WHAT IS A PLANOGRAM?
A planogram is an illustration or blueprint
usually in the form of a photographic quality picture, depicting
where products should be placed on fixtures (shelves, pegboards,
and palettes, etc.), in a retail store. It shows where the products
are placed and how many products wide, high and deep are required.
The consumer packaged goods market has become
a complex and competitive environment. Consumer lifestyles have
become increasingly fragmented, media and advertising opportunities
have proliferated and retailers have both consolidated and expanded
to meet competitive needs. Combined, these trends have created
a complicated business and marketing landscape.
As consumers become active in more and more activities, they
have less and less time available to shop in stores. Seizing the
opportunity to create one-stop shopping environments to facilitate
this experience, Retailers reacted by increasing store size to
increase product assortments and categories. Super Centers, Mass
Merchandisers and larger grocery and drug outlets resulted.
With larger product assortments, additional categories and more
space for consumers to navigate, it is vital for retailers and
vendors to direct and influence consumers’ purchases. Focused
planogramming is the primary vehicle to accomplish this.
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Providing a computer generated, scaled version
of how a section should look:
- Reduces the time it takes to build the set
- Improves customer satisfaction by making it easier to shop
shelves that are organized and visually appealing
- Makes it easier for store personal to replenish product by
providing a blueprint to follow
- Enables better management of inventory by allocating shelf
space and facings based on movement, which in turn reduces of
- Influences customer behavior like trade-up and impulse purchases,
which result increased purchases and higher register rings
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PLANOGRAM MERCHANDISING PRINCIPLES AND GUIDELINES:
Proper planogram design will influence 5 major
in-store shopping decisions:
- Planned Category:
- When a consumer knows they need a product,
but has not considered product variation, e.g. bottled water
is the requirement, but the size, quantity, and flavor may
not be decided until the consumer is in front of the section
- A consumer does not plan on buying an item,
but selects it on impulse after seeing it displayed
- A consumer intended to purchase Brand
A, but smart planogramming directed the consumer to Brand
B, which is presented as a better value
- A properly merchandised planogram can
influence trade-up or trade-down purchases.
- Shoppers on the go often arrive at a store
knowing they have to purchase things, they just don’t
have a targeted list. A “triggered” purchase
occurs when they see an item on the shelf that serves as
- An incremental purchase is one that is
made as a result of purchasing another product, e.g. a consumer
purchases paint and a the properly arranged planogram reminds
them of the need for a brush, tape, and other items necessary
to perform the task.
- Ensuring categories adjacencies through
proper planogramming are correct, will lead to larger transactions
and happier consumers.
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PLANOGRAM DESIGN OBJECTIVES:
When building a planogram it is highly recommended
to allocate space based on item performance or unit movement.
The cardinal rule of planogramming is to ensure there are enough
products on the shelf to meet the consumer’s demand.
|| Where in the store,
what adjacencies, secondary placement?
|| How much space will
be allocated to the category you are planogramming?
|| How will product
space be allocated: sales, movement, mandates, inventory
|| How will the planogram
be organized: price, brand blocks, and manufacturers…?
|| Would the category
or section benefit from signage or point of purchase
What drivers will determine space and assortment?
Will they be qualitative or quantitative in nature?
Subjective and intangible
“Sales this week
| Quantitative Drivers:
Can be measured using data/numbers.
are up 22% over last year”
|Variety vs. Duplication
||Sales to Space
|Influence Shopper Behavior
|Improve the shopping experience
||Case pack mins / max
||Days of supply
Efficient and Effective Product Assortment:
Determine the optimum item assortment while minimizing duplication
and maximizing variety.
|Efficient = Supply Side
|| Effective = Demand Side
- Reduce Operating Cost
- Reduce Inventory
- Reduce O-O-S (Out Of Stock)
- Increase Sales and Profits
- Increase Margin
- Optimize Variety
- Increase Volume and Traffic\
- Improve the shopping experience
A Consumer Decision Tree, showing how consumers
logically shop a category should be developed to serve as a blueprint
from which your planogram will flow. Does the consumer shop for
the brand, segment, size or price first? If you don’t have
an existing decision tree, one should be created based on your
experience and knowledge of the category.
If you require assistance with this aspect of development, please
contact us at email@example.com. Our parent company, SMSB Consulting
Group, offers a service that will perform the research necessary
to create and effective Consumer Decision Tree.
A consumer decision tree:
- Aligns you shelf set with customer needs
- Servers as the blueprint or map for your planogram
- Identifies the framework for variety without
Established guidelines can also be used to augment or used in
place of a consumer decision tree:
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Section: The entire length
of a planogram. Sections can be one side or a portion of an aisle.
Segment: Vertically divided portions of the
Fixture: Shelves, pegboards, notch bars, etc
on the planogram
Product: A unique item usually represented by
a UPC or ID number. Attributes normally include, name, manufacturer,
category, height width and depth – see diagram how to measure
Position: A Product once it is place on the
Product Placement: This determines how the product
is place on a shelf. For example a 6 pack of cola can sit on a
shelf with 3 bottles facing you or two. See diagram below for
position examples. Note each example can be rotated ie: front,
front 90, and front 180.
Section: Defines the overall height, width and
depth of the gondola that will display your product. The height
is measured from the floor to the top of the backboard. The width
is from left to right and the depth is measured from front to
back. If your section includes a base or kick plate at the bottom,
its height will be deducted from the overall height of the section
leaving you your merchandisable space.
Shelf: This is your standard open shelf fixture
that will hold your product. Measured by height, width and depth.
The height or thickness is measured from the bottom of the shelf
to the top; typically an inch to an inch and a half. The width
is measure from left to right and the depth is from front to back.
Pegboard: An ezPog fixture that is used to hold
peggable product. Its measurements include height, width and depth
along with the definition of peghole spacing. The height is measured
from the bottom of the peggable area to the top of the peggable
are. The width, measured from left to right also includes only
the peggable area. The depth, typically a half-inch, is the thickness
(front to back) of the pegboard. The peghole spacing defines how
close pegs can be placed typically the measurement is either a
half inch or an inch for both vertical and horizontal spacing.
Pallet: An ezPog fixture that is most commonly
used to merchandise bulk product. Its measurements are much like
that of our Shelf with its height or thickness being larger than
that of a shelf.
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