Effective Planogram Creation Process: How to Optimize Your Retail Space Planning
Planograms are essential tools for retailers who want to optimize their store layout and maximize sales. An effective planogram creation process involves gathering and analysing data, creating a planogram using software, training visual merchandisers, and reviewing planogram performance regularly. In this article, we will discuss each step of the planogram creation process and how it can help retailers improve their operations and drive growth.
1. Gather and create SKU's dimensions & photos database
The first step in creating an effective planogram is to gather and create a database of all the SKUs in your inventory, along with their dimensions and photos. This information is critical for creating accurate planograms that optimize product placement and ensure that shelves and fixtures are properly utilized.
2. Gather all fixtures options and shelves dimensions used in your retail stores
The next step is to gather all the fixtures options and shelves dimensions used in your retail stores. This includes understanding the height and width of each fixture and shelf, as well as the number of facings available for each SKU.
3. Create CDT (category/customer decision tree) for all categories
The third step is to create a CDT (category/customer decision tree) for all categories. This involves understanding the customer profile, buying behavior, and decision-making process for each category. By creating a CDT, retailers can optimize the placement of products within each category and improve the customer experience.
4. Create Planogram using software and review/approve with category heads
The fourth step is to create a planogram using software and review/approve it with category heads. Planogram software allows retailers to create detailed planograms that optimize product placement and ensure that shelves and fixtures are properly utilized. By reviewing and approving planograms with category heads, retailers can ensure that they are optimized for each category and meet business goals.
5. Train Visual merchandiser to use planogram and agree on merchandising rules for each category.
The fifth step is to train visual merchandisers to use the planogram and agree on merchandising rules for each category. This involves ensuring that visual merchandisers understand how to use the planogram software and agree on merchandising rules for each category. By doing so, retailers can ensure that planograms are properly executed and result in optimized product placement.
6. Review Planogram performance on agreed timelines
The sixth step is to review planogram performance on agreed timelines. This involves tracking sales data and other metrics to determine whether the planogram is meeting business goals. By reviewing planogram performance regularly, retailers can make data-driven decisions and optimize product placement to improve sales and profitability.
7. Communication plan – which includes integrating the planogram updates with other departments with proper lead time to ensure execution at the store
The seventh and final step is to create a communication plan that integrates planogram updates with other departments with proper lead time to ensure execution at the store. This involves ensuring that all relevant departments are aware of planogram updates and have sufficient time to execute them. By creating a communication plan, retailers can ensure that planograms are executed properly and result in improved sales and customer experience.
In conclusion, an effective planogram creation process involves gathering and analysing data, creating a planogram using software, training visual merchandisers, and reviewing planogram performance regularly. By following this process, retailers can optimize their store layout, improve product placement, and maximize sales and profitability. To learn more about how Quant Retail can help you optimize your retail space planning, please contact us today.
Here are some benefits of following the effective planogram creation process:
- Improved Product Placement: According to a study by the Quant Retail, optimized product placement can result in a sales lift of up to 5–15%.
- Better Space Utilization: By better utilizing their available space, retailers can reduce the need for costly expansions and remodels. According to a study by Retail Systems Research, optimizing space utilization can result in a 5–10% increase in sales.
- Improved Customer Experience: A survey by Deloitte found that 62% of consumers said that they would be more likely to shop at a store that offers a personalized experience. By creating a category/customer decision tree, retailers can provide a more personalized shopping experience that meets the needs and preferences of their customers.
- Streamlined Operations: By training visual merchandisers to use planograms and agreeing on merchandising rules for each category, retailers can reduce labour costs and improve productivity. According to a study by McKinsey & Company, retailers can improve labour productivity by up to 20% by optimizing their store operations.
- Data-Driven Decision Making: By regularly reviewing planogram performance and tracking sales data and other metrics, retailers can make informed, data-driven decisions that drive growth and profitability. According to a study by McKinsey & Company, retailers that use data-driven insights to optimize their operations can increase their margins by up to 60%.
Overall, following the effective planogram creation process can result in significant benefits for retailers, including increased sales, improved customer experience, reduced costs, and data-driven decision making. By leveraging the power of technology and data analytics, retailers can stay ahead of the competition and provide a more satisfying shopping experience for their customers.
Written for Quant Retail By
Rehan Niazi
Head of Space Planning at Whites
Highly skilled and experienced retail professional with a proven track record of success in driving business growth and optimizing operations.