July 11, 2023

By Michael Wilkening, ARC Communications Manager

As we grow the Space Planning Community, we have begun to curate a wide range of reference materials for our industry. This includes fundamentals documentation suitable both for members new to space planning, as well as seasoned professionals looking to refresh their knowledge or explain fundamentals to colleagues looking to learn more about the business.

Below is an excerpt of our “Planogram FAQs” document, which we’ve made free to all readers. Members can access the full document in our Member Resource Library. We hope you enjoy this sample of our expert content.  

What is a planogram?

A planogram is a schematic drawing used by retailers and product manufacturers to calculate the optimal space allocation for items on shelves. The planogram is one of the key elements of micro space planning, which relates to product placement and presentation on shelves within the store. The goal is to give shoppers what they want, where they want it, and the planogram is an aesthetically pleasing and space-optimized visualization of “what good looks like” for retailers and shoppers. Using a planogram rather than just“ eyeballing” store shelves and displays ensures accurate and efficient use of floor and shelf space.

How is a planogram created?

Planograms are created in collaboration between retailers and their supplier partners. Category Managers and Buyers define the expected assortment or range of products they want to merchandise in their categories. Space Planners provide them with location and fixture constraints for merchandising in stores, as well as space productivity requirements. A combination of Space Planners, Planogrammers, Planogram Analysts, Category Managers, and others may be involved in the actual building of the planogram. Ultimately Store Execution Teams use the planogram to stock and maintain shelves.

A planogram represents how the shelf looks (or should look) at one point in time. While it helps ensure consistent product placement, it should be flexible. Space Planning, Merchandising, and Category Management teams re-evaluate planograms frequently, tracking what sells and what does not, to make adjustment for the benefit of the overall store.

What are the key components of a planogram?

Planograms must be tailored to the store, and there is no one-size-fits-all solution.

However, planograms will usually include the below elements:

Together these measurements determine how much product can be displayed in the designated amount of space. Conversely, they can assist in choosing and arranging fixtures to accommodate the amount of merchandise desired.

Is technology involved?

Once sketched on paper, planograms are now created as sophisticated and color-coded digital images using specialized software. Computerized space planning creates a three-dimensional rendering of the exact store and shelf conditions so that space planners can move products and fixtures with a mouse click. These visualizations can quickly identify good and poor performers on the set or point out potential out-of-stock risks for fast-selling items.

How is planogram performance measured?

Numerous metrics exist to assist retailers and suppliers in this all-important goal. Some KPIs include:

• Sales/profit data: Simply put, which items are selling best within the planogram? If they are continuously out-of-stock, it’s time to increase inventory, and fast.

• Inventory turn: This measures the number of days it takes for an entire planogram’s inventory to sell and to be restocked.

• Days of supply: The best planograms have item supply matching rate of sale, so that some items don’t have a huge backlog while others are always 1-2 days from being sold out. This measurement helps combat significant imbalances within the planogram.

Access the full Planogram FAQ’s document found in the Member Resource Library.

New to the community? Sign-up for our bi-monthly newsletter for more great space planning content.

Want to become a member to network with peers, train your team, share best practices, and more? Contact our member services team today.

---

About the Author: Mike Wilkening, Communications Manager, for the Association of Retail and Consumer Professionals (ARC).