How to Read a Planogram?
The planogram is a tool we use in retail to plan the location of merchandise displays, and if you're a store manager or related staff, then you're no stranger to it.
But if you are new to it, you may have a lot of questions. What is a planogram? How should it be read? What does it contain and what should you look for when reading it? Let me answer all that for you!
What is a planogram in retail?
In retail, a planogram is a visual icon or floor plan that is meant to facilitate the display of where, how, and how the merchandise is to be displayed in the store. The staff involved simply follow the instructions of the planogram.
But a planogram is not just a drawing. It is created based on sales data, customer preferences, market data, etc., and then combined with the characteristics of the merchandise and the style of the store. So a good planogram will play a very crucial role in your retail business.
What’s included with a planogram?
Typically, a competent planogram is one that contains a lot of information that comes up about your store, so let me tell you what's in a planogram about your store.
The general layout diagram
There are usually two in a layout plan. One is the store planogram, which shows the layout of the entire interior space of the store, tells you how the shelves are placed, what aisles are set up and some special display areas.
Merchandise details
For merchandise details, there will basically be three areas of information: product name, SKU and barcode. This information is there to facilitate inventory management and sales management.
Display method
The display method in planogram will clearly tell you where the products are placed, including which level and which position of the shelf it is. Next is the way the products are arranged, such as brand, category and price etc. This information is labeled for you to implement.
Space allocation
You will be given instructions on how to divide the display area for each product category and how high to place the products.
Quantity and stock
Quantity and stock represent the number of items placed on the shelf and the stock of the corresponding item. Suggested replenishment frequencies are also indicated, but we recommend that you make decisions based on actual sales.
Visual guidelines
Usually, there will be some modeling images or actual pictures to give you as a reference picture to provide you with a visual reference.
How to read a planogram?
When we understand what a planogram contains, it becomes easier to read it. So I'm going to show you how to properly read or understand the planogram in an easy-to-understand way.
Understanding the layout
The first step is to understand the layout of the planogram, which will be labeled with the distribution of each area, telling you where the shelves are, where the aisles are, where the promotional areas are, and so on.
Shelf layout
The layout of the shelves here I need to emphasize for you separately, we need to see the detailed view of the shelves. In addition to the view will tell you how many layers and each layer corresponds to which products, we also need to pay attention to the number of shelves and height, because different products may require different display height.
Product details
In terms of product details, the planogram gives you the product name, SKU, and barcode, which are used to label the products and help you with inventory and sales management. All you need to do is follow the information on the planogram and don't get confused. But you also need to be careful that all this information is correct.
Display method
In the planogram, there are rectangles or boxes to mark the position of each item, and the number of customer-facing displays for each item is clearly indicated, usually by a number, e.g. "3 Facings".
Stock quantity
Next to each product position, there is usually an indication of the number of products in each position. When we place the products, we can put the corresponding quantity of products according to this information.
However, although planogram has suggested replenishment frequency and quantity, it is better to base on the actual sales data.
Example pictures
To help you understand how to display your products, the planogram is also equipped with example pictures. They show you which products are placed in which position, which products are marked as specials, which areas are promotional and so on.
How do I create a planogram?
Making a planogram is a systematic process, and to ensure that it is rigorous and scientific, we usually need to have a lot of preparations before making it, so I'm going to briefly tell you what they are.
Data collection and analysis
There are about four aspects of data that we need to collect and they are:
Sales data
We need to collect sales data for the past roughly 1-2 years and filter out the best-selling and slow-selling products.
Customer preference
From the sales data, we can roughly see the shopping preferences of customers in the area or city where the store is located, so that we can basically determine the type of customers.
Market trends
With the change of time, the market trend is also different, we need to have an understanding of the current popular and emerging products.
Competition analysis
If you don't have a retail business that overlaps with your business for 2-10 kilometers around you, then this can be skipped. But if there is then you need to analyze how your competitors are displaying their products and what their marketing strategies are like, it is advisable to actually go and observe them.
Determine the display strategy
Once the data has been analyzed, it's time to determine the display strategy. Determine the categorization of the products, the allocation of space and so on.
Create a planogram
Next, we will start to create a planogram, usually using professional planogram software, common software is JDA, Shelf Logic, DotActiv, etc..
Then we start to draw the planogram of the store, to plan and mark out the location of supermarket shelves, aisles and some special areas such as promotion areas. We also need to determine the layout of each shelf, its height and the position of each item placed in the shelf.
Adding details
After creating the planogram, we need to start refining the details, such as labels and logos for the products, sample images, etc.
Review and revision
After the planogram is completed, it is recommended that the planogram can be reviewed within the company with the relevant team members to make sure that the plans and data in it are okay.
When everything is confirmed, then the planogram is ready for implementation.
Conclusion
At the end, please allow me to introduce you to us. We are a shelving manufacturer, we not only manufacture industrial shelves, but also produce supermarket shelves, display racks and related equipment for retail business.
If you still have a problem with your retail business, give us your problem, our professional sales and design team will help you to solve the problem and can provide you with a professional planogram.