The planogram is a visual diagram, or drawing, that provides in 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 on 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 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, small and independent retailers often resort to using word processors or paper and pen to optimize shelf layout.
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.
Product placement and improved sales are just two very basic reasons a retailer should be implementing planograms in their shops. Planograms provide many other positive benefits, such as:
- Assigned selling potential to every square foot of space
- Satisfying customers with a better visual appeal
- Tighter inventory control and reduction of out-of-stocks
- Easier product replenishment for staff
- Better related product positioning
- Effective communication tool for staff-produced displays
Any good retailer realizes the key to increased sales is through proper merchandising. A planogram is one of the best merchandising tools for presenting products to the customer. If you aren't using planograms, it may be time to start. If your retail store is already using planograms, read on to learn how to effectively implement and maintain a planogram in our Planogram How-To.