The benefits of regular planogram maintenance or reviews are often undervalued in the planogram process. Planograms by their very nature are a reflection of a point in time that consist of a multitude of different factors often in keeping with what's on trend, in growth or what's popular at a point in time. But of course all of this can change from time to time and usually does! Hence, if you approach the process as a once off exercise then all that work may become outdated or less effective in driving category growth.
Retail trends and world events are driving continuous change
Shopper behaviour continuously changes, there are many factors outside your control the range of products you stock may contribute to how well you can react to this change in behaviour. Shoppers will purchase more of one product and less of another. For whatever reason though, as behaviour shifts, you need to adapt your planograms and their layouts accordingly. If you don’t, you could find your shelves stocked with products that don’t meet consumer demands. The consequences can include everything from dead stock to declining sales. You must ask yourself "do you want to be a leader or a follower"? A leader will always take the brave steps needed to create change, they will have the ability to react quickly and diversify their product mix on the other hand if you take a follower approach i.e. don't change and take a 'wait and see' approach you may find that you get left behind, shoppers are very quick to vote with their feet and go elsewhere.
What is planogram maintenance?
Planogram maintenance refers to the business of the maintenance of planograms or shelf plans that you’ve created for the categories that you stock in your stores or if you are a manufacturer, planograms that you created for your retail partners. You’re also likely to hear it referred to as POG maintenance or PGR's (planogram reviews) That said, its importance should never be understated or underestimated. After all, your planograms are arguably one of the most crucial category management tools available to you. And the last thing you should do is jeopardise their effectiveness. A planogram is a living, breathing document. It’s neither static nor set in stone. That’s why you need to keep them maintained and not forget about them, especially as figures suggest (around 70% of the time) shoppers make the final decision to purchase while standing in front of a fixture.
Your product range continuously changes
One of the main reasons why you need to review planograms is the fact that the category range continuously changes, new trends emerge or manufacturers introduce new products. That means adding and removing products from your planogram. This process may include a major range review or just a minor product update to ensure your product range remains suitable to shoppers’ needs. For example, if a product isn’t performing as expected, you should look to either remove it or reduce its facings and replace any gap with an item that will offer you better sales and profits. Or, you might see an opportunity to open up on specific sub-categories. To fully capitalise on any of the above opportunities, you need to communicate these changes to your stores, planograms are a proven method to achieve this.
How often should you refresh your planograms?
The fact that you must refresh your planograms should no longer be up for debate if it ever were in the first place. That said, it’s still worth having the conversation because it leads naturally to a question about frequency: how often should you update your planograms?
Every category is different, some will benefit from regular reviews and some may only require change once or twice a year. A good way of looking at it is to ask yourself which categories are planned and which are more impulsive or heavily affected by seasonal activity. Take for example products that perform well in the summer verses products that perform better in the winter, your planograms can be an effective marketing tool to drive additional sales in these periods, remember up to 70% of the decision on which brand or product to buy still takes place while standing in front of the fixture!
What can prevent you from maintaining planograms effectively?
As good as you think your maintenance process is, there are many factors that can influence its effectiveness including the fact it may not even get implemented in-store!
Depending on the size your business there may be a large team that can easily manage changes to planograms or minor updates but a retailer with a smaller leaner team may not have the time available to make changes hence extra resource or fewer reviews may be the only solution available to them.
Are you reviewing too often? take for example a category with 7 different bay sizes, 50 different stores being reviewed 5 times a year, that's 1,750 different planogram updates to manage and that's only one category! Another problem with reviewing too often is the fact the sales period may be unduly influenced by seasonal or promotional peaks.
To help with planogram maintenance there are many tools out there that can automate many or some of the planogram processes, one such tool we love is Retail Merchandising Center it takes the hassle out of many of the mundane tasks related to planogram maintenance, like swapping out products or adding in NPD this combined with a variety of very useful reports helps make the planogram review process more accessible and easier to manage.
The communication process
How do you communicate your planograms? Is it difficult for staff to get access to them? Do they know which planogram is the latest one, is the planogram printed out in black & white making it difficult to make out what the products are? Do you rely on suppler help or resources? and do you effectively communicate the changes with your suppliers?
All these are valid questions that may appear to be non-issues but in our experience they can be one of the main reasons for late or incorrect implementations, it always comes down to good communication and an easy way get feedback i.e. its the wrong size, its missing the best seller etc. Many companies still ask their stores to download or sort through different planogram sizes or formats to find the correct one which can also lead to problems.
But there is a better way to communicate planogram updates!