Plano Gram

2012

[RETAIL BUYING & CATEGORY MANAGMENT] Comparison & analysis of planogram of three different categories namely Apparel, Electronics & FMCGs & suggestion for improvement in the planogram.

Abhishek Sinha

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Planogram: The planogram is a visual diagram, or drawing, that provides in detail where every product in a retail store should be placed. These schematics not only present a flow chart for the particular merchandise departments within a store layout but also show on which aisle and on what shelf an item is located. A planogram should also illustrate how many facings are allocated for each SKU.

The complexity of a planogram may vary by the size of the store, the software used to create the planogram and the need of the retailer. Planograms can be as simple as a photo of a preset section or more detailed with numbered peg holes and shelf notches showing exact placement of each item.

Creation of Planograms

Big box stores and larger retailers typically hire merchandising specialists to assist in developing planograms or they may have their own in-house planogrammers. Due to the hefty price tag of most planogram software, small and independent retailers often resort to using word processors or paper and pen to optimize shelf layout.

As competition increases, we're seeing vendors and distributors becoming more aware of the importance of correctly merchandising their products. That awareness is leading to better point-of-sale displays, planograms and other marketing aids provided to retailers directly from the suppliers at no cost.

Planogram Purpose

Product placement and improved sales are just two very basic reasons a retailer should be implementing planograms in their shops. Planograms provide many other positive benefits, such as:

• Assigned selling potential to every square foot of space

• Satisfying customers with a better visual appeal

• Tighter inventory control and reduction of out-of-stocks

• Easier product replenishment for staff

• Better related product positioning

• Effective communication tool for staff-produced displays

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REQUIREMENTS:

• Fixture information

• Sideview

• Planogram

• SKU listing

Below are the requirements for each component:

FIXTURE INFORMATION:

• Shelf descriptions/height (shelf 1 is always 7.375”, shelf 2-9.00”, shelf 3-8.875”etc. – Note: The base shelf is always shelf 1 – working from the bottom to thetop, left to right.)

• Where pushers or dividers are incorporated ensure appropriate space is allowed.

MERCHANDISING REQUIREMENTS/GUIDELINES

Merchandise layout All products/skus should be horizontally merchandised Brands (not skus) can be vertically blocked

Holding Power Verification

Holding power standards require each sku to support a store allocationunit plus 1 piece per facing based on 16” base decks and 15” shelves.(Shelf depths may vary by planogram and should be verified with themerchant.)

Compare And Save

In the case of compare and save merchandising, the private label brand isalways merchandise to the right of the national brand regardless ofwhether a right or left hand set.

Reverse Sets

Both a right and left hand set will need to be provided.

Planogram Height

The top of product cannot exceed gondola height.

Shoppable height of the merchandise cannot exceed 72”.

SKU LISTING/PRODUCT INFORMATION

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• UPC

• sku

• Description

• Size description if applicable

• Product dimensions – height/width/depth for all new and existing skus. (Refer toHighlight anyexisting skus where dimensions have changed.

• Facings - #high/#wide

• Case pack quantities – master/inner if available

• New sku indication

• Indicate if product is merchandised in a tray, including number of units in a tray.

Sideview Example

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A logic next step from the general layout is to place the individual products within the applicable blocks. This is where you start creating a planogram.

The basic version of a planogram is a schematic layout where the products are displayed as little blocks. A more visual version would be one where you use a photorealistic display of each product, often referred to as Live Images. The pictures below give you an idea of what these could look like above.

Benefits

The main benefits of a visual planogram are already manifold:

A logic shelf-layout will please the consumers as they will be able to quickly find what they’re looking for.

It’s a visual proof that the products you’re suggesting to be carried actually fit on the section.

The schematic output is an effective way to increase shelf-reset efficiency. You will have a similar layout in all stores of the chain, contributing to a consistent

shopping experience. Using Live Images, new product packaging can effectively be checked in a “real-life”

environment without the high cost of creating many dummies and actual in-store tests.

New or (temporarily) redesigned products can be checked for fitting on and between the shelves, ensuring seamless roll-out and effective (volume-plus) promotions.

The Study:

We have taken three categories and three different stores in each category to analyze the planogram as follows:

Category Apparel Electronics FMCGs

Store

Store 1 Big Bazaar (Hypermarket)

Big Bazaar (Hypermarket)

Big Bazaar (Hypermarket)

Store 2 Central (Vashi) – MBO

Central (Vashi) – MBO

Food Max (Kamothe) – Departmental Store

Store 3 Levi’s EBO, Worli Reliance Digital Local Kirana Store

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Apparel

1. Levi’s Store, Atria Mall, Worli

2. Levi’s Merchandise at Vashi Central

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3. Similar Merchandise at Big Bazaar, Raghuleela Mall, Vashi

1. Apparel (Denim Jeans)

Comparison Points Levi’s EBO Central Vashi Big Bazaar, Vashi

Presentation of product

Appealing Less Appealing Stacked very closely

Inventory level of Shelves

Lesser than capacity

Full Very less

Height Optimum Ideal Low height

Stock Fewer Enough More choices

Cross-merchandise No No Yes

Visibility Very comfortable Comfortable Less comfortable

SKUs Capacity (Space Utilization)

Lesser Higher Much higher

Space around Spacious Less spacious Cramped

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Appearance Attractive Less attractive Lesser attractive

Product-customer interface

Convenient Organized but not convenient

Messy

Communication of brand identity

Highly Appealing Less appealing Confusing

Profit per inch of shelf space

Least Moderate Highest

2. Electronics (LCD TV)

Comparison Points Central Vashi Big Bazaar Reliance Digital

Presentation of product

Segmented Cross merchandise Segmented

Inventory level of Shelves

Moderate Limited Extensive

Height Optimum More than optimum

Good

Stock Higher Lesser Moderate

Cross-merchandise Yes Yes No

Visibility Suitable Improper Proper Distance

SKUs Capacity (Space Utilization)

Good Minimum Maximum

Space around Cramped Less Spacious Spacious

Appearance Better Good Best

Product-customer interface

Moderate Minimum Maximum

Communication of brand identity

Good Communicated

Less communicated

Best Communicated

Profit per inch of shelf space

Highest Low Moderate

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Electronics

1. Electronics at Central, Vashi

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2. Electronics at Big Bazaar, Vashi

3. Electronics at Reliance Digital, Vashi

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FMCGs

1. FMCGs at Big Bazaar, Vashi

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2. FMCGs at Food Max, Kamothe

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3. FMCGs at a Local Kirana Store

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3. FMCGs

Comparison Points Big Bazaar Food Max Babosa Supermarket

Presentation of product

Organized Organized Unorganized

Inventory level of Shelves

Fully occupied Partly occupied Less occupied

Height Optimum Good More

Stock Maximum Moderate Minimum

Cross-merchandise Yes Yes No

Visibility Best Better Good

SKUs Capacity (Space Utilization)

Maximum Good Maximum

Space around Less Spacious More Spacious Cramped

Appearance Best Good Unappealing

Product-customer interface

Best Better Good

Communication of brand identity

Color-wise & brand wise separation

Color-wise & brand wise separation

Mixed

Profit per inch of shelf space

Comparatively less Least Maximum

1. Suggested Planogram for Apparel

The planogram should serve the following purpose which was not fully served in any of the three stores.

• To communicate how to set the merchandise

• To increase customer purchases.

• To adjust the visibility, appearance and presence of products.

• To make them look more desirable.

• To ensure sufficient inventory levels on the shelf or display.

• To use space effectively whether floor, page or virtual.

• To optimize short- and long-term returns on investment.

• To provide a logical, convenient and inspiring product-customer interface.

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• To make right selection of products available.

• To facilitate communication of retailer’s brand identity.

• To maximize profit per centimeter of shelf space.

• Understand the relationship between space, sales and profit

Denim, the brand’s merchandising focus, in our case, can be rolled and tucked into shelving as shown in the above planogram, can be mixed with accessories on tables and can be hanged from racks.

While the space has a worn, classy look unconventional elements give it an edgy punch while utilizing the maximum space at the same time.

2. Suggested Planogram for Electronics

The following kind of planogram can be used for electronic items. It has the benefit of cross-merchandising and because of different sizes of shelves; space utilization will be maximum as well as appealing to the eye so that customer is attracted towards it.

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3. Suggested Planogram for FMCGs

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Advantages of using this new planogram:

a. Facings and rows can be added to increase sales. b. Products can be bill boarded. c. Stocking labor is radically reduced. d. Insures product rotation, reduces shrink. e. Fixtures can be lifted out for easy re-stocking. f. The planogram can be reset in minutes. g. Universal brackets can be mounted anywhere.

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