What Is a Planogram?
A planogram is a visual diagram specifying how products should be displayed in a retail space. Learn how planograms drive sales performance.
Key Takeaways
- A planogram specifies exactly which product goes where on each shelf or fixture
- Planograms maximise sales by placing the right products at eye level and in logical flow
- Space should be allocated based on a product's sales performance, not just its unit size
- Planogram compliance — stores executing the plan as designed — is a major implementation challenge
What a planogram is
A planogram (also called a plan-o-gram, POG, or shelf layout diagram) is a visual schematic that specifies exactly which product is positioned where on each shelf, fixture, or display unit in a retail environment. It shows the number of facings (units visible from the front), the shelf position (eye level, waist level, or floor level), and the sequence of products from left to right. Planograms ensure that a consistent, commercially optimised product presentation is implemented across all locations that share the same store format.
Why planograms matter
The position of a product within a retail environment significantly affects its sales performance. Products at eye level (typically the shelf that is easiest to see and reach — roughly 120-160cm from the floor) outsell products at floor level by a factor of 2-3x in most categories. Products at the start of a customer journey (the right side of the aisle in a right-hand-traffic store) receive more attention than products at the end. Products placed next to strong adjacencies (complements that shoppers buy together) sell more than products placed next to unrelated items. Planograms encode this spatial intelligence.
Space allocation principles
The core principle of space planning is that shelf space should be allocated in proportion to a product's sales or profit contribution — not just its physical size. A product that generates 10% of category sales should receive approximately 10% of category shelf space (10% share of shelf or SOS). More sophisticated approaches allocate space based on gross margin contribution rather than sales alone — a higher-margin product deserves more space even if its unit volume is lower than a lower-margin competitor.
Creating a planogram
Planograms are created using specialist software — JDA Space Planning, Blue Yonder, or dedicated tools from major POS system providers — or in some cases using Excel with images. The inputs are: product dimensions and packaging, sales data by SKU (typically the last 12 weeks), gross margin by SKU, and the physical dimensions of the fixture being planned. The output is a visualisation (a picture of the shelf as it should look) and a product-by-location list that the store team uses to implement the layout.
Planogram compliance
The most common failure in planogram execution is poor compliance — stores not implementing the planogram as designed due to time pressure, stock availability issues, or local overrides. Studies consistently find that planogram compliance rates in multi-site retail are 60-75% on average, meaning a significant proportion of stores are not executing the intended layout. Improving compliance through regular store audits (manual or using mobile audit apps), training, and accountability frameworks for store managers is often a significant untapped sales improvement opportunity.