Retail Term: Planogram (POG) Definition and Example

What Is a Planogram? Merchandising Definition, Examples, Description

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Definition

A planogram is a visual plan which designates the placement of products on the shelves and merchandising display fixtures of a retail store. The planogram is usually created by a visual merchandising employee or a member of the advertising/marketing/sales team.  Historically, planograms have been distributed in the form of a schematic diagram or drawing, but increasingly, planograms are managed digitally using tablets and mobile phones, and photographic images.

In the largest U.S. retail chains, planograms are used to create consistency between store locations, to provide proper shelf space allocation, to improve visual merchandising appeal, and to create product pairing suggestions.  The ultimate goal of a planogram is to guide and focus in-store merchandising efforts which should then result in increased retail sales.

Also Known As: POG

Alternate Spellings: plan-o-gram

Common Misspellings: planagram

Uses and Examples of Planograms: A retail sales merchandiser is responsible for ensuring that a manufacturer's products are displayed appropriately and in accordance with the designated planogram.

Why a Planogram Is Important In Retailing

A planogram is a store plan that is designed to put your floor plan to maximum use by placing items in a way that makes them sell.  A planogram is a uniform and detailed sales layout for your store(s).

Planograms ensure that thought and planning go into the design, placement, and implementation of merchandising plans, including shelf space allocation.

 

The intention of a planogram is to ensure that each retail store is optimized to sell the items that they are offering.  Planograms provide specific guidelines to employees to keep on top of restocking and merchandising organization tasks.  Both employees and customers need to  know exactly where items are located so that they can be found and purchased.

Planograms are particularly important with the largest retail chains which have hundreds and sometimes thousands of physical brick-and-mortar store locations.  By utilizing a planogram, each store in the chain can have a very similar layout with customized merchandising strategies that reflect regional preferences. 

Retail chains like Macy's are using their planograms to guide employees in the implementation of their regional "My Macy's" strategy.  In the case of retail chains like 7-11 convenience stores and Costco Warehouse stores, it's important that customers can shop in any goes into any store location and find a similar, if not identical, layout so that they can easily locate the product they want to purchase with ease.

Planograms can help to improve your store’s sales with a visual merchandising plan that displays products in a way that inspires a customer to purchase.  If a customer comes in to purchase one item, a well-merchandised store that follows a well-strategized planogram will motivate shoppers to purchase additional products they didn't even know they want or need.  Similarly, customers who come in to purchase a specific product will find alternatives and selections merchandised in strategic ways that could result in an upsell purchase that the customer wouldn't know about.

How Often Does a Store Change Its Planogram?

Planograms are generally distributed to retail stores in large retail chains at least once per quarter, as seasonal merchandise is rotated into the product mix.  A new planogram would also be distributed in order to showcase new products, to spotlight products during promotional campaigns, and to highlight slow-moving merchandise.

Often different planograms will be split tested in different store locations to determine the most productive version of the planogram, which will then be distributed and implemented by all stores.  In general, when the current store layout seems no longer engages shoppers or motivates purchase, is the time when a planogram needs a refresh.

How Retailers Create Planograms:

To create a planogram you will typically work with some sort of software suite.  There are many different options out there to choose from.  This software suite will have a layout for your store printed on it.  In this layout, you, or the computer, will organize products where they belong.  The products are marked on the map so that those setting up the store can easily grab what they are looking for.

Who Creates the Planogram?

In smaller retail chains, typically management and inventory management employees create planograms which Inventory and Fulfillment or Cashiers then implement.  In large retail chains like Best Buy, planograms will be created by a district, regional, or headquarters team 

In-store managers and Category Managers will be able to provide valuable information about the practical implementation of a planogram and customer responses to it.  Category Managers and Merchandising Analysts will often use that kind f store-level input along with sales and inventory statistics to make adjustments to merchandising strategies, which will be reflected in a new planogram.  

A lot of people think that a planogram is unrealistic because it requires work to develop and implement.  There are plenty of planogram software programs available that can assist with the creation of a planogram.  The work that it takes to create a planogram is worth the effort because it will maximize the productivity of any retail sales space, and support retail employees at all levels in implementing an effective merchandising strategy.