One of the most important tasks that a retailer manager has is to decide on which products will be in each shelve. Even though for consumers it doesn't seem like anything that important, the truth is that it does have a huge effect on the retail store sales.
Organizing the different products on the shelves implies a lot more than simply looking pleasant. Space needs to be optimized and strategically used.
With so many different factors to take into account, there's no question that retail managers need to use planograms.
What Is A Planogram?
Simply put, a planogram is a visual representation of each shelve to optimize the space used by each product as well as to maximize sales.
Retail managers have many different options to organize the different products they are selling. They can opt for group them by size, type and popularity, among others. You can learn all about cross merchandising here.
There are different kinds of planograms that managers can use. They can simply include a graphic scheme or they may also include images of the actual products they are selling at the store. This depends on the planogramming software you are using.
When you have multiple retailers, the using of a planogram can be extremely helpful. When a shopper goes into one of your stores, they will immediately know where a product and a specific brand are, which will provide them with a better experience.
There are many different planogram software that you can use. The right one for you will depend on the size of the retailer and your needs.
Why Should You Use A Planogram In Your Retail Store?
Even though you might already know the two main reasons why every retailer should use a planogram - improved sales and product placement -, planograms have other benefits too. Here are the most significant advantages for retailers when they use planogramming:
- Better related product positioning;
- More satisfied customers with a better visual appeal;
- Increased selling potential for every square foot;
- The product replenishment by the staff will be easier;
- Increased inventory control with a reduction of out-of-stock products;
- Effective communication tool for staff.
Creating A Planogram
While larger retailers can quickly hire third-party companies or even have their own in-house planogrammers, this can be extremely expensive. However, you don't need to worry because you have a lot of affordable options.
Some retail managers, understanding the need of using planogramming, started by using just a pen and paper to define the best layout for each self of their store. Some have later evolved to using some software programs like Excel to help them. However with so many new products that keep entering the market every day, the different promotions, and such a wide variety of products, planogramming requires more resources. And using a planogramming software might be the best solution for you.
Planogram Best Practices
When you are using a planogram, either for the first time or even if you already use one, there are some good practices that you should follow:
1. Start Simple:
Planograms are made to help retailers and not to make their lives more complicated. We have seen too many retailers trying to follow an incredibly complex planogram process that took them a few months to begin to implement. The problem is not the time they took, but when finally completed, you are no longer motivated. Besides, if you take a lot of time to do it and you need to make one every month, you'll more likely stop doing it and you will lose a lot of sales and happy customers along the way.
2. Employee Training:
Employee training is an essential part of the planogram process. After all, they are the ones that will need to be replenishing the shelves. More importantly than this though, you may find some reluctance from some employees who don't see the reasons why they need to change their current tasks and process. So, make sure that you explain them the process and the reasons for implementing this change. The fact that you use a planogram in your retail store will lead to more happy customers, more sales, overall, the business will expand. With these results, they could get a better salary and possibly more benefits.
3. Keep Measuring Your Plan And The Results:
A planogram is one of the most important tools that you can use in your retail stores. However, like any other tool, you need to keep track of it and measure the results on a consistent basis. Each month, you should get a report of all the sales that you made and compare them with your planogram. Make sure that you don't notice any discrepancy. You can learn more about measuring your success and conducting a retail audit here.
4. Assign Your Leaders:
One of the things that make a company have continued success is when management involves their employees in some management tasks. You can be doing this at the same time you are implementing and using planograms. You can assign a leader to each section of your retail store and let this person be responsible for the execution of their planogram. They should be the ones to plan their part of the planogram and take care of the design as well.
When Should You Use A Planogram Software?
Simply put, all the time. Planogram software will save you a lot of time planning everything and you can have all the information you need at the touch of a click. However, if you're not really into this idea at the moment, you should consider it in the following situations:
1. Open a new store:
This is one of those occasions when using a planogram software will save you a lot of time, which you will need at this point since there is always so much to do opening a new store.
2. Introduce a range of new products:
When you are about to introduce a range of new products to the market, you don't know how much sales you'll have. By using a planogram, your are increasing your odds to have better results in the end.
3. Create a new cluster definition for your retail store
Some retailers, at some point, have the need to build a new cluster for their store. This may be related to the culture of your customers, some local products or some other reason. So, using a planogram can be quite helpful in ensuring optimum layout.
As you can see, planograms are one of the most important tools for any retail store. Besides allowing you to improve your sales, they help you with making your customers happier, and your costs will decrease since you will have better control over your inventory.