What Is Planogram (POG) Merchandising?

Definition & Examples of Planogram (POG) Merchandising

A woman arranges products in a store.

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Planogram (POG) merchandising is a strategy of using a visual plan, called a planogram, to designate the placement of products on the shelves of a retail store in order to increase sales.

Find out more about planograms and how they're used in retail merchandising.

What Is Planogram (POG) Merchandising?

Planogram (POG) merchandising uses a special schematic called a planogram to determine where to place products to drive sales.

A planogram is a uniform and detailed sales layout for a store. Planograms ensure that thought and planning go into the design and implementation of merchandising plans, including shelf space allocation. A store's visual merchandising efforts are key to attractively presenting its offerings in a way that makes customers want to buy.

In the largest U.S. retail chains, planograms are used in merchandising to create consistency between store locations, improve visual appeal, and promote product pairing suggestions. Smaller stores use planograms to maximize their selling space.

The ultimate goal of a planogram is to guide and focus in-store merchandising efforts to drive increased sales.

How Planogram Merchandising Works

A planogram is usually created by a visual merchandising employee or a member of the advertising, marketing, or sales team. The planogram takes into account buying data, sales trends, and consumer behavior. It can take the form of a diagram or drawing on paper, or, increasingly, it's likely to be a digital rendering displayed on a tablet or smartphone.

A retail sales merchandiser consults the planogram in-store, using it to ensure a manufacturer's products are displayed appropriately and attractively. The details provided in the planogram show them exactly where to place each stock-keeping unit (SKU) and how many facings should be displayed for each.

Regular resets keep the displays fresh and interesting. A reset is like a planogram makeover: it's used to introduce new products or to change the store with the seasons. During a reset, the store uses a new planogram to shift products, introduce new products, and update labels and signage.

Other planogram revisions can occur regularly, too. These keep the stock rotated and eliminate old or discontinued products.

Benefits of Planogram Merchandising

The intention of a planogram is to ensure that each retail store is optimized for sales. Planograms provide specific guidelines for employees to keep on top of restocking and merchandising organization tasks. Both employees and customers need to know exactly where items are located so that they can be found and purchased.

Planograms are particularly important with the largest retail chains, which have hundreds and sometimes thousands of brick-and-mortar store locations. By using a planogram, each store in the chain can have a similar layout but with customized merchandising strategies that reflect regional preferences. 

Planograms can help to improve a store’s sales with a visual merchandising plan that displays products in a way that inspires a customer to purchase. If a customer comes in to purchase one item, a well-merchandised store that follows a well-strategized planogram can motivate shoppers to buy other products, too.

Similarly, customers who come in to buy a specific product and who find alternatives merchandised in strategic ways could end up buying something other than what they intended: an upsell that benefits both customer and retailer.

Following a planogram very closely, which is called planogram compliance, can help boost profits; it also helps a store to better manage its stock and lets employees know exactly where to find a particular product. On the other hand, planogram non-compliance, in which the actual products on the shelf do not exactly match the planogram, can result in products being out of stock and lost sales. What's more, if merchandising isn't 100% compliant with the planogram, the retailer misses out on being able to accurately assess the effectiveness of it. Such lost data can affect subsequent decision-making about different products and their contribution to the bottom line.

Key Takeaways

  • Planogram (POG) merchandising is a technique that uses a detailed visual plan, called a planogram, to arrange products on store shelves in a manner that encourages sales.
  • Planograms provide a schematic of a store's shelves, fixtures, and aisles, showing in detail where each product should be placed.
  • Planograms take data into account to maximize visual appeal and drive sales.