Retail Planogram Lecture Notes

Introduction

• Goal: Understand retail planogram and its influence on product sales and sales velocity.

Learning Objectives

1. Define retail planogram.
2. Identify goals of retailers and buyers.
3. Explain basic merchandising techniques.
4. Study success case studies (e.g., Justin's Peanut Butter, Archer Farms).
5. Apply principles to personal sales strategies.
6. Q&A session with brainstorming.

What is a Planogram?

• Definition: A visual map of a store indicating where products should be placed.
• Analogous to architectural design for product placement.
• Key metrics include space, aisle planning, shelf placement (height, depth).
• Types of placements:
  • Aisles
  • Shelves
  • End caps
  • Checkout counters

The Goals of a Planogram

• Incrementality: Encouraging customers to buy more products during a shopping trip.
• Aim to enhance customer experience and recall related products (e.g., ketchup with hot dogs).
• Research shows 2/3 of supermarket purchases are unplanned.

Retail Buyers' Perspective

• Risk involved in introducing new products.
• Need to maximize total sales and individual category sales without jeopardizing existing sales velocity.

Basic Merchandising Techniques

1. Visibility Zones:

   • Bullseye zones: Second and third shelves, ideal for best-selling products.
   • Top shelf: Smaller, niche brands.
   • Bottom shelf: Heavier products, often private labels.
   • Children’s eye level: Brightly colored products targeted at kids.

2. Horizontal Planning:

   • People read left to right; placement on the left side of aisles usually has higher sales velocity.
   • End caps and checkout areas are prime spots for high sales volume.

3. Slotting Fees:

   • Fees charged by grocery stores to place products on shelves, ranging from $800 to $2,500.
   • Free fills may encourage initial placements.

4. Color Contrast:

   • Use of contrasting colors to grab attention and enhance visibility.
   • Merchandising techniques include color blocking.

5. Thematic Clumping:

   • Grouping products by theme (seasonal, promotions) at end caps to increase impulse buys.

6. Framing Techniques:

   • Using shapes or borders to draw attention to products.

7. Serving Size Diversity:

   • Creating multiple serving sizes to cater to different customer needs increases market share.

8. Point of Purchase Displays:

   • Secondary displays outside main shelves to attract impulse buyers.

9. Marketing Support:

   • Plans for social media, promotional dollars, and marketing can influence a buyer's decision.

Case Studies

1. Justin's Peanut Butter

• Innovated by introducing individual serving sizes allowing for visibility at checkout and increasing sales velocity.
• Expanded placement beyond traditional peanut butter aisles.

2. Archer Farms (Target Brand)

• Diverse packaging strategies targeting different customer needs (bulk, grab-and-go, themed displays).
• Multiple placements in the store to ensure high sales visibility.

Conclusion

• Understanding planograms is crucial for optimizing product placement and sales.
• Sales strategies should align with merchandising techniques to communicate product value to buyers.
• Importance of innovation in packaging and strategic placement to maximize visibility and sales.

Final Thoughts

• Walk the aisles to observe strategies used by competitors.
• Create a compelling sales presentation incorporating planogram insights and merchandising techniques.
• Utilize resources like Pearl Resourcing for help with packaging design and product development.