What is a Planogram: Gateway to Retail Success

After long contemplation, you finally decided to start your brick-and-mortar business. But you’re unsure where to start. In construction, a blueprint contains the important information needed before they do everything else; what materials to be used, designs, dimensions, and more. Similar to a blueprint, a planogram will help you understand where the items should be positioned to get the customer's attention and make the most impact.

As a retailer, it is the most crucial and essential part of planning—to come up with your store plan or planogram. Being new in the business you might ask these questions; What is a planogram? How can planograms benefit my store? Learn more about planograms and their use in retail merchandising.

The word "planogram" is used in the retail industry to describe the store layout’s merchandising plan. The efficient use of physical space is critical to the success of every brick-and-mortar retailer.

However, deciding how you'll utilize your retail space isn't always straightforward. It can be dangerous if you don't have a strategy in place, from choosing how to plan the footpath for customers to deciding which product displays go where.

Planograms are helpful in this situation. It helps retailers make better merchandising decisions that drive in-store sales by assisting them in planning the use of their space and gathering data.

Whether you’ll be building your physical store or if you’ll rent out a commercial space, the main goal is to maximize the impact of your visual footprint appeal and design to customers.

What are Planograms?

A planogram (aka POG/Space plan/schematics) is a visual merchandising tool that indicates where and how items should be placed on shelves, racks, and other store fixtures. To maximize sales and minimize wasted space, retail placement is critical. In those few seconds, a well-executed planogram may make or break a sale.

Imagine a customer who intends to buy bread, and sees the rack of cheese near it. The customer then remembers he ran out of cheese and needs to buy one.

Manufacturers use it to advise retailers about the best way to display their products. Planograms can also be used as a guide when analyzing retail results to pinpoint one of the lower sales causes.

The use of a planogram in retail is to maintain continuity across locations, increase visual appeal, and encourage product pairing suggestions. They can also assist retailers in assessing how much inventory each product requires.

A planogram will show you precisely where particular items are located, in addition to being a visual illustration of your store's aisles, displays, and point-of-sale. A planogram includes specific details, such as the exact shelf where an object is stored. Listed below are the benefits of planograms and how it impacts the purchasing decision of your customers.

Benefits of a Planograms

GET THE MOST OUT OF YOUR SALES SPACE

If you rent out your retail space, it could get pricey and have various factors you should consider: size, location, and more.

Regardless of your rental costs, making the most of your available space will allow you to manage a clean, and cost-effective operation. Planograms assist you in remaining structured and assigning a function to each region of your shop.

The items you see on store shelves aren't just strewn about messily; they're arranged, planned, and strategically positioned to maximize the amount of space available for sale.

Among the most important advantages of a planogram is that it allows merchandisers to remain organized while still making the most of their retail space. Planograms make sure that you make the most of your floor space, resulting in an overall rise in revenue.

CUSTOMERS' VISUAL APPEAL

All customers want the same thing—fast and convenient. They need a shelf layout that allows them to find what they're looking for quickly and easily. Customers also want a visually pleasing shopping experience, which can be achieved by using a planogram in your retail store.

Planograms allow you to choose where and how your shelves and displays will be arranged. Planograms will help you create visually enticing shelves and displays of your items that will inspire your customers to make a purchase, whether you're using color block merchandising vertical merchandising, or even horizontal merchandising.

The design of a shelf can have a psychological impact on how customers shop and help to create brand loyalty. Planograms help in making your stock shelves visually appealing to your buyers, encouraging them to buy, and, as a result, increasing your sales.

EFFICIENT STOCK MANAGEMENT

No customer wants to go through every aisle searching for the one item they need to finish their shopping list, only to discover that the item is out of stock. If you're a retailer, you don't want to have a shelf that's been improperly merchandised, resulting in frequent out-of-stocks.

Consumers are unable to purchase because items are not correctly put on the shelf, and the retail store loses out on future sales. This is the most obvious effect of out of stock products. To prevent stock outs, retailers must have a complete picture of the days on which each of their goods is shipped or delivered.

You can maintain the shelves and keep them looking full and attractive if you know where each item is supposed to go and can quickly find open spaces. Your retail store would benefit from successful re-stocking, which will lead to improved revenue, the avoidance of out-of-stock items, and an overall improvement in order processing, which will lower costs.

Maximizing Planograms

It can be daunting to figure out how to use a planogram for your store. Making a planogram is a delicate combination between the rational organization, such as grouping items in the same category, and consumer behavior and psychology, such as using cross-selling techniques and triggering impulse buying behaviors to introduce customers to new or highly lucrative products, and increasing sales by using cross-selling techniques and triggering impulse buy behaviors.

Stores will group all baking goods in the same aisle and then put other condiments in the exact location to remind customers to shop those items simultaneously.

Good planogram examples are items displayed at eye level that are more likely to sell than those shown on the bottom shelf. Items on the bottom shelf, on the other hand, could be at children's eye level. Their lower level makes it easier for kids to grab items to add to their parents' shopping carts. Sugary kid-friendly treats, for example, are often found on the bottom shelves, whereas healthier options are put higher.

Here are several tips on how to make a planogram that will better improve store output to avoid making the same mistakes: It is critical to understand the past and current sales patterns, having these records we can make successful recommendations about how a certain product should have on a retail display.

Correct Assortment: First, double-check that each product category has the correct mix of goods. Without the right approach, assortment planning can be a challenging process, and retailers often miss this stage, only realizing its value after the planograms have been introduced in-store, resulting in stock that does not sell as well as anticipated. Total product revenue, overall units sold, time on the shelf, external market sales, pricing, brand, and profitability are some of the main metrics assortment planning software can track.
Contact your suppliers: Suppliers need retailers, and retailers require suppliers. It is also much more difficult for retailers to execute a category strategy that matches the target customer’s needs without all parties communicating and participating. Information exchange and alignment between category roles are often required for communication between retailers and suppliers.
Planograms should include strategies: Note that planograms demonstrate how items should be put on shelves, so take advantage of the opportunity to incorporate your strategic techniques into your planograms so that customers can see them in action. If you wanted to raise gross profit, you might put higher-margin goods at eye level and give them more room.
Integrate merchandising principles: To ensure that items are placed in the correct places, make sure the merchandising principles are correct. For example, to minimize out-of-stocks, keep a minimum amount of inventory on the shelves for fast-moving items. Positioning profit drivers (leading brands and best sellers) at eye level or positioning supermarket house brands next to the brand leader are two other examples. Correct merchandising principles can ensure that items are always shown on the shelves in a visually pleasing, reasonable, and profitable manner.
Make it easy: You may consider using planogram software—Mock-up costs can all be reduced significantly. The software ensures proper product placement, accuracy in product distribution and gives better visual appeal to customers. There are several planogram software solutions available; it all depends on your specific requirements and, of course, your budget. Opting to use planogram software is a wiser decision since it's faster and easier.

Planograms in increasing profit

You can use your planogram to classify high and low-selling products, as well as their placement, by combining historical sales data with your planogram. If you need to nurture any items, consider relocating them to a higher-selling location. Furthermore, low-selling goods in historically high-selling locations can almost certainly be replaced.

Commit to your plan

It is possible that a retailer's profits would suffer if they do not follow their planogram. Moving the pieces around to improve product discovery would help shift the harder-to-sell items and improve the store's visual appeal. This also applies to packaging displays and end caps.

A product offer, sale, or special for an item will help in the placement of such displays in an effective location. The planogram can be used to strategically position setups for a higher rate of exposure, such as when a customer comes into the store for the first time.

What to do next?

Now that you’ve successfully grasped the importance of having a planogram and knowing how to use it for your business. Let’s move on to promoting your business by building your website.

There tons of website builders on the internet, and most of them require technical skills to fully utilize it. Strikingly, on the other hand, is a free, user-friendly website builder. You can launch your business in less than an hour.

Here few of the many reasons why you should build your business with Strikingly:

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