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Effective retail design is about creating an environment that supports the brand and enhances the customer experience.
Paco Underhill
In retail, every square foot of your store is valuable. You’ve invested in prime real estate and stocked it with the products customers want, but are you utilizing every inch effectively?
Designing an effective store layout can be complex—balancing customer flow, product placement, and display setups requires precision. This is where planograms come into play; they are strategic blueprints for optimizing every shelf and display.
In this blog, we’ll explore what a planogram is, its role in enhancing store layout, and the various types of planograms.
A planogram is a visual blueprint for your store's layout, showing exactly where each product should be placed to grab customers' attention and maximize sales. Think of it as a visual map that helps you organize everything from shelves to displays and checkout counters.
The goal? To ensure that every inch of your store is optimized to boost sales and create a seamless shopping experience.
Also known as POGs, space plans, shelf layouts, or retail schematics, planograms are a crucial component of your visual merchandising strategy. They don’t just dictate where products go; they help you design a store that’s both visually appealing and easy to navigate.
For instance, in a store selling baby products, a planogram might suggest placing essentials like diapers and wipes at eye level for easy access while grouping complementary items like baby lotion and bottles nearby. This strategic placement encourages shoppers to pick up a few extra items they hadn’t planned on, increasing overall sales.
Beyond improving your store's appearance, planograms are about making data-driven decisions. By analyzing sales trends and customer behavior, you can determine the optimal locations for your products, ensuring that your store is not just a place to shop but a space where customers enjoy spending time and money.
In short, a planogram is more than just a tool for organizing your store—it’s a strategy for success. By carefully planning product placement, you create an inviting, easy-to-navigate, and, most importantly, profitable shopping environment.
With a clear understanding of what a planogram is and its strategic importance, let’s explore the various types of planograms you can use. Each type has its own advantages and can be tailored to meet specific retail goals.
Planograms come in various forms, each designed to cater to specific retail strategies and goals. By understanding the different types, you can select the one that best aligns with your store's layout needs, ultimately enhancing customer experience and boosting sales. Here are six different types of planograms you might use:
It focuses on putting high-revenue products in prime spots. If a product is a big money-maker, it gets the best shelf space. This ensures that the items generating the most income are easy to spot and grab, helping increase overall sales.
With a margin-based planogram, the spotlight is on products that offer the highest profit margins. These items are placed in the most accessible areas to maximize profit. It’s a smart way for retailers to boost their earnings by focusing on products that bring in the most profit per sale.
This type of planogram prioritizes well-known or premium brands. Products from top brands are given more prominent positions because shoppers prefer trusted names. It’s about making sure the best-known products catch the eye first, leveraging brand reputation to drive sales.
Block placement arranges similar products together, regardless of brand or profit margin. For instance, you might see all types of cereal grouped in one section. This makes it easier for customers to find what they’re looking for and encourages comparison shopping.
In a horizontal planogram, products are lined up side-by-side at the same eye level. This layout is great for letting customers see and compare similar items from different brands all at once. It’s ideal for categories where comparison shopping is key.
Vertical planograms arrange products in a column format. This can help guide customers through different sections of a category, making it convenient to find what they’re looking for. It’s useful for organizing products in a way that enhances the shopping experience and helps customers smoothly navigate categories.
Using the right planogram type can really enhance how products are displayed and make shopping more enjoyable for your customers.
Planogram compliance refers to how accurately a store implements the product layout and display plan outlined in a planogram. Maintaining compliance ensures that your strategic product placements are consistently executed across all store locations.
Planogram compliance is crucial for the following reasons:
According to RIS, planogram non-compliance can result in sales losses ranging from $1 million to $30 million for each US retailer. On the other hand, a study by the National Association of Retail Marketing Services found that adhering to planograms can lead to an 8.1% increase in profits.
When used correctly, planograms can transform your store’s layout into a powerful sales tool. From boosting revenue to improving customer flow, here’s why planograms should be a key part of your retail strategy.
To maximize your planogram, follow a clear and structured process. Here’s a guide to the essential steps in creating an effective planogram that aligns with your retail objectives and enhances store performance.
Start by evaluating your store’s current layout and reviewing sales data. Identify which areas of the store perform well and which need improvement. This analysis will help you make informed decisions about where to place products for maximum impact.
Based on your analysis, select products to feature and determine their placement. High-margin and promotional items should be placed in prime spots, like eye level or near checkout areas. Group complementary products together to boost cross-selling opportunities.
Use software or manual sketches to map out where each product will go. When designing your planogram, consider customer flow, product visibility, and category adjacency.
Arrange products according to the planogram in the store. Make sure the layout matches the design and adjust as needed based on initial observations. This step ensures that products are placed where they will be most effective.
Planograms are critical for optimizing sales, but they need to evolve with changing customer preferences. If your planogram is non-compliant within the week, you are leaking revenue. Therefore, review the planogram’s performance regularly and update it as needed.
Keeping your planograms updated ensures you stay current on trends and new products. Adjustments help maintain customer engagement and satisfaction, balancing a strong sales strategy with dynamic market needs.
Planogram software simplifies the process of creating, managing, and optimizing planograms. These tools offer features to help retailers design effective layouts and ensure compliance:
In conclusion, planograms are a powerful tool for optimizing your store’s layout, boosting sales, and enhancing the shopping experience.
By understanding planograms, their importance, and how to implement them effectively, retailers can optimize their store layouts and achieve greater profitability. Leveraging modern planogram software further enhances this process, providing valuable insights and ensuring compliance for a more efficient retail operation.
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