As a large retailer or big box store owner or maybe a brand owner, you can’t deny the effect Planograms can have on your business- is it attracting customers or maximizing your sales.
A Planogram is also called a schematic or POG. It is an effective tool that can be used for visual merchandising of a store’s products for increasing the sales or customer purchases.
Planogram (POG) merchandising uses a special schematic that contains a uniform and detailed sales layout for stores called a Planogram. Its main purpose is maximizing the stores’ sales.
In retail terminology, Planogram refers to the merchandising plan for outlining the layout of a store. It is a model or a visual diagram that shows the placement of retail products on the store’s shelves and also includes the layout of the store.
A Planogram presents a flow chart for various merchandise departments within a store and how a particular item is arranged on an aisle or a shelf within the store. The efforts a store puts in its visual merchandising are the key parameters that help in attracting customers and make them buy the store products. Importance of Planogramming: The following are some of the reasons that explain the significance of Planogramming and how a Planogram can be a powerful tool for effectively marketing your goods and products for improving your customer numbers and making profits.
1) A Planogram helps the retailers to maximize their shelf space and draw more and more customers to their store. A visually appealing functional package easily catches the customer’s eye. 2) Statistics: According to Time Trade, 49% of shoppers willingly pay more for a product if they get a highly-personalized in-store experience. 3) Red Bull experienced a whopping 30% growth in new household purchasing by implementation of new Planograms in its 1500 stores. 4) Proper implementation of Planograms helps in bettering of point-of-sale displays to retailers from suppliers with no costs incurred. Fact: Paco Underhill who founded the marketing firm Envirosell proved in their research that merchandise placement has an exponential impact on the product sales solidifying the Planogram implementation. 5) According to the National Association for Retail Marketing, a complete Planogram compliance can result in sales lift of 7.8%. 6) According to a study by Nordstrom, almost 90% of customers purchase something when they are offered assistance compared to 67% of the shoppers who don’t.
CPG Companies and Planograms:
After knowing about the powerful impacts of Planograms in driving the sales of stores, let us understand how Consumer Packaged Goods (CPG) companies deploy Planograms in their stores.
The use of planograms for CPGs can change depending on the type of store. For example, in a grocery store customers may be looking for specific products while at an airport they are likely to be more focused on convenience items and other impulse buys at the same time in supermarkets, it might be altogether different SKUs in focus. The deployment of planograms for a CPG manufacturer can be the difference between success and failure. Successful implementation will help CPG brands maintain competitive pricing, increase visibility on store shelves, and improve customer satisfaction. Deployment of Planograms: While deploying a Planogram, a CPG company needs to consider the following factors for designing a package: 1. Store’s merchandising plan. 2. Package design, color, size, placement and overall appeal. 3. Digitally printed custom pouches. 4. Data on purchases. 5. Sales trends. Customer Behavior Based on the above factors, the Planogram can take the shape of a simple drawing on a paper or a digital representation on a phone or a tablet. Best Practices of Planograms: A Planogram is usually designed by the employee in visual merchandising or a member of the sales, advertising or marketing team. To ensure that manufacturers’ products are displayed in an appropriate and attractive manner for customers, a retail sales merchandiser always consults the Planogram in the store. Since details on placement of Stock-Keeping Units (SKU) and the number of facings are mentioned in Planogram. The following are some of the best practices a store owner has to incorporate to gain the most out of implementing Planograms and maximizing the store’s sales. 1. Brands or retailers will need Planogram software’s which is used mostly by merchandisers and retail managers to make space planning for all the categories among different outlets. 2. As a retailer, who is creating Planograms for the first time, keep it simple and easy to understand for everyone. Create general visual guidelines and train your employees on using and following a Planogram. 3. Study the sales reports and look at your Planogram, monthly or fortnightly. 4. Assign champions or leads in every merchandise section of your store that is the sales and visual merchandising in charge. 5. Know your customers and their preferences and set up your Planogram accordingly. Conclusion: Planogram’s importance and their powerful impact can’t be ignored. It’s high-time that all the retail stores and brands either big or small need to incorporate Planograms in their companies for driving the sales and increasing customers.