Retail Planograms - part1

 

A planogram is a visual diagram, or drawing, that provides detail where every product in a retail store should be placed. These schematics not only present a flow chart for the particular merchandise departments within a store layout but also show which aisle and on what shelf an item is located.

 A planogram should also illustrate how many facings are allocated for each SKU. The complexity of a planogram may vary by the size of the store, the software used to create the planogram and the need of the retailer.

Planograms can be as simple as a photo of a preset section or more detailed with numbered peg holes and shelf notches showing exact placement of each item.

Creation of Planograms

Big box stores and larger retailers typically hire visual merchandising specialists to assist in developing planograms or they may have their own in-house planogrammers. Due to the hefty price tag of most planogram software packages, small and independent retailers often resort to using word processors or paper and pen to optimize shelf layout. I, myself, used an Excel spreadsheet for my planograms. It took some time to create the template, but once it was done, it was a great tool for my stores. 

As competition increases, we're seeing vendors and distributors becoming more aware of the importance of correctly merchandising their products. That awareness is leading to better point-of-sale displays, planograms and other marketing aids provided to retailers directly from the suppliers at no cost. Marketing firm Envirosell, founded by Paco Underhill, were the pioneers of finding the best spots for merchandising in the store. They placed cameras in stores and watched customer behavior. This practice led to planograms that were driven by the customer versus the store. In other words, by identifying the most "viewed" parts of the store, they could predict sales.

After all, the spot that is getting the most customer eyeballs will obviously also yield the most sales. The fascinating part about their research is that it is not always the endcap.  What they did prove is that placement of merchandise had an exponential impact on its sales. Thus solidifying the case for planograms.

Follow this subject in the second part of this article.

Compiled in Editorial Board of Retailiran 

 

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