What is a Planogram and Why is it Significant to the Retail Sales Plan?

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The secret to better customer engagement is a store built around customer insights

Most retailers are well aware of the basic definition of a planogram – a visual diagram or map detailing the layout of a store and placement of its products. However, these days, thanks to the advancement of planogram software and other technology, the concept goes far beyond a simple schematic of aisles lined with shelves and products. These days, planograms are powerful sales tools retailers use to create customer-centric experiences shoppers look for in a store.

Planograms And The Evolution Of Retail

There was a time, not all that long ago, when stores were laid out primarily from an operational perspective. In other words, the focus was on the most efficient way to manage the space and to display products. Retail tended to be internally focused. It tended to concentrate on business efficiency and space management rather seeing the bigger picture – how the look and feel of a store impacts the customer journey and how that directly relates to product sales.

The advent of planograms would change everything. Granted, in the beginning they were used primarily to maximize and manage product placement. However, as retail continued to advance with new technologies and new philosophies, the art of merchandising also pushed forward.

Store operators came to realize that how they used shelf space, how they handled the placement of products, and how they laid out their stores had a definite impact on customer behavior. More importantly, they came to realize that creating retail space around customer needs and behaviors was key if they wanted to increase sales, revenue and garner repeat business. 

Does your retail business use planograms? If so, are they driving the kind of customer engagement you want?

 

The Planogram As A Tool To Increase Engagement

Planograms have become an essential component for retailers and store operators looking to connect more effectively with their customers. Today’s planograms are advanced merchandising plans that maximize every inch of real estate and shelf space in ways that create an in-store journey built around customer preferences, shopping habits, demographics, psychographics and many other factors. 

In fact, today more and more retailers are calling on companies like The Revenue Optimization Companies (T-ROC) to provide valuable customer and market insight to help guide planogram development. T-ROC specializes in creating customized merchandising and retail management solutions, and counts many of the largest brands and retailers in the world among its clients, including Walmart, Samsung and Apple.

Applying the latest in smart data capture technologies, AI, autonomous robots, mystery shopping programs, surveys, competitive intelligence, and other means of gaining consumer insight, retail management companies, like T-ROC, are providing planogram intelligence with a scope and detail never before possible.

This precise information allows retailers to planogram their stores in ways that resonate with the customer, while also putting a premium on the areas of the store shown to perform best. They’re scheduling product placement and shelf displays in ways that make the most of high-traffic areas, customer shopping trends, top-performing products, effective merchandising displays, peak hours, pricing metrics and much more.

Your Planogram Options

Planograms have come a long way in recent years. As both retail management technologies and planogram software continue to advance, they will open up new possibilities for retailers looking to optimize their merchandising and grow sales.

For many retailers and store operators, the substantial investments in time, personnel, and costs associated with creating an effective planogram solution are prohibitive. Still, there’s no doubt that planograms are essential for any company that wants to make its space and products work as hard as possible. The choices are these:

DIY Planograms

Essentially, this requires you to create your own schematic or follow an off-the-shelf solution that might work fine for the smaller retail operations, but larger stores and businesses will likely find this approach falls short.

Hire a Planogram Expert

There are also professional retail planogram experts you can onboard at various salaries. However, bringing on your own planogram staff member limits that person to the resources you have in house, which may not include vital components of a good planogram program, such as customer research, data capture and analysis, and competitive market studies.

Hire A Retail Management Company

This is the option that may work best if your retail operations are even slightly complex. Partnering with a retail solutions provider like The Revenue Optimization Companies (T-ROC), gives your retail business access to a comprehensive list of retail solutions – from intelligent data capture, to mystery shopping, to merchandising, market research, customer engagement, inventory management and more – all designed to increase performance and grow sales. Not only will they guide you in build an optimized planogram, they’ll do it using propriety data and insights that would be near impossible to obtain on your own.

Which one of these planogram strategies works best for you? Have you considered one or more of them before? 

What To Expect From A Strong Planogram

The right planogram will drive sales and performance, while also lowering operating costs. Here’s how:

  • Create a more customer-centric shopping journey
  • Enjoy better control over inventory and shelf stock
  • Measure the effectiveness of products and their placement
  • Measure the sales impact of merchandising and marketing programs
  • Identify hero sellers. Also, zero sellers
  • Add sales power to every aisle, shelf, and square foot of your store

If you found this piece on planograms helpful, explore more ways to improve merchandising, store appearance, and sales at www.trocglobal.com.