space on the shelf.
If the store has a good variety of products, then the shelf space will be allocated in a way that makes the most profit. This is because products that sell quickly will be easy to identify and given more space on the shelves.
2. Influence Shopping Decisions
The decision tree model helps marketers map out a consumer’s decision-making process. This can be used to plan the layout of stores to influence consumers’ purchasing decisions.
Creating layouts that are based on how products perform and how consumers make decisions will help to create an optimized layout that will result in positive shopping behavior.
3. Improve Stock Control
A planogram is an effective way to ensure that the products on a shelf are consistently stocked. This makes it easier to replenish the shelf, which in turn reduces out of stocks, optimizes stock rotation, and increases inventory control.
One strategy to avoid running low on inventory is to set a minimum quantity of products to display. This can help you know when it’s time to place a new order.
Data-driven planogram allows you to compare which items are performing the best based on the amount of shelf space available for them. This data can then be used to make better-informed decisions about which items should be allocated more space.
By tracking product performance, space planners can better allocate shelf space for products that sell well, which ensures that store shelves are always stocked.
4. Visual Appeal and Tactical Position
Creating visual displays of your products that are appealing, make sense, and easy to navigate will help keep shoppers interested and coming back for more.
For example, you can put your most popular items at eye level, or arrange them by price point from most to least expensive. You can also use gondola ends for promotions, and make sure your bestsellers have more facings than other products. By following these tips, you can ensure that your products are highly visible and easy for customers to find.
5. Maximize Sales Per Square Meter
If you know how many days a product will last on the shelf, you can space out the products evenly to ensure that products sell at the same rate.
If a product takes longer to sell out, then it should be given less space on the shelf. Allocate more space to products that have a faster turnover rate to increase sales and profits.
By avoiding these mistakes, you can increase both your sales and your profit margins.
Implementing a planogram in your store can greatly improve sales, as well as increase product visibility.
Retailers can implement planogramming in their stores for a multitude of reasons, including improving sales, increasing customer satisfaction, and optimizing their store’s layout.
As a retailer, it is important to realize that increased sales can come from proper visual merchandising. Planograms are one of the best ways to present products to customers in an appealing way.
If you are a small business owner, then you probably don’t have a lot of time to plan out your store’s layout. Don’t stress out about it. You don’t need any fancy software or apps to do it.
How a Planogram Can Help Increase Revenue
You can compare your sales data with your planograms to see which items are moving and which aren’t. You can then move your low-selling items to a location where they’ll sell better.
And products that aren’t selling well in high placement areas should be replaced with other products.
A retail merchandising strategy, or a planogram, can also help improve customer satisfaction. By highlighting your most popular or profitable products in an appealing way, you can encourage customers to buy more.
Monitoring which products are selling well and which aren’t can help you make better purchasing decisions in the future.
Lastly, by keeping track of your inventory, you can reduce both over-stocks and out of stocks.
Planning for Planograms
So, why should you as a business owner or marketer care about how your products are displayed?
As a marketer, it’s essential to understand retail merchandising and how it works. Retail merchandisers use plans to help stores optimize their retail space and catch the attention of shoppers.
When it comes to planograms, retailers want to make sure they are maximizing shelf space and drawing consumers in. A more eye-catching, functional package can help achieve this goal.
When creating your product packaging, always keep in mind how your store’s merchandise display is set up. Your product’s overall appearance, size, and color can have a huge impact on where it ends up in the store, and how visible it is to potential customers.
So, it is crucial to use the appropriate materials and printing process to ensure the quality of your project.
What you’ll want is a high-quality package that will stand out to consumers and feel good in their hands. It should also be functional and offer what consumers are looking for.
If you are packaging a product, think about the size of the box or jar. This will take up a lot of room on the shelf.
As a business, you know that you need to sell your products in a stand-up bag. Not only will it fit well on a shelf, but it will also take much less room than a rigid container. This also means that stores will be able to stock more of your products in the same amount of space, which is fantastic!
So how do store layouts or schematics help boost retail sales?
A floor plan is a diagram of the layout of a retail store, including where specific products are placed.
This is a diagram of a store’s layout. It shows where the merchandise is placed in the store.
Planograms are used to maximize a store’s efficiency. They are especially useful for smaller retailers, such as boutique shops and local or gourmet food sellers, who may not have as much room to work with.
And 80% of Fortune 500 companies use them. Retail chains like Walmart, Costco, Kroger, and Target use planograms to organize their products on the shelves in a way that is visually appealing and consistent between store locations. Planograms also suggest product pairings to help customers make choices.
As a retail merchandising tool, a planogram helps companies determine exactly how much of each product they need to keep in stock. This not only saves them money on storage costs but also improves the consistency of their stores.
Here is a plan for a shelf layout. This shows where products should be placed on the shelf.
A planogram is a tool used by retailers to optimize the use of space and drive sales. By planning out the layout of shelves, a planogram can help store owners make the most of their limited space. Ultimately, planograms are designed to help stores sell more products.
Now that you know what is a planogram, you can create a retail merchandising strategy that tells customers where everything goes. Having this kind of visual guide makes it much easier for everyone to keep the store looking neat and organized – which ultimately leads to more sales. So if you’re wondering whether or not your business needs a planogram, the answer is most likely yes!