A visual representation of the arrangement and display of products within a retail store, used to optimise sales and inventory management.
What is a Planogram?
A planogram (POG) is a visual guide that arranges products on shelves or displays in a retail store. It's used to optimise product placement for better customer experience and increased sales. It considers product attributes and sales history to create an effective store layout.
How Planogram works
- Data Analysis: Retailers analyse sales data, customer preferences, and product attributes to understand which items are popular and how they should be displayed.
- Space Allocation: Based on the analysis, products are assigned specific areas on shelves or displays. High-selling items might get more prominent placement.
- Visual Representation: The planogram is created as a visual representation, often using software, to show the exact arrangement of products on shelves. It includes details like product position, quantity, and signage.
- Store Layout: Store staff follow the planogram to set up displays according to the visual guide. This ensures consistent and organised presentation.
- Performance Monitoring: As customers interact with the displays, sales and customer feedback are tracked. If necessary, planograms can be adjusted to optimise results.
- Seasonal Changes: Planograms are updated to reflect seasonal trends or promotions. For instance, holiday-themed displays may replace regular layouts.
- Collaboration: Planograms often involve collaboration between retailers and suppliers to ensure effective product placement and availability.
- A/B Testing: Retailers might test different planograms in different store locations to see which arrangement yields the best results.
By following planograms, retailers can enhance the shopping experience, increase sales, and manage inventory more efficiently.
Pros of Planogram
- Optimised Sales: Planograms help retailers strategically position products, increasing the chances of customer interaction and sales. By highlighting popular or high-margin items, retailers can boost revenue.
- Enhanced Shopping Experience: Well-organised displays improve the overall shopping experience. Customers can easily find what they're looking for, leading to higher satisfaction and potentially repeat business.
- Efficient Inventory Management: Planograms assist in maintaining appropriate stock levels. By ensuring products are displayed and restocked correctly, retailers can reduce overstocking or stockouts, minimising wastage and lost sales opportunities.
Cons of Planogram
- Rigidity: Planograms can be inflexible and might not accommodate sudden changes in consumer preferences, promotions, or seasonal demands. This can lead to missed opportunities or excess inventory.
- Resource Intensive: Creating and implementing planograms requires time, effort, and sometimes specialised software. Small retailers may find it challenging to dedicate resources to this process.
- Generic Approach: While planograms can improve overall organisation, they might not address the unique needs of every store location. What works well in one store might not be as effective in another, leading to suboptimal results.
FAQ
Below you will find answers to common questions
What is the purpose of using planograms in our retail store?
Planograms are visual representations of how products should be displayed on shelves to optimise sales and customer experience. They help ensure that our products are organised in a way that attracts customers, improves visibility, and maximises the use of available shelf space. By using planograms, we can enhance the overall shopping experience and drive better sales.
How frequently should we update our planograms?
Planogram updates should ideally align with changes in customer preferences, seasons, promotions, and new product launches. It's recommended to review and adjust planograms quarterly, but more frequent updates might be necessary during peak shopping seasons. Regular updates ensure that our displays remain fresh and relevant, helping us adapt to changing trends and customer demands.