Palmer Retail Solutions Blog

5 Benefits of Planograms and Why They Matter in Retail

Posted by Kathy Heil on Mar 7, 2018 10:46:03 AM


Even if you’re new to retail, you’ve no doubt heard or read about planograms.  A planogram is a diagram of your store’s layout. A very detailed diagram. You use it to determine where and how you will display specific goods.

Why all the detail? Because those presentations can guide shopper navigation throughout your store. Used well, planograms can boost sales, cut costs, and improve overall customer experience.

What can planograms do for you?

1. Get the most from your shelf space

Retailers make money by maximizing sales per square foot. Using a planogram rather than just “eyeballing” your display plan ensures efficient use of floor space and shelf space so you can sell more.

If you have multiple stores in locations that serve different demographics, you’ll want to tailor each store’s planogram to its customer base. For example, you could devote more high-value space to gourmet foods in a high-income area, or increase facings of culturally-specific items where the neighborhood has a unique ethnic flavor.

2. Maximize visual appeal

Products come in a multitude of colors, shapes, and textures. The way you arrange them is a key component of your visual merchandising. Aesthetics affect customer mood, and they draw the eye to specific areas or items.

3. Increase cross sales

Placing related items near one another in a logical sequence increases shopper convenience and also boosts suggestive selling of additional, unplanned items.

4. Restock more efficiently

When you know where everything is supposed to go and can instantly see if there are gaps, you can keep shelves looking plentiful and inviting. Ensuring product availability increases sales. Efficient re-stocking also allows you to avoid sales-deadening out-of-stocks.

Ultimately, these efficiencies improve inventory management, which also reduces costs. Many retailers don’t realize that stock handling alone accounts for as much as 30% of your staffing costs.

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5. Achieve consistent presentation

A consistent look reinforces your store’s branding, and consistent merchandise placement makes it faster and easier for returning shoppers to find what they want. So presentation improves sales and experience in two ways.

Successful planograms are a work in progress

Sometimes, despite your best efforts, you allocate the wrong amount of space to a particular product. If the facing is greater than customer interest, products just sit there hogging valuable real estate. If sales are snappier than expected, you’ll spend too much time restocking. You could even run out of stock, which makes customers very, very unhappy.

To keep sales and revenue on the upswing, you must regularly compare your planogram to actual sales. Then you can adjust space allocations – or placement locations – accordingly.

Besides, things change. Merchandise ebbs and flows seasonally and according to customer buying whims and trends. A static planogram will soon be out of date if you don’t tweak it. On the other hand, using your planogram strategically will remind shoppers at every visit why they prefer your store.

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Tags: Retail Experience