Posted: April 17, 2014, 9:40 a.m. EDT
Planograms allow retailers to tell a story, promote new products, generate add-on sales and more.
By Don Jergler
Planogram best practices abound, but first and foremost, retailers must make their stores "shoppable” to consumers.
That’s according to Jason Hart, director of marketing for PetSafe, a brand of Radio Systems Corp. in Knoxville, Tenn., who advises retailers to do this by grouping like items together and also adding signage to highlight the benefits.
For manufacturers, that means visiting a store, evaluating the space and creating a planogram that includes what is around that space in order to map and determine how the a product will fit in, he said.
But for retailers, it’s about getting into customers’ heads and figuring out their mindset, Hart said.
"You need to think like a consumer, understand what information they need and make it easy for them to see it, which may mean extra signage or multiple facings,” he added.
With the help of planograms, retailers can tell a story and turn browsers into buyers. Pet Edge Dealer Services
Beyond product promotion, planograms offer many benefits, said Wade Nilson, vice president of independent sales at Natural Balance Pet Foods Inc. in Pacoima, Calif.
"Planograms are best used to assist the sales team to help set up retail stores in a visually appealing way, to project and promote new products and find them proper placement, and to increase overall sales volume and return business,” Nilson said.
Using a Grid
Think in grid format when devising a planogram, said Hart.
"The goal is not to fit as much product in the area as possible, but to convert as many browsers to customers, and you do that by making it easy to shop,” Hart said. "That leads to more sales for all parties rather than a cluttered environment and confused customers.”
Well-planned environments will not have a consumer’s eyes moving up and down as they look across the space; instead they keep horizontal lines, like a consumer is reading a book, Hart said.
"That is easier to process and likely translates to more sales,” he said.
When considering planograms, Jaimie Turkington, marketing manager for Petcurean Pet Nutrition in Chilliwack, British Columbia, Canada, advises retailers to evaluate store traffic flow.
Aside from that, her best practice advice is to restock shelves often, refresh endcaps regularly and use points of sale to enhance the display.
The idea of a planogram is to "tell a story,” said Torrey Haywood, director of retail services for PetEdge Dealer Services in Beverly, Mass.
"Effective merchandising is paramount in the retail industry with many variations from endcaps, sections, planograms, fixtures, tables and counter space,” Haywood said. "The idea is to tell a story through merchandising and take the customer on a journey through the store, wowing them from the moment they see the outside window.”
Multiple planograms can be turned into a cohesive stocking, shelving and floor plan for an entire store, said Natural Balance’s Nilson, adding that "together they allow the retailer to incorporate each planogram from different manufacturers into a cohesive and unique plan for his or her store.
"Every store has a different footprint based on its size and square footage, requiring each planogram to be tailor-made and one of a kind for each location,” he said.
Thinking like a shopper is the key to fitting multiple planograms in an area, said PetSafe’s Hart, who was emphatic about keeping the consumer in mind at each step.
Instead of setting up a planogram by manufacturer, set it up by how the customer wants to shop the aisle, Hart said.
"This means first breaking into categories within the set and then thinking how to make it easy for the consumer to compare,” he said.
Hart said retailers should ask themselves whether customers shop based on price or benefits and position accordingly.
"If customers shop by brands, it is good to cluster the brands together, but the key is to think like a consumer,” he added.
Not everyone is entirely sold on manufacturer- or distributor-provided planograms.
Chris Miller, president of Pacific Store Designs Inc. in Garden Grove, Calif., said independent pet stores often look down on planograms, and some stores even return planograms to the manufacturer. That’s because, in his experience, quite often nearly one-third of the products don’t sell.
Miller admitted he’s a bit of a contrarian on the topic, and he said independents might prefer a DIY approach.
"They’re basically trying to buy real estate in your store,” he said.
Such planograms might be good for large chains with sophisticated point-of-sale software and a lot of floor space, "but not so much for independents,” he said.
If they do try a DIY approach, independent pet store owners should be picky about what they pair with other products, Miller said.
"The best way to do it is to pick the movers, the top sellers, and fill in with other top sellers,” Miller said. "Choose fast-turning items, those that are more popular.”
Once the display is constructed, take a picture, he said, adding, "That becomes their planogram.”
Miller advises keeping a picture book of the displays, and when a store sells through a product and when more comes in, store managers can look at the picture of a display for a particular product or types of products and the template is already there.
"Then you keep your store looking like its grand opening every day,” Miller said.
On the other hand, PetEdge Dealer Services’ Haywood said working with a manufacturer can be a positive sales driver for retailers.
"Even the best retailer needs some help with planogram/merchandising sometimes, and if they work with manufacturers who have that experience, it can allow the retailer to focus on other areas of the business, most importantly the customer,” Haywood said.
|In-Store Product Placement|
Does it really matter? You bet it does, say industry insiders.
"This is a crucial part of turning customer visits into sales and/or repeat visits,” said Jason Hart, director of marketing for PetSafe, a brand of Radio Systems Corp. in Knoxville, Tenn.
Retailers should see product placement as a chance to introduce customers to new categories and products, Hart said. And while this might not always generate sales right away, it could give customers a reason to return to the store.
"Retailers and manufacturers need to work together to make sure they have the right placement to maximize the sales opportunity for both,” Hart said.
Citing statistics from the Food Marketing Institute, Chris Miller, president of Pacific Store Designs Inc. in Garden Grove, Calif., said "there’s an 80 percent better chance to sell products that are at eye level than shin level.”
From Miller’s experience, when he remerchandises a store, a retailer sees an 85 percent increase in sales.
Changes he makes when he goes into a retailer include filling a store up well, using techniques such as color blocking and color breaks and, most important, putting a store’s highest foot traffic items in the back.
"Use product to drive foot traffic in your stores,” Miller said.
Endcaps are another area of the store to which much attention should be given, Miller said.
"If you have endcaps, make sure there are no more than two buying decisions on an endcap,” he said.
Miller, who warned against displaying an entire manufacturer’s line and using products in different colors, said more than 30 percent of a store’s sales can be generated from endcaps that are merchandised correctly.
Retailers should plan purchases and use endcap areas to show off new and price point merchandise, he said. Of course, products on endcaps should be related, which doubles the chances for an add-on sale, he noted.
Having an abundance of items, not SKUs, on an endcap also is advisable, as the perception of abundance equates to volume, Miller said.
"No one ever wants to buy the last one,” he said. "Just like at home, no one wants to take the last piece of pizza.”
However, a tip from Miller is to remove one product to show the buying has started.
"This will trigger sales sooner,” he said.
Endcaps should have signage, and products and signage on endcaps should be changed out regularly, Miller said, adding that those displays should be changed out at least six times a year.
This will keep regular customers interested in inventory. Otherwise, a regular customers comes in and sees the same displays, or the same signage, and "it becomes furniture,” he said.
Not only do planograms effectively draw consumers to the product, but they also make the customer experience much easier, said Wade Nilson, vice president of independent sales at Natural Balance Pet Foods Inc. in Pacoima, Calif.
"Product placement is also important because it can encourage impulse buys on other items in the product line like cans and treats,” he added.
Torrey Haywood, director of retail services for PetEdge Dealer Services in Beverly, Mass., offered some questions retailers should ask themselves: Does the section inspire the customer? Can the customer easily find what they need?
"Regardless of what you sell—food, toys, apparel, etc.—all product placement requires the retailer to be aware of how well the product turns,” Haywood said. "If one shelf is empty, it can destroy both the visual story and the shopping experience of the customer.”—DJ
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