What is a Planogram and why do you need one?

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Planograms are a pivotal part of any CPG's retail execution strategy. If done right, they can directly lead to a boost in growth and revenue for the entire brand. But what is it about them that makes them so important?
designing a planogram

Compared to e-commerce, bricks-and-mortar retail gives brands a golden opportunity to beat out their competitors: make sure consumers can see you, and you will sell. 

But the issue lies in that first part – how can CPG brands make sure that their product is visible over everything else? They need to sit on the right place in the right category with the biggest share of shelf and the most eye-catching display… there’s a lot to juggle, and that’s just for the brand.

With so many different products wanting to be the star of the shelf, retailers need each brand to provide a visual to show that their idea for the shelf is THE idea that should be displayed. And this image shouldn’t just show how they want their product to look, but needs to be reasonable and consider their competitors as well.

This mockup of the shelf is called a planogram, and no brand that wants to conquer offline retail can thrive without one.

Components of a planogram

As a visual merchandising tool, planograms need to give retailers an idea of what a category will look like when displayed in-store. 

This can be done in many ways, but if you’re serious about your layout coming out on top, a rough sketch won’t cut it. In the past, hand drawn planograms were actually the way to go, but the meta has since changed.

Each part of your planogram needs to be as specific as possible, right down to measuring the size and dimensions of the products you want displayed. Of course, with the variations that can happen from store to store, this can never be one size fits all, but showing practicality and thoughtfulness in your planogram is always a good way to go.

Ultimately, regardless of what you use to create your planogram, the whole package that you present to the retailer needs to include three key components:

The cover page

This includes a general overview of your product and a loose set of instructions.

The visual (also known as the schematic)

This is the main thing retailers are looking for – the image of the shelf that you’re proposing

The SKU listing

These are the specifics, including where on the shelf it should be placed, the sizing, the number of facings etc.

Popular softwares that are used to create the planograms themselves include Shelf Logic, SmartDraw and DotActiv.

Source: SmartDraw

The purpose of a planogram

If you want your product to make an impact on the market and drive growth and revenue for your company, getting your planogram strategy right is hugely important. Your planogram tells the retailer exactly where and how you want your product displayed, which, if you’ve done your research, will lead to higher sales.

On top of that, creating the best planogram possible will not only secure optimal shelf space for your brand, but it will also help solidify the relationship you have with that particular retailer you’re pitching to. With so many brands fighting for space, being the one to present something that is logical, fair, simple to execute and appealing to consumers is a big plus for the retailer and takes a weight off their shoulder. 

Ultimately, the underlying purpose of a planogram is not only to supply a layout that will boost your profits, but to create something that will increase the overall profits and customer experience of the retailer, too.

Creating your planogram is only half the story.

Once it’s out there and your product is on the shelves, how do you know that retailers are staying compliant with your plans?

You could either send your team out to do long, boring audits themselves, or take a much smarter option…

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