Planogram

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Planograms, also known as plano-grams, plan-o-grams, schematics, POGs or simply plans, are visual representations of a store's products or services on display. They are considered a tool for visual merchandising. According to the Merriam-Webster Dictionary, a planogram is "a schematic drawing or plan for displaying merchandise in a store so as to maximize sales."^[1] The effectiveness of the planogram can be measured by the sales volume generated from the specific area being diagrammed.

Planograms are predominantly used in retail businesses. A planogram defines the location and quantity of products to be placed on display, often with detailed specifications on the number of product facings and spacing; shelf layout, height, width, slant and depth and necessary or recommended chiller conditions (e.g. fresh meat versus white wine). Any other information deemed necessary or useful can be included. The rules and theories for creating planograms are set under the terms of merchandising. For example, given limited shelf space, a vendor may prefer to provide a wide assortment of products, or may limit the assortment but increase the facings of each product to avoid stock-outs.^[2]

Visual product placement is supported by different theories including; horizontal, vertical, and block placement. Horizontal product placement increases the concentration of a certain article. Research studies suggest that a product's relation to customer eye levels directly correlates to its sales.^[3] This depends on the customer's distance from the unit. Vertical product placement puts products on more than one shelf level to achieve 15 centimetres (5.9 in) – 30 centimetres (12 in) of placement space. Similar products are placed in blocks. A planogram can be compared to a book. A store is the book and its individual modules represent the pages. The customer gradually “reads” individual modules and automatically proceeds from the left to the right, from the top to the bottom as if he/she read a book. This principle is followed by a majority of rules for goods displaying. The rules say that goods should be arranged on a shelf from the least to the most expensive ones. Goods may also be arranged in the reverse order, depending on the kind of goods that the dealer wishes to promote. This makes the difference between dealers of cheap and luxury goods.^[4]

Commercial placement is determined by both market share placement and margin placement.^[5]

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