Increase Your ROI on Planograms

Increase Your ROI on Planograms

Planograms are big business. In the U.S. grocery industry alone, the cost of planogram resets is ¾ of a billion dollars annually. Every quarter, planograms are being adjusted to accommodate new products or seasonal items. Think about the labor and costs involved to reset shelves across the globe.  But with all this work, do we really know when we have a great planogram that will create a better shopper experience and increase sales?

Explorer’s new proprietary planogram testing approach is a shopper centric, behavior-based approach to optimize your planogram.

Whether you are launching a new product, defending share of shelf, looking to build basket size, rationalize SKU’s or simplify the shopping experience, planogram research will help optimize the shelf and make the most of available space.

Regardless of channel, store format, banner or category, Explorer’s advanced research techniques can provide deeper insight into the shopper’s decision-making process and actual behavior at shelf.  Here are some of the important questions that Planogram Research can answer:

  • What is the best assortment of products to maximize category sales?
  • What is the best shelf position to grow my brand?
  • What brand adjacencies are best for my brand?
  • Will more facings boost sales? How many more?
  • Is horizontal or vertical blocking the best strategy?
  • Should the shelf be organized by segment, brand or consumer needs?
  • How can I make it easier to shop the section?

Planogram Principles for SuccessSo Why Invest in Planogram Research?

The shelf is “the moment of truth.”  It’s the last opportunity to influence shopper decisions.

Will they buy your brand, or will you lose the sale to a competitor?  Or, will shoppers get frustrated and move on, losing the sale all together?

Clearly, purchase decisions are driven by many factors including price, promotions or new competitors but, having the “right” planogram can increase your likelihood of making the sale.

A few questions can help you decide if planogram research is worth the investment or, if not doing it is worth the risk of lost sales.

First, how confident are you that the shelf is optimized to deliver best results?  Changes to assortment, shelf location, adjacencies, number of facings or blocking strategies can make the difference in sales.  Knowing which of these elements to change, and how, is rooted in understanding shopper behavior.  Relying solely on industry learning or your own experience can result in missed opportunities.

Secondly, is the shelf organized to create a positive shopper experience?   Ensuring the section is easy to navigate so shoppers can quickly find their brand of choice leads to higher levels of shopper satisfaction.  Ask yourself, at what point might shoppers become frustrated and give up or switch brands as they discover another option as they search?

Thirdly, are you planning changes to your business?  Planograms are changed during the business cycle across multiple channels and banners often creating the need for hundreds of new planograms. Clearly, testing every situation is unrealistic and unnecessary.  However, for big changes or to reverse lagging category performance, POG testing is a valuable tool.

Explorer Approach to Planogram Testing

To measure how changes in a POG will change shopper behavior, testing needs to be conducted in front of a LIFE-SIZE SHELF. The Explorer approach has 3 ways to test life-size shelf set ups.

Ways to test Planograms

Our proprietary approach is based on an extensive database of norms and we assess planograms based on sales, assortment, layout and shopping experience. Our approach allows you to simply compare against different planogram options. You now have a validated research approach to assess whether a planogram is going to work and how it compares to other options being considered. When combined with eye tracking, we can gain a deeper understand of how decisions are actually made at shelf.

Contact me to find out more about how our planogram testing approach works and how you can grow your business. [email protected].

Anne Stephenson
Partner, Explorer Research