Planograms: Where Merchandising Meets Analytics
A picture may be worth a thousand words, but a planogram can be worth millions in increased sales revenue.
What is a planogram?
To break it down simply, a planogram is a visual representation of how products should be displayed in store. Within a single planogram, merchandising, analytics, and strategic placement meet for a common goal… increased sales. The amount of information they encompass as well as their use of data can help to grow a retailer exponentially, both in sales and space.
A Brick & Mortar’s Best Friend
At first glance it certainly is daunting to create a successful in-store flow for a shopper. The layout and design of a retail space can sometimes make or break a customer’s shopping experience and be the difference between a one-time buyer or a life-long customer. Planograms (also known as POGs or Schematics) ease the planning process by helping retailers break down their merchandising efforts into categories, brands, and product placement.
Large retailers, such as Walmart, will have a vast array of categories from clothing and cosmetics to toys and tools. The other end of that spectrum would be a gas station which mainly sells on-the-go snacks and drinks, but what they do have in common are planograms. Whether it be racks of gum or aisles of face wash, every inch of shelf space needs to be accounted for.
Once the location of a specific category is determined that space then needs to be divided amongst the various brands. Sales data is a large factor in determining the amount of space a specific brand is given within an aisle. Automations such as “Space to Sales” reports are integral in making successful space planning decisions, but these cannot exist without first having a planogram to work from.
The location of a product on a retail wall is typically determined by the brand itself. New items and products at higher price points tend to be at eye level for maximum exposure, whereas as slower selling or cheaper products are towards the bottom. Within the retail world there are different numbers to decipher and specify products by retailer and across broad product lines…
- UPC stands for Universal Product Code, and it is consistent across all retailers.
- Not to be confused with the sound of a sneeze, a SKU stands for Stock Keeping Unit and it is specific internally to one retailer.
Over time planograms can aid in comparing products from season to season. Which skus sold or which ones barely moved from their shelves? Did a different location on the wall increase or decrease its sales? How do similar products compare to their competitors? These are all questions which can be answered through analytics and reports supplied by planograms; ultimately determining which brand could receive an extra foot of space in the future, and which brand could be downsizing.
Who builds a Planogram?
Some companies have their own in-house planogram departments, but many brands hire out a professional Planogrammer to work with their company as well as support them in the relationship with their retailers. Not only do they build planograms from the ground up, a Planogrammer can also maintain them from season to season. Making it easier to manage large scale projects, as well as organize historical data for future re-sets and optimal sales decisions.
By hiring a Planogrammer, a company can spend more energy focusing on product development, advertising, and the overall future of their brand.
Can I build a Planogram?
If you are a small scale company or brand and the above options are not financially in your ball park just yet, there is planograming software available for use such as EZPOG.
Planograms may be an uncommon word amongst the average shopper, but their presence is essential for the success of a retailer.