Why is the POG so important?
The Final Grade
Finals. Argh
All-nighters. Red Bull. Study groups. Stress. Anxiety. Ready for the school year to be over. All of these emotions hit me this month as my kids (2 in College and 1 in High School) experienced the annual ritual of final exams. That time of year when the final exam leads to the ultimate scorecard of your performance for the year. Often determining if you are going to enjoy the summer or will need to do extra work at summer school.
In the spirit of “High School Never Ends”, at least in the consumer packaged goods industry, or CPG, the final exam has been replaced by the “Line Review”. Your final grad is the Planogram or POG.
What is a Planogram?
The planogram, also referred to as the POG or schematic, outlines how products are placed on a retail shelf. A Retailer will create a POG in such a way to maximize sales and profit while promoting a good shopping experience. Key decisions made by Retailers include brand presence, positioning, pricing, and new items. Manufacturers know that the more space, better positioning, and more new items a Retailer places in the planogram, the more successful they will be in terms of sales and market share. Every category that is shopped in a Target, Walmart, 7-Eleven, and Home Depot has a planogram.
How are POGs created?
Depending on the categories you may follow, there are millions of planograms that are generated every year. In the beverage industry, for example, there are over 200,000 stores in the United States that have a planogram for the energy drink category alone. Add water, tea, milk, carbonate soft drinks… millions of planograms.
Once items are determined, store specific POG’s are built by using item and store level dimensions. Item images and dimensions are procured through Product Image Management services such as SMSB or Syndigo while shelf dimensions are provided by the retailer.
It’s no wonder that planogram software is big business. Firms such as Blue Yonder (formerly JDA) and Relex receive millions of dollars per year from manufacturers and retailers to build store level planograms and integrate sales data from syndicated sources such as IRI or Nielsen. There are more basic software tools available like EZPOG when simple planograms are needed.
Why is the POG so important?
It’s every brands’ scorecard. In the CPG world, sales organizations are built to improve their position on the shelf. Secure “bullseye positioning”, gain more space and mandate new items. The difference between “bullseye” and bottom shelf could be worth millions of dollars of sales. Not taking new items could mean losing share to your competition. The POG is everything! The final exam. And the grades will be issued on a pass/fail basis.
For more information regarding planogram software and Product Image Database, contact VisionGroupRetail.com or email rich.brown@smsb.com. Vision Group is the owner of EZPOG, the worlds easiest planogramming software.