The merchandising field involves several aspects contributing to the promotion and eventually sales of a product. Contributing to this is the visual appeal of products in a store, and this is where visual merchandising comes into play.
Retail stores pay for the space they occupy, and products fill that space. Customers enter that space to navigate and eventually buy the products. To improve the probability of a customer buying a particular product, which might increase your overall profit and revenue, effective use of physical space to grab their attention subconsciously is essential. This is where the retail planogram comes into action.
What is a planogram?
The last time you got your cereals from a supermarket or grabbed your favourite beverage from a vending machine, you encountered a planogram. A retail planogram (POG) is a visual representation of how stores, products, or services should be stated in the display. It’s a tool used for visual merchandising and focuses on the know-your-shelf strategy of in-store marketing.
In simple words, a planogram is a practical schematic drawing to help pin-point slow sellers and keep unproductive products off the shelves and help analyze which products increase revenue and hence deserve more shelf space.
Several synonyms to a planogram are:
- Shelf space plan
The next time you go shopping, take a closer look at how products are arranged and showcased on the shelves. You’ll notice that the best-selling products are located at eye level while the fewer selling ones are located either on higher or lower shelves. This makes shoppers pay more attention to the products meant to be sold more.
Who uses planograms?
The most common users of planograms are retailers. If done correctly, planograms can eventually lead to increased sales and revenue while ensuring that the products are well arranged and organized. This, in turn, makes their maintenance and replenishment easier and provides an attractive appeal to the customers.
Planograms can be very commonly seen at:
- Retail stores
- Independent vending machines
- Online retail stores
- Pharmaceutical stores
- Movie promotions on streaming platforms
Every planogram user needs to update their current planogram frequently enough not to make it outdated. Major retailers even schedule “planogram windows” or “PGR” planogram reviews and give suppliers the option to present suggested changes before the following review.
How can planograms be used effectively?
For these planograms, one phrase commonly used is “eye level is buying level.” This implies that product placement on the shelves plays a significant role in grabbing a customer’s attention.
Some strategies of which a retailer can take advantage while making a planogram are:
- Choose eye level
- Products kept at average customer height’s eye level are more likely to be seen and sold.
- Iconic products should spread out wider.
- Iconic/flagship products should occupy more shelf space. Customers tend to gaze in a tight Z-shape pattern.
- Lean right
- Humans have a subconscious tendency to look and go right. Therefore, place promotional products to the right of the store’s entrance.
- Category drivers
- Arrange key category drivers in the centre of shelves that can make use of the Z gaze.
- Shelf strip effectiveness
- Place promotional labels on shelf strips to capture the shopper’s attention.
- Creating vertical blocks
- Vertical segmentation keeps the shopper’s attention for more extended periods.
What are the benefits of using a planogram?
- It helps retailers avoid the management and maintenance of products that aren’t selling well.
- It helps increase revenue by subconsciously promoting better selling products.
- Reduces input costs by avoiding products that don’t have a good sale.
- Maintains a brand’s reputation by showcasing iconic products on display.
- Keeps products organized and easy to maintain.
- Keeps retail spaces tidy and appealing.
If you find yourself changing your regular flour brand suddenly while exploring the store, consider that the retail planogram worked well.
Shoppers today want their favourite products at eye level. For some stores, fewer high-quality merchandise on the front display could result in a better sale.
The science of merchandising is very efficiently used in retail planograms, which helps stores organize their products in a tidy fashion and make sure that brands and their products are working at their full potential to increase revenue and reduce costs.