Ms. Roberts

Sales & Marketing

The Planogram: Why Hotel Pantries and Gift Shops Can’t Succeed Without One

By Janine Roberts, Director of Sales and Marketing, Tradavo

One of the biggest challenges I see in hotel pantries and gift shops is that the people who are responsible for making it succeed have little to no retail experience. They are excellent at booking rooms, meeting the needs of guests, managing teams and budgets, but when I ask them how they went about selecting the pantry assortment they offer, they quickly confess that it is arbitrary at best: a combination of brand standards, sourcing availability, and whatever they were hungry for that day as they shopped the aisles of Costco.

I use to ask to see the planogram for the store upon arriving for an evaluation and quickly discovered that no one was using them. Actually – to my surprise – very few even knew what a planogram was! That is when I realized that if managers were going to be successful at increasing revenue and profitability in their pantries and gift shops, we would have to go back to the basics of retail and treat the hotel pantry like a true retail operation – rather than a guest amenity.

A planogram is a schematic drawing of shelves and fixtures that allows retailers to make optimal use of available shelf-space in a retail store. These drawings are custom sized to the exact dimensions of the individual store and provide a number of retail benefits including assortment selection, merchandising improvements, and sustainability of those merchandising efforts by both the property and area directors.

There is no where that a planogram is more essential than in a hotel pantry or gift shop where managers are often working with limited shelving space and haphazard fixture solutions. An effectively designed planogram will utilize every inch of the available shelf space and help managers sustain correct merchandising by providing a visual illustration of where each product facing should be in the event of out of stocks. Product placement and improved sales are just two very basic reasons a retailer should be implementing planograms in their shops. Planograms provide many other positive benefits as well:

Assigned selling potential to every square foot of space. A hotel pantry or gift shop is utilizing valuable real estate in your lobby. It is important to maximize every inch of that used space to increase Sales Per Occupied Room and overall profits. Empty shelves and underutilized spaces are money left on the table! Make the most of every inch of your pantry by planning the layout of product to make use of all space available.

Be sure to use a shelf management system to best achieve this. A spring loaded, shelf organizer fits directly onto your existing shelf space and allows all products to be merchandised vertically rather than horizontally. This turns 24” of shelving space into an assortment of 12-14 candy bars as opposed to 4-5 candy bars when merchandised horizontally. It keeps products neat and organized at all times and keeps the pantry shelves looking full down to the last facing within a row.

Satisfying guests with a better visual appeal. There is a science behind retail: a science that requires a firm understanding of the psychology behind each guest’s purchase. Successful retailers understand that the merchandising of products – how items are presented and exactly where they are placed – is essential to the sale. Guests decide if they are going to purchase something almost instantly upon entering your retail operation. A bountiful, well merchandised, well planogrammed offering is sure to please guests and increase sales.

Plan your groupings and layout the way people think about food. Sweet or salty? Snack or meal? Keep like food groups together so that a guest can take in all the options for one of their above cravings in one visual scope. Avoid odd pairings like placing sundries or OTC’s next to food items. The last thing a person wants to see when shopping for an indulgent snack is a pack of Immodium or Pepto Bismol. Create a clear delineation between food and non-consumable products.

And remember - No one wants to walk into a bare pantry. Food items look fresh and appealing when they are bountiful. Many managers think that spacing things out into organized sections with shelf space between looks organized. What it looks like to guests is: empty, old, and lacking variety. So they head elsewhere to make a purchase taking your coveted Sales Per Occupied Room revenue with them. A pantry should look completely full with products slotted neatly, but tightly together as seen in the planogram above.

Tighter inventory control and reduction of out-of-stocks. Tracking par levels (the rate at which you sell through each product on a daily or weekly basis) and managing inventory is much easier when you know exactly how many product facings can fit on your shelves and where they should be. With a planogram, you can effectively track how many of any give sku can fit on a your shelf and how quickly you sell through that number of items, then you can better anticipate how often that item needs to be reordered. For example, if the planogram allots space for 12 Snicker’s Bars and the store sells 3 per day. Then when the last 12 Snicker’s Bars on the shelf, the ordering manager knows he has 4 days to have a new case on property before experiencing costly out of stocks.

Easier product replenishment for staff. A planogram makes it very easy for desk associates or assigned staff to maintain the market. With a visual presentation of what the store SHOULD look like and where items belong, a desk associate or other staff member can easily maintain an effectively merchandised space with little to know knowledge of merchandising. Similarly, area directors, regionals and QA reps can walk into the pantry on any visit with an exact image of what the space looks like at its optimal set up.

Planograms also allow for an easier handoff to new employees. The biggest interruption I see to the success of a retail operation is turnover. Time and time again a store is set up correctly, priced correctly for guests, looking great and ready to go, and then the person in charge of ordering for the pantry is promoted or moves to a new property and everything falls apart because the new person comes in without a plan or a whole lots of direction on how to supply and merchandise the store.

When planograms are present, it is very easy to hand off an exact visual representation of the products and their shelf placement so that any new person can easily see what items should be ordered and where they should be placed when they arrive. This keeps brand standards in place and only best sellers on your shelves.

Effective communication tool for staff-produced displays. Malls, grocery stores, hardware stores, and other traditional retailers rely on them daily to keep their shelves correctly merchandised, to bring in seasonal displays, and to maintain a psychologically inviting retail experience that results in a sale. Hotels can achieve similar results by sending updated planograms to full service gift shops showing where new seasonal display items should be placed. It is also useful in pantries for rotating in new products at each season – like removing allergy medicines to replace with cold medicines in the fall and winter, or switching out light frozen meals with heartier options during the cold winter months. Simply work in the new facing on the planogram and send out to all stores with a request to update for the season.

This type of planning and organization allows corporate offices to achieve a consistency on a national level while minimizing the effort and time investment for properties on the ground. It creates a win-win that results in maximum revenue with minimal frustrations.

Getting Started:

• The easiest way to get started is to set the shelves exactly how you want them with all desired products completely stocked and take up close photos of each section by category: Sweet Snacks, Salty Snacks, Healthy Snacks, Quick Meals, and Sundries. These photographed sections can be used for all planogramming purposes including maintaining the merchandising and replenishment by
• Planograms can also be drawn or built using shapes and basic desktop publishing tools for those with programs like MS Word, Publisher or PowerPoint.
• You can purchase planogramming software through companies like Smart Draw or Shelf Logic and obtain the desired product photos from their image partners

As this recession lingers, I am contacted more and more frequently by owners and franchise groups who have become acutely aware of the often underestimated revenue potential in their lobby shop. The first step we take in increasing that revenue is to create a custom planogram that makes it easier for managers to succeed at retail with minimal experience in the field. By utilizing every linear inch of real estate dedicated to the retail effort to properly display the best selling items that guests are looking for, general managers experience double digit increases in revenue creating a win-win-win for guests, management companies, and the general managers who finally have the direction they need to succeed at retail.

Janine Roberts, Director of Sales and Marketing for Tradavo, a retail services company specializing in design, optimization and supply needs of the industry. She works to improve retail profits and the automate management of hotel lobby shops. Janine developed and implemented the Retail Services element of Tradavo to provide hotels assistance in selecting, merchandising and effectively pricing inventory. She also created the highly successful Grand Opening Program to help general managers preparing for a grand opening and to launch their retail operation. Ms. Roberts can be contacted at 303-883-2335 or jroberts@tradavo.com Extended Bio...

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