Retail shelf planning, often overlooked yet always critical, is paramount to a strong sales strategy. After all, it is the design of your store that has a direct impact on the customer experience and, ultimately, on sales. However, orchestrating an efficient layout involves numerous factors such as customer flow, product placement, and checkout arrangements. The star of this complex mechanism is the retail planogram, the interface between the customer and the product on the shelf.
We've prepared a quick guide to help you plan your retail space effectively while avoiding common mistakes. Learn about the critical role planogram execution plays in driving sales and the breakthrough tools that will help you succeed.
Key Takeaways
Proper planogram execution ensures merchandising strategies convert into actual shelf results.
Planograms maintain brand consistency.
Execution gaps lead to lost sales.
Visual checks & tech tools help compliance.
Store staff training is key.
Real-time data can alert to deviations.
The crucial role of planogram execution
The primary goal of the planogram is to increase sales and maximize the available retail space. This is achieved by ensuring that the most popular and profitable products are displayed better and more prominently placed on the shelves. Therefore, all aspects of the planogram must be based on sales data and solid customer satisfaction analysis, as the quality of the planogram determines the company's profit and the success of the entire product life cycle.
Mastering planogram execution
The development of retail planograms begins long before the product is placed on a particular shelf in a particular store. Usually, managers create several different planogram layouts at once, adapted to different types of retail equipment, store layout, assortment, certain activities, etc. Once created, the planogram does not remain static. Even a standard layout should be adjusted now and then and updated at least once a year. Not to mention a seasonal or promotional layout, each of which has a specific time frame.
In general, the key factors for changing the planogram are fluctuations in demand and assortment updates. However, the need to create or modify a planogram may be caused by the opening of a new store, rebranding, changes in business strategy, etc.
Step-by-step planogram implementation
Ok. So we now know what planograms are and what they can do for us. Let’s now turn to implementation. Beware, the following tips are meant as general examples and your case might require a more tailored implementation.
1. Time required to implement the planogram
First of all, the timing of the planogram launch must be determined because both its preparation and implementation require time and resources (logistical, human, and intellectual).
Seasonal and promotional displays are more time-sensitive: the time during which seasonal and promotional products should be on the shelves is clearly defined and limited, and the effectiveness and success of everything planned depends on hitting the right window.
As for promotional activities, special retail store equipment may also be involved as well as POS materials, and other marketing tools related to the promotion. Therefore, failed planogram compliance may have negative consequences.
Next up, is the standard store layout. You can use your own schedule with each category updated, as mentioned above, approximately once a year. The decisive factor is the availability of free resources, primarily human resources, for the retailer to perform operations to update the planogram. Of course, this "standard" schedule can be adjusted.
A standard planogram is characterized by a so-called launch window – a time interval rather than specific days of its execution. For example, a new planogram may have a launch date of April 1 and a launch window of 15 days. This means that the planogram should be executed no earlier than the beginning of April and within no more than 15 days (it could go faster as well).
2. Location(s) of planogram execution
This is quite self-explanatory: the planogram can only be changed at a specific outlet, in a certain type of store, or across the entire chain. Why this happens in this way and not in another way may depend on various reasons: sales figures for a particular store, regional peculiarities, agreements with local manufacturers and suppliers, logistical issues, etc.
3. Who executes the planogram
Who exactly (retail store staff, manufacturer's staff, outsourced staff) will implement the planogram on the ground also depends on many factors: the scale of the work, the importance and size of the category, the size of the chain, the availability of standards and brand book in the chain and the impact of changes in the planogram, the use of new and/or specialized equipment or lighting, etc.
4. How the planogram will be implemented
These are specific instructions that must be communicated to the field (to the outlets), which detail all the steps to implement the planogram at each location, the responsible persons, the algorithm of actions in case of questions and problems during implementation, and the mechanism for reporting on planogram compliance.
Tools and resources for successful retail shelf planning and planogram execution
Once the phase of creating and implementing your first planogram passes, each of your next new or updated planograms should be based on the results of the previous one. In other words, the foundation of retail space planning and planogram execution must be data: data collection and analytics.
Modern software, such as LEAFIO Shelf Efficiency, can almost completely automate the vast majority of processes and operations, significantly speeding them up and communication between managers in offices and staff at points of sale.
LEAFIO's merchandising management software enables the creation, execution, and analysis of the effectiveness of retail planograms. As with all LEAFIO’s software, it was developed by a team of specialists who have a good understanding of the routine work of category managers, sales representatives, and merchandisers. The solution helps retail specialists to:
- quickly (in a few clicks) create data-driven planograms, replicate and modify them, as well as create special planograms for individual retail stores;
- manage many planograms simultaneously (relevant for large chains);
- analyze the effectiveness of planograms thanks to the built-in analytics module;
- organize the process at the macro level (floor and/or department plans) and the level of a single shelf;
- organize and optimize communication between staff in the office and the field using a cross-platform mobile application: quickly communicate tasks, see the correctness of their implementation, and monitor planogram compliance.
It should be noted that the planogram solution can be supplemented and integrated with other products of the company, in particular, with LEAFIO Inventory Optimization and LEAFIO Assortment Performance.
Common mistakes in retail shelf planning and planogram execution to avoid
It’s only those who do nothing that make no mistakes. But why not learn from other people's mistakes? Below are the most common mistakes that typically occur and should be avoided when planning retail shelf space and implementing planograms.
Overcomplicating layouts
The more complicated and confusing the planogram is, the more likely staff will make mistakes when implementing it and the worse it will be perceived by customers. This can lead to lower sales and a poor customer experience. Your planograms should be as simple and clear as possible, helping to quickly navigate and find the right product, and not vice versa. The staff should have clear instructions on how to implement the planogram and receive regular training.
Neglecting updates and adaptation
The process of creating a planogram does not end with its actual creation and execution. Field staff should regularly review the store planogram for relevance and effectiveness and, if necessary, adapt it to the specifics of a particular store, which, for example, may have its localized assortment plan or special retail store equipment.
Ignoring customer insights
A satisfied, ideally regular customer of your store is the best indicator of the success of all your work as goods move from the manufacturer to the buyer. The planogram is its last stage, so do not neglect the study of consumer opinions and take the chance to adapt strategies to the characteristics and needs of a particular outlet.
It should be noted that most common mistakes are eliminated by default in modern specialized planogram software, but this does not mean that user managers should not be vigilant when creating, implementing, and monitoring planograms.
Fine-tuning your approach
However, fancy software solutions are not a panacea. Even the best strategy and the best-looking planogram may not work without regular performance reviews and prompt changes.
Importance of regular audits
Regular audits are very important for tracking the correctness of your strategic and tactical actions, the sufficiency of available resources, the need to make adjustments, and the review of the planned and actual values of key business indicators. The presence of analytics and monitoring modules in the aforementioned LEAFIO Shelf Efficiency planogram software, including the mobile application, will become your smart assistants in conducting audits.
Collaboration with suppliers and staff
Any plan, initiative, or campaign can be undermined by irregular deliveries, lack of stock, or insufficient motivation and knowledge of your staff. As the saying goes, you should keep your friends close, so it is important to remember who your real friends are: satisfied customers, trained and loyal staff, and good relationships with suppliers. Keep an eye on these friends and the success of the implementation of strategies, execution of planograms, and other elements of visual merchandising and supply chain is assured.
To sum up
People and modern technologies sit right at the core of any business. A satisfied customer, a reliable partner, and trained and motivated staff, combined with modern planogram software for automating retail shelf planning and making data-driven decisions are the foundation of your retail business success.
Planogram execution is a complex process that is difficult to manage without additional software as a data-driven solution can ensure your retail success. Leveraging sales data to drive merchandising and automate the merchandising process is the real next level for today's businesses. Finally, it is precisely solutions like LEAFIO AI Planogram software that can quickly and seamlessly allow you to meet the automation needs of your retail business.
Have a question?
Have inquiries about retail automation or optimization? Talk to our expert for solutions!
Alex Bilousko
Head of customer success
