Do you have a new category project and don’t know where to begin with the merchandising of the products? You might have a background in one category but now need to work on a new one and are unfamiliar with the specific merchandising or space planning principles that apply to it. If this applies to you, don’t worry, we have you covered.
We’ll take you through a few critical space planning principles to consider before you build a planogram. For this piece, we’re focusing specifically on food and general merchandise retailers as well as category specialists such as Motor or Electrical.
Also, while there are many different principles to consider, for brevity, we've selected two per retail environment. It's worth noting that these are across multiple different food, general merchandise and specialist retail environments.
About the contributors
Jade Charters joined DotActiv in 2019 as a space planner, creating data-driven planograms for Makro, a wholesaler chain and subsidiary of Massmart. She currently works on the Makro General Merchandise account. She has a BConsumer Science degree in Clothing Retail Management from the University of Pretoria.
Leané Mulder joined DotActiv in 2019 as a space planner, working on various ad-hoc accounts. Since then, she has been promoted to account manager. Today, she oversees work on our Motus account. She has a BSc in Consumer Science from North-West University.
Michael Puckering joined DotActiv in 2017 as a space planner. Since then, he has worked on various accounts, gaining extensive experience across different retail environments. Currently, he is working on the ACDC account.
Preeshen Padayachee joined DotActiv in 2019 as a space planner, working on the Food Lover’s Market account from Johannesburg. He has a BCom in Business Management from the University of South Africa.
Sonja Roos joined DotActiv in 2019 as a space planner, working on Makro's General Merchandising account. She has a Bachelor of Arts in Fashion Media and BPhil Honours in Marketing Management.
Tanya van der Merwe joined DotActiv at the beginning of 2018. She currently oversees the Makro General Merchandise account. Makro is a wholesaler chain and subsidiary of Massmart that has international ties to Walmart.
Key space planning principles for food retailers
1. Products should have a minimum of two facings
How you portray your products to your customers on the shelf is a critical aspect to consider when building a planogram.
It is important that all products on the shelf, regardless of their performance or Days of Supply (DOS), should have at least two facings. A product facing allows you to create the look of a perfectly stocked store by placing products on a display or shelf to the edge.
This principle is also vital when merchandising a new product. Because your customers are not yet familiar with the new product or the design thereof, when placing two or more products with the same packaging next to one another on the shelf, the product becomes more eye-catching and grabs their attention.
This creates an opportunity for them to explore this product and could in return, create higher sales on this new SKU for you.
By adding a minimum of two facings to a new product, sufficient exposure is given to the product so that the facings can be adjusted and aligned to the sales data once it is available.
2. High performing products should be merchandised at eye level
If not properly merchandised, you could lose a lot of potential sales from your top-performing products.
That’s why this next principle - placing high performing products at eye level - is so critical. It helps your customers to find products easily. This, in return, creates a pleasant shopping experience, which could lead to your customers spending more time in the store, browsing and buying more products than initially planned.
Some may disagree and state that placing a popular product just above or just below eye level would help your sales because the customer would then have to search for the product, resulting in possible increased basket size.
However, the opposite is also possible. If a shopper, in a hurry to buy their groceries, is forced to search for a product, it could result in an unpleasant shopping experience, which could lead to a frustrated shopper not wanting to support your stores in the future.
The saying goes “Eye Level is Buy Level”. Eye level is the most prime positioning on the shelf because it generates the most sales when compared with being at the top or bottom of the shelf. This makes eye level the ideal position to merchandise top-performing products. It ensures a pleasant shopping experience for your customers and increased sales for you.
Key space planning principles for general merchandise retailers
1. Merchandise house brands at the start of the aisle
In the past, house brands were often associated with low-quality products due to their low prices and branding. More recently, however, fewer consumers are associating House Brands with low quality. In reality, more are opting to buy these products rather than the products from private labels.
Therefore, you should merchandise your house brands at the start of the aisle.
When placing house brands at the start of the aisle, you can expose your customers to these products first. This provides the opportunity for the house brand to be evaluated, whether it be on product offering or price before the shopper moves on to the next brand.
Because you design house brands closely to that of the market leaders, your customers are more likely to compare these two products and might even choose the house brand due to its competitive pricing or product offering.
For example, at an FMCG retailer, the Gardena range and the Garden Pro range might compare very similarly in terms of visual appearance. However, the product offering compared to the price of the Garden Pro is better.
This could mean that if the Garden Pro range is merchandised at the start of the aisle, the shopper will opt for these products, increasing the profitability of your house brand.
2. Apply brand blocking to the category
The shelf is often the first point of interaction that your customers have with a brand. Therefore, brand blocking is a vital space planning principle to apply. This is especially true for you if you're a general merchandise retailer
Let's first look at what brand blocking is.
Brand blocking is a merchandising technique where you'd place or block products from the same brand together. You can do that either vertically or horizontally.
Because brand blocking creates a strong brand presence within a category, it can assist with increasing brand loyalty. If a shopper is familiar with a brand, they will enter the store, walk to the relevant category, go directly to where that brand is placed, and take the item and/or brand they are looking for. That's without comparing this product with others.
It is because the shopper could easily identify the placement of the brand and product on the shelf. They had also already built brand loyalty towards this product due to brand blocking.
Brand blocking is also a very effective merchandising method to apply at your point of sale. When blocking a brand at a point of sale area, it can assist the brand in standing out in a busy retail environment. If done correctly, it could also motivate impulse buying.
Colour blocking is another strong merchandising technique that you can use in-store. It allows you to use colour to support the merchandising of products.
Key space planning principles for specialised retailers
1. Merchandise smaller products above your larger products
Apart from the actual product size, the weight of a product could influence whether or not your customers can lift a product off of the shelf. That is why it's a good idea to merchandise smaller products on the shelves above your larger products.
By placing smaller objects, such as tool accessories, above larger objects such as power tools, it is easier for customers to browse the products, remove the products from the shelf to compare and inspect and ultimately take the products off of the shelf.
A practical example here is paint cans in a hardware store. If you were to merchandise the 25l buckets at the top of your drop (shelf) and the small tester bottles at the bottom of the drop, your customers would have no problem removing the tester bottles from the bottom shelf. However, they would struggle to easily remove the 25l bucket from the top shelf.
They would either have to get a store employee to assist or might attempt to reach the bucket themselves and spill it. They could also injure themselves.
2. Planogamming baskets
It often happens, especially with categories related to globes or electricals, that products are merchandised in baskets on the drop. How can you go about ensuring products merchandised in these baskets grab the attention of the shopper while still being practical and visually appealing?
An important aspect to consider here is the dimensions of your basket. The height of the front of the basket is not necessarily the same as the back of the basket. If these dimensions are not verified beforehand, it could cause space issues with hanging products interfering with the space of the basket.
Another important aspect to consider is the placement of your baskets.
You should not place your baskets at eye level. Instead, you should place them at the bottom of your drop. Why? Because it can help your customers when they shop in this category. Instead of looking through the basket, they can look down and into the basket.
Applying the above space planning principles will ensure a pleasant shopping experience for any shopper who enters your store because they will have a clear view of the products on offer.
The success of a category is directly linked to the effectiveness of the merchandising you implement in the store. To ensure a successful category performance is as easy as following and implementing these space planning principles.
Looking for a software solution or category management services that can help you achieve this? You can book a complimentary custom exploratory consultation with us here or visit our online store.