Originally created for manufacturing companies, planograms have now been adapted for use in many other industries, including retail and hospitality, and when used right, they make a great impact. According to Shopper Technology Institute’s report, planogram compliance increases profits in retail by 8.1%, and that’s only one small impact of planograms.
Technology plays a significant role in planogram compliance, as it allows businesses to accurately track and manage the placement of products in their stores. Using visual intelligence tools, businesses can create detailed planograms that accurately reflect their desired product placement and categorization. These tools can also help businesses to easily track and update their planograms, ensuring that they remain compliant with company guidelines and standards. Additionally, technology can be used to efficiently add new SKUs to planograms, ensuring that they are correctly placed and accounted for in the overall product layout. Overall, the use of artificial intelligence and image recognition in planogram management can help businesses to maximize their return on investment by optimizing product placement and streamlining the process of managing and increasing planogram compliance.
What Is a Planogram (POG) in Merchandising?
A planogram is simply an image of a retail space that shows what products are placed where, how they're positioned, and where they should be displayed. It helps store managers visualize their stores so they can make decisions about product placement and design.
The purpose of a POG is to outline the layout of products within a retail space, as well as illustrate how they relate to each other. In this way, it helps shoppers navigate the store and find items they want quickly and easily.
Planograms also help sales associates better understand how different merchandise categories are displayed, as well as how they are arranged within each category. This knowledge can be used by sales staff members during their daily interactions with customers, making it easier for them to answer questions and solve problems that arise while shopping.
Planogram Use in Visual Merchandising: Why You Need It
Helping decision makers create a cohesive and visually appealing store environment that will attract customers and make them navigate easier in stores, planograms can also be used to identify opportunities for improving the layout and display of the store and to make informed decisions about how to allocate space and resources.
Here are a few examples of how planograms can be used in visual merchandising and the many benefits of planogram compliance:
Displaying products by category
Planograms can be used to organize products by category, making it easier for customers to find what they are looking for. For example, a store might use a planogram to group all of its household goods together such as hygiene items, personal care products, and so on. This can help customers quickly locate the products they are interested in and make a purchase.
Highlighting new products
Planograms can be used to highlight new or popular products, helping to draw customers' attention to these items and encourage them to make a purchase. This can be done by placing these products in prominent locations within the store or by using visual elements like lighting or signage to draw customers' attention to them.
Creating eye-catching displays
Planograms can be used to create visually appealing displays that appeal to the customers and encourage them to browse. This can be done by using creative layouts and incorporating elements like props, lighting, and signage to create a cohesive and engaging display.
Maximizing the use of space
Planograms can be used to optimize the use of space within a store, helping retailers to make the most of their available area. This can be done by carefully planning the placement of products and using every available inch of space to its full potential.
Facilitating upselling and cross-merchandising
Planograms can be used to facilitate upselling and cross-merchandising by placing related products in close proximity to one another. For example, a store might use a planogram to place a display of coffee next to a display of sugar, encouraging customers to purchase both items at once, or a store could use a planogram to place a display of crackers near a display of cheese, suggesting that the two items could be paired together for a snack. By using planograms to carefully arrange products in a way that encourages customers to purchase multiple related items at once, businesses can increase their sales and revenue.
Fetching impulse shoppers
Planograms are used by retailers to increase impulse shopping by strategically arranging products in a store. By placing items in high-traffic areas or near the checkout counter, retailers are able to grab the attention of shoppers and encourage them to make unplanned purchases. Home Depot shares that impulse shopping accounts for more than 60% of purchases, so it’s essential to set cute traps. By carefully designing their planograms, retailers can increase the likelihood that shoppers will make impulsive purchases, which can drive sales and increase revenue.
By taking the visual intelligence approach in planogram compliance, retailers and CPGs can quickly and accurately assess the compliance of their planograms without the need for in-person inspections. These tools allow businesses to remotely view and analyze the arrangement of products in their stores, enabling them to identify any issues or discrepancies in real time. This not only saves time and resources but also ensures that planograms are kept up-to-date and compliant with company standards.
The Best Way to Increase Planogram Compliance
There are two main options for increasing planogram compliance: manual compliance and using technology.
Manual planogram compliance involves having employees or auditors physically visit stores to ensure that products are arranged according to the planogram. While this method can be effective, it can also be time-consuming and resource-intensive, as it requires multiple visits to each store. Additionally, manual inspections are prone to errors and subjectivity, as they rely on the visual judgment of the inspector.
Using technology, on the other hand, can greatly improve the accuracy and efficiency of planogram compliance. With visual intelligence tools, retailers and CPGs can remotely view and analyze the arrangement of products in their stores, identifying any issues or discrepancies in real time. This not only saves time and resources but also ensures that planograms are kept up-to-date and compliant with company standards. Additionally, technology can be used to efficiently track and update planograms, ensuring that they remain accurate and effective over time.
Vispera checks whether the planograms created by our customers are correctly implemented in the field and how compliant they are, with close-to-human eye accuracy of 96% and the help of AI.
Using Image Recognition to Comply Planograms
Image recognition-based retail solutions have transformed the way retailers ensure planogram compliance. Using IR technologies, retailers can more accurately and efficiently monitor the placement of products on shelves in their stores. Rather than relying on manual processes that can be time-consuming and prone to errors, retailers can use digital technologies to track shelf placement and gain visibility into every shelf in every store.
AI-powered image recognition allows retailers to view real-time photos of store shelves, enabling them to better understand planogram compliance and improve their merchandising strategies. This provides retailers with high-quality data that they can use to make informed decisions about product placement and other aspects of their retail operations. Our approach to planogram compliance leverages all the benefits of image recognition technology to create a seamless and effective planogram operation for retailers and CPGs.
POG 2.0: Meet Automated Planogram Compliance
With Vispera, it is possible to manage your planogram compliance processes in a way that uses technology to the bits. Thanks to Vispera’s advanced retail visual intelligence technology, you can take advantage of continuous store data, analysis, and the best ideas for your visual merchandising strategy. Here’s what you get with Vispera’s planogram compliance features:
1. Prevent costly out-of-stock situations
Vispera solutions automatically alerts employees when products are out of stock or if an order has not been fulfilled within the specified time frame. This way, the store can be alerted in real-time, and it becomes possible to restock the product before the customer walks out of the door—of course, if you’re fast enough :)
2. Improve shelf space utilization
Vispera can analyze store shelf space and alert retailers about potential compliance issues, such as incorrect product placements, in order to optimize product placement and maximize sales. By identifying and addressing compliance issues, retailers can make the most of their available shelf space, increase revenue, and ensure that they are operating in accordance with relevant regulations.
3. Create the “Perfect Store”
Planogram compliance is one of the KPIs that enables the concept of the perfect store. Using visual intelligence and data analytics solutions to ensure planogram compliance is maximized. With these solutions, retailers can achieve perfect stores and always be available and visible.
Planogram compliance is only one small feature of Vispera’s countless retail execution solutions. Discover more on our website, or contact us to learn more about how we can improve the quality of your store operations altogether.