The Planogram is of itself a simple thing. It is no more than a map that shows a shopkeeper what goods to place where on the shelves. A useful tool, and no more, perhaps, than the application of common-sense, with a smattering of statistical analysis and a little forward planning.

The theory

The big chain-stores will employ specialists to factor many considerations into the compilation of these maps. They will look at spending patterns of the existing customers, see what they buy and try and work out what else they may be persuaded to buy. They may consider the future plans of larger manufacturers, for new product and for advertising spend.

The objective is to maximise profit per centimetre of shelf space. The result is, usually, that brand leaders within a product category will be given the most prominent position. Next in importance will be the most profitable items, which may be an 'own-brand', followed by the second, third and, perhaps, fourth best sellers. Finally, at the bottom and at the edges of the display will be a few products that are sometimes described as 'Managers discretion', i.e. popular locally, good for company image with nice packaging, adding character to the shop etc. etc.

It can be easily understood that the function of a shop is to make a profit. It requires no great leap of understanding to further realise that a shop owner is concerned to maximise the profitability of every centimetre of every shelf within the shop. The owner will take every care, therefore, to ensure that his shelves are stocked with goods that either

• sell quickly, even if the profit per item is low, or
• sell more slowly, but with greater profit per item

There are other considerations for the shop owner to take into account. He/she needs to attract customers by displaying his goods attractively, and by giving prominence to brands that the customer knows and loves (through advertising or habit) and will also want to be certain that he retains customers by having their favourite brands always in stock and easily visible. The more sophisticated proprietor will also want to use his display to project his company's image whether by simply keeping things clean and tidy or by focussing his customers attention on, for example, 'caring, sharing' type products, to make them feel they are good people for buying in his/her shop. That pretty bottle of virgin olive oil from Tuscany is not there for you to buy. It is there for you to look at and wonder, to enhance the supermarket's image of itself to itself and to you, as you sensibly purchase the de-flowered supermarket brand at a fraction of the price.All of these thoughts, and many more beside, will be considered in compiling his planograms.

Working against his interest, the shop owner has

• Shop Assistants, who may be stupid or (worse) inclined to use their initiative and creativity
• Customers, who may insist on wanting to buy stuff that is not so profitable or so heavily advertised
• Suppliers, whose representatives are charged with maximising the exposure of their company's products

If the shop owner is of any size, if he has several sites to oversee and manage, he must keep tight control of which products go where, and in what quantity. This is done by shop layout designers and planners, and, for the individual shelves, by the use of planograms

Shop Layout

This is not our main concern here, but the principles are simple and based on common-sense. The layout of a shop is designed in such a way as to maximise the possibility of impulse, or unplanned, purchases. The most commonly purchased items will be placed far apart, to impel the customer past as many other items, more profitably priced than the core products, as possible. There will be certain 'hot spots' that every customer will see as they walk through. The most commonly purchased item in a newsagent, for example, might be newspapers. If these are placed at the back of the store, then many customers will pass through the whole shop, and the chances of their eyes alighting on other goods increased. A hot spot will be contrived, where the display will usually feature heavily advertised 'new' products. The designer will come up with a plan that allocates parts of the shop to different goods, in proportion to their profitability to the owner. Once those decisions are made, it is time for the merchandisers to step in, with their planograms.

So What?

If you have read the above with any degree of sympathy for the shop owner, you may be forgiven for thinking "So, what?". No evil has been described. It all seems eminently sensible, and is a fascinating 'science' in itself, touching as it does upon human behaviour, statistics and presentation. Think on. Nowhere in the shop owner's thinking is the phrase 'what the customer wants'. The owner is concerned with what the customer can be made to want, what the customer can be persuaded to want, and what the customer thinks they want, having been previously persuaded by others. It is also, surely, obvious, that if all the shop owners employ all the best people they can find, if they all have access to analyses of customers spending patterns and habits, then, by a process of evolution, they will all end up selling the same limited range of products. Efficient retailers will thrive, as will their systems, suppliers and approach, and small retailers, new-comers and niche shops will find it increasingly difficult. What is more, the manufacturers of that limited range of products will grow in influence as they are able to more effectively advertise and otherwise persuade. The big get bigger and better, the small struggle. If the small man, Mr Bloggs, comes up with a better washing powder, will he ever be able to get you, the customer, to try it? Not a chance. He can only dream of the skills, the contacts, the networks, that might get his products to the supermarket buyers. It takes a remarkable product or an exceptionally driven proprietor to buck these odds. If Lever Bros or Procter and Gamble¹, for example, develop a washing powder that makes them a little more money than its predecessor, they can very easily co-opt space on the sensible shop owners planograms, by appealing to his self-interests.