How to Read a Planogram

Retail space can be costly – particularly if you lease it. Maximizing its use can help your business remain cost-efficient.

Planograms allow you to assign selling potential to different areas within your store, helping reduce inventory costs while staying organized.

Some retailers employ planogrammerchandising specialists, while Scorpion offers software which delivers similar outcomes without incurring additional expenses for an external specialist.

Getting Started

Are You New to Retail Merchandising? Are You Confused about Planograms and Reading Them? In essence, planograms are schematic drawings which provide information on product placement and store layout – an indispensable tool used by retailers to increase sales, manage inventory and enhance customer experiences.

Planograms vary greatly in complexity depending on the size and number of products in a store. Larger retailers typically utilize software for planogram creation while smaller stores may take a more DIY approach with drawings on paper. No matter how your create your planogram, keep these tips in mind to make it as useful as possible:

Step one in creating a planogram is identifying all of the products you intend to sell. Once this step has been taken, determine their placement within your store and how many facings each should feature; keeping these details in mind can help prevent costly mistakes which could affect sales negatively.

Once you understand what products will be for sale and their arrangement, it’s time to create your planogram. There are various approaches you can take in doing this such as hiring a planogram specialist or using visual merchandising software like Nexgen POG.

If your budget doesn’t allow for professional planogram services, free templates may also be found online. DotActiv offers free planogram software which is suitable for beginners; SmartDraw provides templates you can download. Regardless of which approach you take when creating a planogram, its goal should always be increasing sales while optimizing every square foot of retail space.

Planning Measurements

Planograms are an invaluable asset to retailers in their merchandising strategies. These diagrams allow retailers to plan how products and merchandise will be displayed within stores while making sure there is enough stock stocked up to avoid out-of-stock situations. Planograms provide retailers with an opportunity to assess the performance of their merchandising techniques and identify ways of improving them. The level of detail in a planogram may depend on both retailer size and product offerings. Planograms with more detail may provide information such as product dimensions, colors and packaging characteristics – as well as store specifications – as well as measurements of each section in the store or aisle.

Effective planograms draw upon data gleaned from retail sales, market research, and consumer behavior studies to design strategies for optimal space usage. Their purpose is to increase sales while decreasing costs and inventory investments – while at the same time maximising engagement among shoppers and sales. A planogram is also an integral tool in managing a retail supply chain as it facilitates goods moving between factories to store shelves where they’ll eventually be sold.

Planograms can be invaluable tools for retailers of any kind, particularly big-box and grocery stores with multiple product suppliers and plenty of room to fill. A well-crafted planogram can increase sales by making sure popular items have enough allocations and facings, and help prevent out-of-stock product incidents which frustrate customers and could ultimately keep them away. However, its principles can also apply to smaller stores.

Creating a Layout

Once retailers have organized the products into categories and calculated sales shares of each item, the next step in planning retail merchandising should be drawing all these outlines onto a planogram. This step involves identifying sales potential for each product as well as what trade equipment will be needed to promote them effectively. It is also crucial that they take into account how this planogram may alter customer flow within the store.

Once complete, a retail planogram can be used to guide the merchandising and display of goods in your store. It helps determine how many facings products should have, when new items should be added and how much inventory each product requires – all making for easier merchandising processes and improved customer experiences.

Retail planograms also serve to encourage impulse purchases. If you have a top-selling item, putting it somewhere that draws customers toward other products could increase sales for other items and create an eye-catching display. Scale and contrast factors must also be taken into consideration to create designs that are visually pleasing yet easy to read.

Utilizing a planogram is an invaluable way to keep your store operating efficiently and increase sales. No matter whether it’s for small retailers or major chains, using this tool can have a major impact on their bottom lines.

Creating a Design

Retailers utilize planograms to optimize product displays and drive sales. From large stores such as Walmart to smaller local or gourmet shops, these planning tools can maximize any type of shelf space while optimizing displays like gondola racks, coolers, vending machines and pegboards.

An integral component of creating a planogram is organizing your products into categories. These could be divided by brand, price range or any other criterion you deemed important for each item. After categorizing all your products, the next step should be drawing schematic outlines of them all – this will enable you to develop an ideal layout that serves your store and target customer best.

Once your planogram is complete, use it to guide your employees when merchandising your products. Plans such as these can include detailed descriptions of where products should be arranged as well as names and numbers of each product – making it easier for employees to locate items needed, while simultaneously creating an atmosphere which attracts customers.

Planograms offer another advantage by helping to ensure you have enough inventory on hand to meet demand, something which can be especially helpful for large retailers that offer multiple product types in multiple stores. By using a planogram to plan and order from suppliers accordingly.

Planograms can help ensure your shelves are filled with only the top products and can quickly identify when an item needs replenishing, saving you from empty shelves and out-of-stock products which could prove more costly in the long run.

Reading a Planogram

Planograms exist to assist retailers in improving sales performance by ensuring every stock-keeping unit (SKU) is in the right place at the right time, but in order to be truly effective they must also be read and understood correctly.

To understand a planogram, it’s crucial to understand what information it contains. A great planogram will include product dimensions, brand and unique product code information as well as number of facings for facings displayed equipment such as gondolas, end caps racks or advertising displays; details regarding how items will be stacked or arranged such as stacking or basket arrangement? Will they be sorted based on size color etc and should also show how many of each product are to be displayed should also be indicated by this document.

Dependent upon how a planogram was constructed, there can be various approaches to reading it. Some retailers use Excel to manually add visual representations while others enlist more specialized planogram software such as Scorpion Retail for more comprehensive schematics.

Due to limited screen space, planograms can be difficult to interpret if you don’t know what information is hidden behind their lines. That is why training employees on using planograms effectively for store merchandising is critical – the more adept your employees become with using one, the easier merchandise management will become and sales increased! All employees should understand and interpret planograms correctly but this step is particularly essential for new managers who may lack prior experience with specific products.

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In this training, I will discuss some of the things to think about when approaching a retailer to sell your products and become a vendor. Hope it helps! 🙂

Karen Waksman,
Retail MBA

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