Is Your Planogram’s Retail Research Approach Flawed?

What makes planogram research successful? Brands and retailers are looking for reliable, projectible data to give credence to their decisions when it comes to shelf and package testing. The problem is that many shopper insights and category management teams are still relying on static 2D planogram tests with attitudinal measures of intent- to-buy. While they may think the issue lies with the POG (planogram) itself, it’s actually the test shopper experience that is the underlying problem, not the planogram chosen.


The ways planograms are laid out vary from retailer to retailer, and within each retailer. Therefore, it’s not possible to capture all the possible configurations of each iteration of the retail merchandising tool. But a well-designed study would account for the major differences in principles that are applied to categories to get the best outcome.


An approach that consistently tests with 90% or greater accuracy when compared with in-market results would achieve that goal. 3D shopping exercises get results predictive of in-market results, even when using only one planogram, despite the retail execution problems and variety of planograms used in the real world.

Here we look at the challenges of 2D planogram research, and why 3D digital twin technology helps solve these common problems.


What Makes a Successful Study Approach? 

Let’s take package testing, for example. Important questions arise when it comes to choosing a successful study approach: 


Is the exercise representative of the dynamics being assessed? Any approach that doesn’t attempt to understand the impact the package will have on sales is missing the point of making a packaging change altogether. 


People don’t shop in 2D; they approach an aisle at indirect angles, and rarely stand directly in front of the shelf. Because there are a variety of behaviors and approaches that need to be captured, it’s most important to get accurate sales behavior by allowing them to shop a category as they normally would. 


When testing in 3D virtual stores, it is easy to isolate the packaging change you are testing. The only change is the packaging itself, while all other variables remain the same. This allows for an accurate result. Doing this same design across multiple retailers’ planograms makes a study even more robust in understanding if there are differences across retailers or channels. 


Is the stimulus representative of the marketplace? The key here is the ability of the respondent to behave as they would in a real brick and mortar store. They must be able to move through the aisle and actually pick up the items to examine them. When testing for a package change, they may not recognize the product and need to see it from all angles to understand what it is. They need to have the opportunity to zoom in to read the fine print and get the information they want from a package. For most shoppers, that won’t be much, but for some being able to read the ingredients and nutrition information makes a big difference in their decision. Any approach that doesn’t allow for this level of interaction with the store layout will have a hard time getting accurate sales behavior.


Is the respondent sample representative of consumers in your category? If the sample design isn’t well-designed to get category shoppers, then it will not be successful in getting accurate sales data. Using online samples to get total geographic representation—while making sure your sample allows for shoppers across multiple channels—can help mitigate some of the issues of testing only one store planogram, but separate samples for each channel is the ideal. It’s also more expensive. Strong research design is always necessary to ensure you are getting the right audience into any method.


Three Common-sense Challenges

Challenge #1: Choosing a Planogram

Any one retail planogram won’t be used in a very large number of retailers and store locations. Yet, many manufacturers and retailers continue to use planograms at a national level to help guide their visual merchandising efforts. Why is this? Designing a best practices planogram is a starting point that can help retailers make adjustments based on what each retailer is trying to do with that category. Every store manager then makes changes based on their own store and the products they carry. The point of testing a package design at a national planogram level is to understand if the packaging will have an impact on sales behavior in general, with basic principles of category management being applied.


If we can show that the packaging for new products or arrangements should have a positive impact at that level, then it likely will have an impact overall and increase sales, despite the retail execution issues that will happen. Using a 3D simulation approach allows for the most accurate experience where shoppers can shop as they normally would in a brick-and-mortar store if faced with that national planogram. Iterations for various retailers can also be tested if the schematics vary considerably, but there are diminishing returns if the changes are minimal. Side-by-side testing with in-store tests has consistently shown 3D virtual store testing to be highly correlated with in-market results (.9+correlations of dollar shares of products, brands, segments, categories).


Challenge #2: Representing Reality

Many 2D planograms represent a panoramic section of the shelf space and all the product facings, yet it can often mean the shopper view is from 12 or more feet away—which is wider than most grocery aisles and doesn’t accurately portray a typical in-store shopping experience. These 2D planograms and shopping mechanisms often do not allow shoppers to approach the shelf and interact with the products, and they prevent us from gathering useful understanding of how the packaging might influence sales behavior, or really any aspect of that behavior, such as noticing the packaging change. The issue isn’t that planograms don’t reflect reality, it is that 2D planograms rendered from 12 feet away don’t allow respondents to show you how the packaging will impact them.


The problems with static planogram images are fairly obvious. For example, how would the yogurt section with its bunker be depicted? If the respondent can see the products on the bottom shelf or the top shelf as easily as they can the eye-level shelf, then we know that won’t elicit accurate behavior. Height, distance, and walking angles are all elements critical to capturing accurate sales behavior needed during retail space planning.


Challenge #3: E-commerce

Online shopping has grown to now represent about 15% of CPG sales. However, it’s not yet profitable for retailers, largely because of the lack of impulse purchasing in e-commerce visits. The solution to this is for the online shopping experience to evolve and become more like the brick-and-mortar experience of a real-life retail space. 


Virtual store interfaces for online shopping are taking on this challenge. V-commerce is just around the corner, and along with it is the ability to test online experience in a revolutionary way. As retailers and manufacturers look to maintain their revenue and grow it profitably in the online space, virtual shopping and online shopper insights will become the norm. 


Update Your Research Approach with 3D Planogram Software

In today’s ever-changing and increasingly digital retail business, it only makes sense for retail stores and brands to start innovating their shopper research processes in an effort to continuously improve customer experience. 3D shopping exercises can solve many of the issues that arise with an outdated, 2D approach to planogram testing. Contact InContext to learn how to get started with virtual shopper research.
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