What the heck are planograms?

What the heck are planograms?

Surprisingly, I’ve found very minimal information on planograms.  The best explanation I’ve found is on Wikipedia:

A planogram defines which product is placed in which area of a shelving unit and with which quantity. … It is primarily used in [the] Retail sector. Fast-moving consumer goods organizations and supermarkets largely use text and box based planograms that optimize shelf space, inventory turns, and profit margins. Apparel brands and retailers are more focused on presentation and use pictorial planograms that illustrate the look and also identify each product.

Planograms are simply insider maps that show how a section in the store should be set up and laid out.

Examples of Planograms

These planogram images (no affiliation with my work – simply found via a Google Image search) give a better visual explanation:

Some are plain black and white with boxes (and associated codes) representing each product.

Others are in color with mini-photos of each product and each facing that should be on the shelf.

And planogram software often generates a detailed set of statistics about each item on the pictograph.

Planogram Usage

For some background, there are a few reasons why I’ve seen planograms used:

  1. In stores, outside retail representatives and store staff use official planograms to help reset sections, for general section maintenance, to cut in new items, and to remove discontinued items.
  2. At headquarters, retailers’ staff creates new planogram standards to accommodate new items, discontinued items, changing set sizes, and so on.
  3. Manufacturers and their brokers create planogram proposals for new item introductions and during reviews where they hope to win space over competing brands.

This covers some of the basic uses — no doubt, there’s more.  On many levels, I believe that there are planogram issues that can be improved – more to come in future posts.

There are some standard software packages that create planograms, and the output is generally visually awful.  Small typefaces, too-tiny photos of products, harsh colors.

Beyond the aesthetics, analytics within planogram software encourage some measurements that aren’t always efficient for a store.  One in particular that drives me nuts is a focus on loading a shelf with the minimum amount of stock (usually 1 1/4 to 1 1/2 cases). This does prevent the need to have inventory in the back room. However, for a case of 12 or 16 units, that usually translates into a standard 2 shelf facings.

When a store stocks slow-moving items, that inventory can sit on the shelf for weeks and weeks. This ties up inventory dollars for the retailer and distracts consumers from items that might have a broader appeal. Do these items match better with the store’s overall proposition — including ones that never get past the buyer’s desk?  A best-in-class planogram package might include a way to determine if there’s items with overlapping demand, meaning that one of them is probably duplicative.

Kroger patented their own “system and method for mapping of planograms” in 2005, so maybe they’re on to some techniques that their competitors have missed.  What are others doing that beyond the conventional wisdom?