Planogram compliance is an important concept in the consumer goods industry, ensuring that retail shelves are organised according to a predetermined plan. This strategy helps retailers and manufacturers optimise shelf space, improve product visibility, and ultimately drive sales. By adhering to planogram guidelines, both retailers and manufacturers can provide a consistent shopping experience, enhance brand presence, and make data-driven decisions to boost profitability.
What Does Planogram Compliance Mean?
Planogram compliance refers to the degree to which retail shelves align with a detailed schematic or planogram. A planogram is a visual representation that outlines the placement of products on store shelves, including the number of facings, shelf height, product arrangement, and promotional displays. The primary goal of planogram compliance is to ensure that products are displayed in a way that maximises sales and enhances the shopping experience.
The Importance of Planogram Compliance
Maintaining planogram compliance is essential for several reasons:
1. Optimised Shelf Space
Proper adherence to planograms ensures that every inch of shelf space is utilised effectively. This optimization prevents overcrowding and underutilization, leading to a balanced and attractive product display.
2. Improved Product Visibility:
Planograms are designed to highlight high-demand products and strategic items, making them more visible and accessible to consumers. Enhanced visibility drives sales and encourages impulse purchases.
3. Consistency Across Locations:
For retailers with multiple locations, planogram compliance ensures a consistent shopping experience. Customers can find products in the same place, regardless of which store they visit.
4. Enhanced Brand Presence:
Brands benefit from planogram compliance as their products are displayed prominently and consistently. This visibility strengthens brand recognition and loyalty.
5. Data-Driven Decisions:
Adhering to planograms allows retailers and manufacturers to track sales performance and shelf efficiency. This data-driven approach helps in making informed decisions about product placement, promotions, and inventory management.
How to Achieve Planogram Compliance
Achieving planogram compliance involves several steps, including careful planning, execution, and continuous monitoring. Here are key strategies to ensure compliance:
1. Detailed Planning:
Developing a comprehensive planogram that aligns with sales data, consumer behaviour, and market trends is the first step. This plan should be clear, detailed, and easy for store staff to follow.
2. Training Staff:
Ensuring that store employees understand the importance of planogram compliance and are trained to execute the plan effectively is crucial. Regular training sessions can help staff stay updated on best practices and new planogram guidelines.
3. Regular Audits:
Conducting frequent audits to check if the shelves align with the planogram is essential. These audits can be performed by internal teams or third-party agencies specialising in retail audits.
4. Using Technology:
Leveraging technology, such as image recognition and AI, can simplify the monitoring process. These tools can quickly analse shelf layouts, identify discrepancies, and provide actionable insights to improve compliance.
5. Feedback and Adjustment:
Gathering feedback from store staff and customers can provide valuable insights into the effectiveness of the planogram. Based on this feedback and sales data, adjustments can be made to optimise shelf space further.
The Evolving Landscape of Planogram Compliance
The approach to planogram planning, designing, and monitoring has evolved significantly. It started with 2D and 3D virtual designs and has advanced to data-driven shelf product placement optimization and AI-generated planograms. Modern planogram compliance solutions span a wide spectrum, from image processing tools ensuring shelf compliance to computer vision and deep learning-based scanning solutions. AI algorithms are now capable of addressing various complexities like product adjacencies, light intensities, multiple facings, and SKU variations.
According to The National Association of Retail Marketing, planograms, on average, go out of compliance at a rate of 10% per week. Additionally, RIS News reported that poor retail execution and a lack of planogram compliance can lead to sales losses ranging from $1 million to $30 million per retailer in the US market.
The Impact on Consumer Goods Manufacturers
For Consumer Products manufacturers, planogram compliance is critical to ensuring that their products receive the right visibility and placement in retail stores. Non-compliance can significantly impact a manufacturer’s bottom line, leading to lost sales and diminished brand presence.
Effective planogram compliance allows manufacturers to ensure that their products are consistently displayed according to strategic plans, driving brand recall and sales.
Aforza Studio & Planogram Compliance
Aforza Studio provides innovative solutions to help both retailers and manufacturers achieve and maintain planogram compliance. By partnering with leading image recognition and analytics vendors, Aforza offers tools that simplify the monitoring process.
These tools use AI to analyse shelf layouts, identify non-compliance issues, and provide real-time insights for corrective action. With Aforza Studio, retailers and manufacturers can ensure that their shelves are always organised according to plan, driving sales and enhancing the shopping experience.
Key Capabilities of a Planogram Compliance Technology Solution
A robust planogram compliance technology solution offers several advanced features to ensure that retail shelves are aligned with strategic plans, maximising product visibility and driving sales. Here are the key capabilities to look for:
Automated Image Recognition:
- Advanced AI and Machine Learning: Utilises AI and machine learning algorithms to accurately identify products, count facings, and measure shelf space from captured images.
- Real-time Analysis: Provides real-time feedback by quickly processing images and highlighting non-compliance issues, enabling immediate corrective actions.
Comprehensive Reporting & Analytics:
- Detailed Insights: Generates detailed reports and analytics on shelf performance, including compliance rates, product placements, and category performance.
- Historical Data Tracking: Tracks historical data to identify trends, measure improvements over time, and assess the impact of changes in planograms.
Integration with Retail & Manufacturer Systems:
- Seamless Data Sharing: Integrates with existing retail and manufacturer systems, such as inventory management, sales tracking, and ERP systems, to provide a holistic view of performance.
- Customizable Dashboards: Offers customizable dashboards that allow stakeholders to access relevant data and insights tailored to their specific needs.
User-Friendly Mobile Application:
- Easy to Use Interface: Provides a user-friendly mobile application for field agents to capture images and data effortlessly.
- Guided Photo Capture: Includes guided photo capture features to ensure that images are taken from the right angles and distances for accurate analysis.
Automated Alerts & Recommendations:
- Instant Notifications: Sends automated alerts to relevant stakeholders when non-compliance issues are detected, ensuring prompt resolution.
- Automated Actions Recommendations: Offers actionable recommendations based on data analysis, helping retailers and manufacturers optimise shelf layouts and improve compliance rates. One snapt to business impact!
Implementing a planogram compliance technology solution with these key capabilities can significantly enhance the efficiency and effectiveness of retail execution, ensuring that products are displayed optimally and consistently across all locations.
Planogram compliance is a vital aspect of retail and consumer goods management, ensuring that products are displayed optimally to maximise sales and improve customer satisfaction.
By adhering to detailed planograms and leveraging advanced technology, retailers and manufacturers can achieve consistent and effective shelf arrangements. Aforza Studio’s cutting-edge solutions and ecosystem partners make it easier to monitor and maintain compliance, ensuring long-term success in the competitive consumer goods industry.