A tool for optimizing visual merchandising in store, the planogram is a diagram or model that indicates the placement of retail products on shelves and throughout the store.
A full planogram shows every level of the store. It indicates what is being exhibited on each level, what products are stocked on what shelves and the volume of each product on each shelf. If the rules of the planogram are followed, the theory is that the products’ sales and the customer experience are maximized. Kmart is credited with pioneering the planogram.
Sometimes planograms will consist of texts and boxes and others such as those used by clothes manufacturers, may use pictures that show how the products should look when on display. Planograms are often distributed to stores ahead of a new product launch to ensure the product is displayed consistently across each of a store’s branches. Retailers use research to decide how best to make use of the available space.
Analysis of past and current sales patterns influence the planogram. For example, the number of ‘facings’ a certain product should have on display. Margin placement allows the retailer to put those products with a higher profit margin in specific parts of the store and market share placements allow a product to be placed alongside others of a similar nature, decided by how much it’s likely to sell.
Planogramming software helps retailers to conduct stocktaking more speedily and accurately and enables virtual teams of manufacturers, retailers, researchers, store managers and of course, the planogrammer, to come together to plan what goes where, in stores all over the globe.
Contribution to Retail History
Planograms help maximize revenues by displaying merchandise assortments in an attractive and customer-friendly style, enabling efficient shelf replenishment, and optimizing sales performance. New technology such as 3D are now being used by retailers to create more impactful displays and enhance the customer experience.