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3 Benefits of Planogram and Why It Matters to Retail Business

iot smart retail in the futuristic concept, the retailer hold the tablet and use augmented reality technology monitor data of out of shelve, price, planogram, campaign of compliance in the real time


Planogram may sound unfamiliar to some people or even businesses, but it provides a considerable contribution to the retail industry. Planogram is a visual merchandising tool that represents or displays the placement of products in a retail shop. Sellers use the software to assist them with visual merchandising because it contains an essential element of product placement. Since it is in the form of visuals, it will be easy to plan out your store’s product placement in detail and product facing, a crucial factor that retailers take into account. According to a study, 70% of purchase decisions are decided in-store, showing how vital product placement is on the shelves.

How does a planogram work?

Planogram is usually created by a visual merchandising staff or a sales, marketing, or advertising team member. The next step is to gather all necessary information, such as buying data, consumer behaviour, and sales trends. It is in visual form but can be in any type, such as paper drawing, and nowadays, it is very likely to be in a digital rendering displayed on a laptop, smartphone, or tablet. After the visual is complete, the retail sales merchandiser will then use the planogram to ensure the products are displayed correctly and appealingly. All the sales merchandiser needs to follow the details provided in the planogram since it offers comprehensive information on where to place each stock-keeping unit (SKU) and how many facings are appropriate to be displayed for each brand.

Maximise Sales

Retailers can optimise sales by using a planogram since they have already included data collection on how displays and products work. Laying a planogram out to the exact location on the shelf is equivalent to using a magnifying glass in your data. That makes it easy to draw out actionable insights into maximising product placement for in-store sales. From time to time, sales merchandisers will learn how product placement affects purchase behaviour and conclude strategies to exploit sales opportunities. 

Just refer to previous sales data and compare that to your current planogram to know which best-selling products are and the location of their placement. By knowing this valuable information, merchandisers can also apply it to sluggish products that are not doing well in sales. Planograms can also provide strategic product placement as in cross-merchandising. In a way, sales can be maximised by laying out these routes. For example, if customers regularly purchase a product at your store, try to place it somewhere they would walk past other items you plan to sell. The alternative is to place complementary products nearby.

Maximise Space

Another planogram’s function is to let merchandisers or retailers make full use of the space in their shop, which, in turn, converts it into a lean and cost-effective business. Planogram assists you in staying organised and gives out a purpose to every space in your shop. In addition to that, planograms support more effective inventory management. More organisation means it’s convenient for staff to optimise their stock levels because there is enough space for all brands that the retailers are selling. Also, note setting up and providing guidelines to third parties such as vendors and wholesalers. As a shop owner, you can create a sense of accountability and ownership.

Increase Shopper Loyalty

As we all know, the retail industry is very competitive, and it is not an easy task to gain shoppers’ loyalty. The best solution to assure shoppers’ retention is to satisfy their needs, which can be achieved using category management. Retailers can apply three category management actions to boost customer loyalty:

  1. Shopper-Oriented Shelf and Store Layouts

Customers want a friendly, logical, and efficient store layout and shelves. The retailer should develop a customer journey through the store and aisles, displaying as many products en route as possible that might spark the customer’s interest. Instead of estimating which layout promotes the best product sales performance, planogram software allows you to create a data-driven comprehensive visual design.


2. Visual Enticing Planograms

Besides data-driven customer journey visuals, shelves must have visually appealing designs as customers usually prefer nicely-designed stores with stylish and clean designs. If retailers don’t use planograms, they have to do a mockup that consumes time and money. Fret no more, as retailers can do it digitally using Intrack’s professional planogram software. Not only that, but the software also has a shelf layout feature that stimulates purchasing behaviour which can uplift your sales performance.


3. Localisation of assortment plans

Another crucial part of category management action retailers can take into account is to ensure an increase in shopper loyalty is a localisation assortment per store or store clustering. Remember that shoppers want to see the desirable products at the right place and at the right time. By localising the product assortment, the overall sales performance will increase and maintain healthy inventory levels simultaneously. 

Intrack is a market research company in Malaysia that provides comprehensive solutions to your marketing needs. They range from an online price check, which offers competitive price checks and monitoring for retailers in Malaysia, to Mystery shopping (hiring paid consumers to shop in stores and collect data). For consultation contract Intrack today!

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