Since the onset of the pandemic, you’ve probably noticed an upswing in customers and sales. But while customers pop in for prescriptions, pain relievers, or a box of disposable face masks or two, if they’re not sticking around to look at anything else, it’s time to devise a plan. A planogram, that is.
Planograms are visual diagrams that guide you on how to arrange retail shelves to maximize front-end sales. They show you exactly where to place your front-end products, based on research-backed factors indicating the products that should be profitable and turn quickly. Shelf height, product arrangement, and product placement equally help increase sales.
“Planograms are very valuable to independent pharmacies because the space in the front end of the store is typically limited and needs to generate a specific amount of profit per square foot,” said Kim Leach, National Account Manager at CDMA. “I like to call a planogram a planoguide because it guides pharmacists how to set the shelves. It allows the pharmacy to stock the best-selling, most profitable SKUs.”
A Planogram’s Purpose
With thousands of different front-end products per category, how does an independent pharmacy owner know what to sell?
While pharmacies have visits from manufacturers and distributor representatives to educate and help them merchandise products, they don’t occur nearly as much as they did years ago. Instead, planograms have replaced that store visit. What’s more, planograms can eliminate nearly all the front-end planning for the pharmacy, which lessens the amount of time and resources a pharmacy owner must sacrifice.
“Pharmacists are busy behind the pharmacy counter, and a planogram saves time in determining the best item selection for the shelf,” said Leach. “Planograms also bring analytical expertise to the front end along with guidance with best-in-class merchandising practices. An example would be merchandising a private brand next to the OTC it matches against and to merchandise the private brand to the right of the national brand.”
How Planograms Work
Planograms demonstrate how to arrange products based on general categories and subcategories. For example, cold and allergy is a general category, while cough drops, allergy, and cold and flu are subcategories.
Planograms also show how to arrange the products in a category by subcategory, and then individual SKUs (stock keeping units) within the allotted shelf space. “A category analyst reviews syndicated IRI data to identify underperforming SKUs, new items, and shifts taking place with the national brands in the marketplace,” said Leach. “Once the items are identified based on their ranking performance, a planogram is created for various store-size sets. For example, an eight-foot, cough-and-cold planogram will stock most SKUs, but a four-foot planogram will be cut back due to limited space. This is where the planogram is a very valuable tool.”
Updates to planograms are made with the seasonality of a category. “For example, cough-and-cold products get released in summer prior to the launch of the new fall planogram. First-aid is released in late winter to the kick-off of the spring first-aid planogram. This allows the store to stock the right SKUs that are new to the category, remove discounted SKUs and expand your private brand assortment,” said Leach.
Think about how the shopper instinctively approaches the category. Sometimes this can mean arranging subcategories according to the natural progression of an illness. When a patient feels the onset of a cold, for example, they may first grab lip care and throat drops because dry lips and a sore throat are the first signs of a cold. Patients will find those items next to each other on the shelf along with other pre-cold products.
Not only do planograms bring in extra revenue through front-end sales, but they aren’t hard to follow. In fact, pharmacists can look at their planogram, make sure their shelves are set up correctly, and if needed, incorporate products that do well with their customer base. “Everything has a shelf life. The benefit is that we’re keeping that shelf up to date with the planograms, and this is making their job easier,” said Leach.
To access Quality Choice store brand endcap planograms, please go to www.pbahealth.com/quality-choice/.
Product Assortment Considerations
Cone of Vision
The most profitable products typically go on the shelves 30 to 54 inches from the floor. This is the point where people’s vision rests, and it’s known as the cone of vision. The destination items, which are the products that shoppers seek out no matter where they are, can go on shelves outside of the cone of vision.
New Items
These are the lifeblood of any category. Review all the new items released each month and consider earning potential, promotional spend, category growth, product orientation, and innovation.
Products that Address Side Effects
As a pharmacist, be sure to stock over-the-counter items that resolve the common side effects of your top 50 prescribed medications. For example, some prescriptions may cause headaches, so be sure to stock pain relievers.
Destination Products
These are the items that customers specifically go to a store to get (i.e. in the cold and allergy department, destination items include children’s products and popular nasal allergy and flu relief items). Customers will search for destination products no matter where they’re positioned on a shelf, so these items are typically on lower shelves.
Niche Items
These are items that aren’t found at competitors’ stores. These can only be found at their independent pharmacy, such as specialty supplements or local products.
Manufacturer-Supported Products
Some manufacturers supply pharmacies direct support through marketing programs. These might include advertising, coupons, brochures, signage, circulars, and online initiatives to help them push sales.
OTC Products to Carry in Your Front End
“Items to be stocked are the top performing brands, which drive sales through television and social media advertising,” said Leach. She shares the following tips on how to best stock your front end to increase your sales.
Private Brand
Carrying private brands will deliver the most profit.
Planogramed Endcap Displays
These save the pharmacist time from having to come out from behind the counter, and they can point right to the Pharmacist Recommended private brand endcap. Planogramed endcaps such as Allergy, Sun Care, Cough and Cold, First Aid, etc. also create a secondary location to capture an impulse purchase if a customer does not walk down the OTC aisle.
Clip Strips
Retailers will planogram the locations for clip strips. For example, you may find lip balm on a clip strip in another area of the store where the consumer might not find the lip balm on the shelf. Secondary placement creates an environment to capture the impulse purchase that might not happen otherwise.
From the Magazine
This article was published in our quarterly print magazine, which covers relevant topics in greater depth featuring leading experts in the industry. Subscribe to receive the quarterly print issue in your mailbox. All registered independent pharmacies in the U.S. are eligible to receive a free subscription.
More articles from the September 2022 issue:
- Expand your Revenue Stream
- New COVID-19 Subvariant Threatening the U.S
- Coming Soon: Over-the-Counter Hearing Aids
- Planograms Lend a Helping Hand
- Reducing Patients’ Fall Risk
- ProfitGuard Helps You Hold the Line
- Mastering Inventory Management
- Addressing Social Determinants to Health
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