Economics Essays on Planogram

Planogram

A planogram is a visual diagram that designates where the products should be placed on shelves and racks in a retail store (Barbara, 2016). A planogram has details that direct the retailers where the products should be positioned and the number of facings a product must have. It is a crucial tool used by retailers to increase sales because it tells the consumers where a specific product is located in a store. It also helps the suppliers to justify the space occupied by the brands and helps in the development of new products. In other words, a planogram is a visual method to show how products or their ranges should appear in a store and is a valuable tool for guiding how new brands should be positioned on shelves. A planogram plays an essential role in distribution since it helps in the management of space in the store and guides the consumers where to get the products of their choice (Margret, 2017). This systematic positioning of the products and guidance to the retailers, suppliers, and customers shorten the time all these stakeholders would use to perform certain operations, hence easing distribution of the products.

Figure 1. A planogram for a homecare
and personal care retailer                                            Figure 2. A planogram for a shoe retailer

Planogramming is a technique applied in retail space management and merchandising in a certain company. An individual possessing this skill is known as a planogrammer. Planogrammers are also called POGs (Margret, 2017). During planogramming POGs analyze current and past sales patterns and then make recommendations regarding the number of facings a particular product must have on the retail shelves. Planogramming involves formulating a description of the height of the shelf where the product will be displayed and the types of articles which should surround it. After designing the planogram, it is printed out as an image to be followed by part-time employees usually hired to replenish retail shelves, racks, and displays (Margret, 2017). This process makes it easy for executive managers to keep track of goods and their position in the store.

The main challenges encountered during planogramming process include implementing and verifying a planogram (Rikhter, 2017). Obtaining a perfectly functioning planogram is sometimes a challenging task, especially if one does not have the tools that can help him or her respond to a problem quickly. No matter how well a planogram is designed, it does not take into account the real-life situations that require worker response (Rikhter, 2017). Some instances such as disconnections in data, wrong product placement, and maintenance challenges in the store may cause compliance complications.

In more detail, when the person who plans the merchandise fails to consider the sales patterns, that lead to out-of-stock or there is poor utilization of shelf-space, store data, and company disconnect occur. To counteract this challenge, a merchandise planner should gather the feedback from their partners such as vendors, employees, and store managers (Rikhter, 2017). It is important to have workers exemptions in the right time using their phones. One can also utilize QR readers to collect as much information as possible. In addition, it is imperative to notify the vendors about out-of-stocks. Maintenance challenges in the store: miscalculating the number of peg hooks, shelves, and failure to clean and fix the broken fixture as well as employees refusing to perform everyday recovery to maintain the appearance of the display. These are some of the maintenance challenges planogrammer experience when formulating and implementing a planogram (Rikhter, 2017).

Today planogramming is still an important method of distribution because of the role it plays in the management of space. The number of facings and amount of space allocated to the product normally have a great effect on the goods sales (Barbara, 2016). Using planogramming, profitable and popular products are optimally allocated with enough space. In case of failure to adhere to this principle, the retailer’s opportunity cost becomes significant.

References

Farfan B. (2016, October 14). Retail term: planogram (POG) definition and example. The             Balance. Retrieved from
https://www.thebalance.com/planogram-pog-definition-and-example-2892232

Rikhter, V. (2017). How to implement and verify a planogram. Zenput.com. Retrieved from             http://blog.zenput.com/how-to-implement-and-verify-a-planogram

Rouse M. (2010, November). What is planogram? – Definition from WhatIs.com. WhatIs.com.      Retrieved from http://whatis.techtarget.com/definition/planogram