Click here to download a PDF spread of a planogram best practices.
As the old saying goes, you never get a second chance to make a good first impression.
In the retail world, that first impression – like a handshake or a smile – is your planogram, the map of your store’s display space arranged for maximum sales. According to John Mathieu, director of retail growth at distributor Emery-Waterhouse in Portland, Maine, some people don’t think you have to pay attention to merchandising in a lumberyard. “They think it should have a gritty, warehouse look,” he says. “I disagree. The goal of merchandising is to make the product easy to find.”
Sales figures are a good indication of the success of your planogram. If you’re hitting the dollar amount set up by the planogram per linear square foot of shelf space in your various categories, great. You should still tweak, however. There’s always room for improvement.
Planograms are usually developed for LBM operations by their distributor’s retail experts, with the help of regional demographic info, as well as information the dealer supplies on the local market and the target demographic. Vendors also develop planograms for their own products.
A good planogram can not only make it easier for customers to find what they need in power tools, paint, and plumbing parts but can make restocking and inventory control easier as well. By knowing how much shelf space is allotted to each product, a retailer can figure out how much inventory to keep on hand to restock and how much to reorder when stock is low.
If your shelves could use some refreshing, here’s a recap of what retail experts from the lumber aisles say works.
• Take your cue from a book. We read from left to right, and that’s the way your customers will look at your shelves. If those screwdrivers, pliers, and chisels are run in vertical stacks and placed side by side, customers can immediately see that you have plenty of those items and are likely to have what they need. A long horizontal run of product can fatigue the eye and create boredom, says Mike Connolly, hardware purchasing manager for Lumbermens Merchandising Corporation of Wayne, Pa.
• Respect your end caps. They signal your store’s price image and competitiveness so pay attention to them. Regularly changing your end caps tells your customers that your inventory is fresh and product is always moving. Most LBM merchandising experts believe end caps should be switched out monthly. The only place for permanent end caps should be at the back of aisles.
• Look up for more space. When storage is limited, increase the height of your gondolas (the industry term for free-standing shelving units). Many distributors are now recommending 7-foot shelf units, especially for smaller dealers, where space is at a premium.
• Don’t compromise your sight lines. Stacking products above the gondolas is a no-no. Customers can’t reach up there anyway, and using the tops of gondolas as catch-alls can block signage.
• Signage matters. Contractors are busy guys. Don’t make them waste time wandering your store looking for products. Use clear signage, prominently displayed, to guide your customers where they need to go.
• Let your light shine. Good lighting is critical. It doesn’t matter how much product you have or even how well it’s displayed if customers are squinting in low-watt gloom to find what they need.
• Color your world. DeWalt, realizing how well a black background offsets its signature black and yellow hand tools, offers its dealer customers a black backer for the gondolas, says LMC’s Connolly. Take a lesson from DeWalt’s playbook and do the same to make your displays pop. Pegboards and even gondolas can be painted.
• Sell the project, not the product. If you sell paint, make sure you stock adjacent shelves with all the products that complete a painting project, such as applicators, paint trays, and buckets, as well as products for prepping the walls and cleaning up after the job is done. If you sell the project, you will see a lift in the entire category, says Lauren Wagner, Do it Best Corp.‘s supervisor of category management. In all categories, adjacencies should make sense and add to an intuitive sense of flow through the store.
A good planogram is essential for obtaining the best sales from a product mix, but dealers bear a responsibility for maintaining the effectiveness of their store’s planogram. Dealers have to service the planogram, and that means keeping a vigilant eye on the product mix and the general appearance of the store. In other words: Do your housekeeping! Here are some things to bear in mind.
• If a product hasn’t turned in a year’s time, it’s not going to, says Barry Flint, regional sales director for Shreveport, La., distributor HDW. Ditch it.
• To get a fresh perspective on a store, Lumbermens Merchandising Corporation’s Mike Connolly tells dealers to step outside, then walk back in, stand at the front of the store, and tell him what they see. It’s a simple exercise, but an effective one, because that perspective is what their customers see. If they see a jumble of displays, they will be confused.
• Do you sell paint? Try using some. That’s a question Connolly often asks dealers. “If it looks like garbage, it doesn’t inspire a lot of confidence,” he says.
• Sell product, not pegboard, says Phillip Walker, Orgill’s vice president of marketing. “Maintenance within the store is critically important.” Connolly agrees and suggests dealers front the store each morning, pulling merchandise forward onto the hooks, restocking where necessary, and tidying shelves.
• Maintain aisle clearances and keep the store clean to give the store a fresh and modern look.
Here’s a short list of things to bear in mind as you evaluate your product assortment and planogram.
• Keep an eye on your competition. If it changes, then assess your assortment of products. It may be time to tweak a few items.
• Use the industry’s trade shows to find out what’s new in the marketplace in hardlines that might beef up a category in need. Be sure to replace a product that has been underperforming or has been discontinued.
• If you have a retail yard, use your everyday best seller(s) to drive traffic through the store with facings (rows) of product, priced competitively. Locate facings at the back of the store to lead customers through the aisles. (This tactic is not as successful in a pro yard, where contractors want to “get in, get it, and get out,” says Steve Frawley, president and CEO of Portland, Maine, distributor Emery-Waterhouse.)
• If you want to be dominant in a particular category, then buy it aggressively, advises Frawley. “It might even be over-assorted” to reflect the store’s stance.
• Eighty percent of all sales are derived from products located between 40 and 60 inches off the floor, according to studies by retail merchandising guru Paco Underhill. This is where you want to locate your best sellers.
• Underhill’s fieldwork also showed that when customers walk into a store, they typically turn right. That could have implications for end caps or where a dealer might locate his dominant category.