Why planograms
What is a planogram
A planogram is a marketing tool used in retail stores. It is a diagram or drawing that provides details as to where a product should be placed on a shelf and how many faces that product should hold. A planogram is used by the store to increase sales and by suppliers to justify space allocated to brands and new product development. Planograms are a precise way of presenting new ideas for product placement, testing merchandising principles and understanding optimal inventory.
Function
The purpose of the planogram is to increase sales and give the most popular product the best position to attract buyers. Stores routinely change the layout of all the fixtures. For example, the design of the laundry detergent section in a supermarket will be different every few months depending on what is hot and what is in season. The stores use a planogram to decide how the section will look and what products will be most accessible to the customer. Furthermore, with each design of a planogram, the store will make a fixtures look more aesthetically appealing to the customer.
Features
Planograms include shelf heights, product placements and the amount of facings. Shelf heights depend on the size of the products and ease of reach for the client. Product placement describes on which shelf and where on that shelf a product should be placed. A facing is a row of products. Thus, if a product has two facings, there are two rows of that product on the shelf.
Significance
The position and number of facings a product has will significantly alter its sales at the store. It will also change the overall performance of a store. It is much better for a product to be eye level and have the most amounts of facings than to be on the floor and have one facing. It is important for the store to have its most profitable products to have the most facings and be eye level than to waste that space on a product that does not sell nor provide a good profit margin.
Time Frame
The planograms are usually designed a few weeks in advance before their application. A company that specialises in planograms and merchandising will design them using specialised software. Then they will test on dummy shelves to make sure everything fits. If everything fits and works well, they apply it to all the stores they are contracted to.
Key benefits
- Assigned selling potential to every inch of retail space
- Assured product placement
- Improved sales
- Satisfying customers with a better visual appeal
- Tighter inventory control & reduction of out-of- stocks
- Easier product replenishment
- Effective communication tool for staff-produced displays