Planogram: what is it, who needs it and what tasks it solves
Remember your last grocery visit, as we are all grocery retail customers.
Now answer the question: what is important for a visitor at a grocery store? After all, a satisfied customer is a regular customer, which means a constant income for retail. When visiting supermarkets, the client is interested in the convenience of the arrangement of goods on the shelves, the accuracy of their filling, and whether the desired product is in stock. To achieve these and other goals, retail needs a Planogram.
What is a planogram?
A planogram is a schematic representation of a product on a shelf, indicating its quantity (exact inventory).
The product display scheme helps store employees or merchandisers to quickly find the right place for the product on the shelf, and also carries information about the number of units of each article.
In addition to assortment data, a planogram is a visualization of commercial equipment (its width, depth, height, number of shelves) that help plan shelf replenishment and set up an auto order system. Some programs even provide a 3D view of the planogram.
Who needs a planogram and what tasks does it solve?
Planograms are used by retailers and suppliers.
The earlier the retail introduces drawing and the use of planograms, the easier and better its assortment management. An indisputable advantage is the availability of up-to-date data and storage of the previous ones, necessary for understanding the assortment.
Based on this information, you can make decisions for the further development of categories:
1. Defining the roles of categories, as well as strategies and tactics for their development;
2. Evaluation of the effectiveness of the existing range of categories;
3. Effective carrying out of promotional activities;
4. Taking into account the interests of buyers, suppliers, and manufacturers, etc.
Planograms are relevant both for small chains near the house and for supermarkets and hypermarkets. In Ukraine, planograms are already used by Novus, ATB, Tavria V, Pchelka Market, etc.
Learn more about C4R retail automation solutions from our consultants. To order a callback, write to [email protected] or fill out the form at the link.
Benefits of using planograms:
1. Fast transfer of real information about the location of goods from the Central Office to the Stores.
2. Optimization of the display (distribute shelf space so that it can be replenished as rarely as possible and approximately at the same time for all goods) and, as a result, reduce the amount of human labor required to replenish the planogram in the store.
3. An exact list of the current assortment that can be ordered at the store.
4. Assortment assignment based on real data on shelf space in the store.
5. Promote sales by managing the position of the product on the shelf (brand neighborhood, use of the gold shelf, etc.)
6. Analytics of category sales in dynamics. Tracking product behavior based on real data.
We invite you to check the business processes of category management: download the MCM checklist and see where and what can be improved.
Who creates planograms and in what software?
Planograms can be created by a merchandiser from the retailer's or manufacturer's headquarters. To create a planogram of products arrangement (determining a place for each product), specialists use the principles of merchandising and DPR (purchasing decision tree), and the number of faces – based on sales and the desired inventory of the shelf.
On average, planograms can cover up to 85% of product categories.
To draw planograms, you can use both specialized software products and Excel.
However, the use of specially created software has undeniable advantages:
1. It is a single source of data related to the central accounting system (categories, assortment, sales, prices, DPR, etc.)
2. Well-established communication between different departments of the company (commerce, merchandising, shops)
3. Ease of creating planograms – intuitive interface and quick access to functionality (hotkeys)
4. Flexible and custom reporting, etc.
5. Uploading data back, such as the address of an item on the shelf, to create shelf labels and inventory for an ADR. Such a solution is provided by SymphonyAI, and Consulting for Retail is implementing.
Who sets the shelf according to the planogram?
The implementation of planograms can be carried out directly by the store staff or by outsourced merchandisers (for example, representatives of suppliers). In addition to laying out goods on the shelf, the merchandiser can also perform additional functions:
- monitor the shelf life of goods on the shelves;
- post price tags and POS materials;
- control the stock of goods in the warehouse (if the store has a warehouse);
- make photo reports of calculations;
- advise buyers about the availability of goods and/or its location in the store.
You can read more about Category Management for Retail on our website in the description of the "Category Management for Retail Chains" solution. For all questions about our services and solutions for retail, write to [email protected] or fill out the form below.
