A layman’s guide to understanding retail planograms

Planograms are essential for retail strategy execution. Here's how to read a planogram in both image and video formats.

A planogram is a visual representation of a retail store that shows where products are placed on the shelves. Retail sales teams create planograms to provide better shopping experiences, while also giving staff a roadmap that tells them where each item belongs. Learning how to read a planogram is important for ensuring it aligns with the actual state of your store shelves, as well as finding opportunities for improvement.

These days, most planograms are digitised and drawn up using specialised planogramming software. These solutions play an important role in sales and inventory management. Although planograms are usually images, more sophisticated solutions use videos and other formats to create a complete, 360-degree virtual walkthrough of the store. This is great for bringing the planogram to life and garnering a better understanding of the customer experience.

The importance of planogram compliance

A carefully designed planogram shows the optimal location of every SKU. Planograms must be adapted to each retail store location and the unique needs of their customers. However, it often happens that planograms don’t match up with the desired in-store experience. This lack of compliance might occur when people don’t know how to read a planogram, but external factors may also be to blame. For example, supply chain disruptions are a common barrier to planogram compliance.

To ensure an optimal shopper experience, reduce waste, and manage inventory effectively, it is essential that planograms correspond with the physical space and layout of each store. This is why retailers should have a separate planogram for each store. Ideally, these planograms should be based on predefined templates for a more consistent experience for both shoppers and staff.

How to read a planogram video or image

Planograms come in various forms, so there is more than one method for reading them. The biggest difference is whether you’re using a simple image-based plan or an interactive solution like a virtual store walkthrough or planogram video.

·      Written planograms are less user-friendly, since they consist only of text and numerical values to indicate the intended location of each SKU in the store. While there may be an accompanying visual representation of the shelf space, these plans do not usually include any product images.
·      Image-based planograms are a lot easier to use, since they use actual product images superimposed on the shelf-space diagram. With visual planograms, it’s also possible to use image recognition software to automate planogram compliance checks, instead of manually matching every SKU on the shelves to its location in the planogram.
·      New technology takes planogramming to the next level with 360° walkthroughs of the store that also help sales reps get a better understanding of the shopper experience. This makes it possible to have a virtual tour of the retail space and see what customers see. You can even use lighting and other effects to garner insights into every aspect of your visual merchandising displays.

Regardless of the type of planogram you use, reading one begins with understanding the design process. This includes factors like space optimisation, range planning, store locations, and list assortment. There’s more to planogramming than just knowing how to read the schematic. It’s also important to have access to the data necessary to understand why SKUs are where they are and which opportunities there are to improve product placement and inventory management.

To ensure staff can correctly interpret the planogram, it is important to ensure the data used to create it is clean, up to date, and relevant. This means avoiding duplicate values, outdated SKUs, and other incorrect information that could result in mistakes in the planogram. SKUs need to be categorised and assigned values based on factors like sales frequency, sale-by dates, and other selected criteria.

A successful planogram is one that is easy to read and understand, but if flexible enough to be readily adapted to changing consumer needs and supply chain availability. The importance of having something visually appealing also shouldn’t be underestimated, since it helps sales reps get closer to the real-world shopper experience.

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