Departmentalization

Space allocation

Layout Design

Rajnish Kumar

Departmentalization

Why it is required

How it is done

What is the best way ??

A look at the Market ….

CategoryMkt size

'06% share

'06 growth rate Mkt size

'10% share

'10 growth rate Mkt size

'15% share

'15

  US $bn  btw 2005-

2010 US $bn  btw 2015-

2010 US $bn  

Food beverage & tobacco 195 65% 7% 256 60% 6% 342 54%

Personal care 15 5% 11% 23 5% 9% 35 5%

Apparel 21 7% 11% 33 8% 9% 50 8%

Footwear 5 2% 11% 7 2% 9% 11 2%

Furnishings 4 1% 15% 7 2% 12% 12 2%

Consumer durables & IT 14 5% 15% 24 6% 12% 43 7%

Furniture 9 3% 15% 16 4% 12% 28 4%

Jewelery & watches 15 5% 12% 24 6% 9% 37 6%

Medical & health services 8 3% 12% 12 3% 12% 21 3%

Recreation 2 1% 1% 3 1% 15% 7 1%

Others 12 4% 18% 23 5% 16% 53 8%

Total 300     428     639  

1991 2008

1.Food & Grocery

2.Clothing

3.Footwear

4.Consumer durables

5.Home Linen

6.Movies & theatre

7.Eating out

1.Food & Grocery

2.Clothing

3.Footwear

4.Consumer durables

5.Expenditure on DVDs & VCDs

6.Home Linen

7.Home accessories

8.Accessories

9.Gifts

10.Take away/ pre-cooked/RTE meals

11.Movies & theatre

12.Eating out

13.Entertainment parks

14.Mobile phones & service

15.Household help

16.Travel packages

17.Club membership

18.Computer peripheral & Internet usage

How has it changedImpact on consumer spending/shopping behavior: In 1991 there were just 7 categories accounting for 80% of consumer spending. These have expanded to 18 in 2008 and the list is expanding !

Customer : Demographics:

SEC A/B/C of Tier-II towns Mostly families from town, business/service

class Age: 25-40 years, males/females

Psychographics:

Progressive/exposed to current trends Shopping is an experience v/s. shopping as a

chore Is a discerning shopper – seeks good quality

products and wants to stretch his wallet Wants to emulate friends in Metros Takes his Indian’ness seriously and has strong

peer pressure

Category Role

Category Role Retailer View Customer View Example

Traffic Builder Lower Margin

High Frequency

Saving

Top Ups/Convenience

Fruits and Vegetables

Eggs

FMCG

Cash Cow High Margin

Destination

Aspiration

High cost of acquisition from alternate source

Toys and Games

Home Linen

Branded Luggage

Perception builder Medium Margin

High Fashion

Value Pricing

Lifestyle

Apparel

Merchandise Mix

Apparel - 20 % Footwear - 10 % Toys - 5 % Soft Home - 10 % Hard Home - 20 % CD - 15 % FMCG - 30 %

** On the basis of sales Turnover

All Store

FMCG Hard lines Soft lines

GroceryPersonal

careCD

For The Home

ApparelHome Linen

Departments

Space Allocation

Who does it and how is it done

Evaluation

9

Trivia – 50% of Women get their ideas for clothes from store displays or window Shopping

Store Planner’s Responsibility

Department Locations

Entrance

Which Floor

Position on the floor

Store traffic flow

Near Elevator / Escalator

Men’s/Women’s Category

Demand / Destination Areas

Impulse Products

Physical Characteristics of Merchandise

Space Allocation

10

Department adjacencies

Avoid Butt Brush

Factors for Merchandise displayWhat MerchandiseHow Much Merchandise?How Much Space?Where to Place?Total Expected Sales within dept

Evaluation Sales Per Square Foot Sales Per Linear Foot

Space Allocation

Department Area Allocated (Square Feet)

Apparel  

Men's wear 1500

Tailor for alterations 100

Trial Rooms(2) 100

Women's wear 500

Trial Rooms(2) 100

Kid's wear 1000

Footwear 800

Toys 400

Soft Home 500

Hard Home  

Stainless Steel Utensils 100

Plastic household items 100

Melamine 100

Non-stick 100

Thermo ware 100

Crockery/ Glassware 200

Luggage 100

Furniture 400

Mobiles 100

Watches 100

Bakery/ Cafeteria 200

Total 6600

**In case the floor area is lesser the space will be allocated either proportionately or based on the market potential

Space Allocation Plan 1 ST Floor - 6600 Sq Ft.

12

Plano gram of Hard Lines Department

13

Evaluation – Space productivity Index

Subcategories with Low SPI need to be evaluated

14

Store Layout

• The way in which the Fixtures and furniture is arranged within a store• It controls the movement and flow of traffic within the Store• It also plays a major role in determining ‘shopping experience’•Is important for the image of the store

15

Store Layout - Types

Grid

Race Track

Free Flow

Spine

Herringbone

16

Store Layout - Types

Grid

17

Food World, Food Bazaar, Reliance Fresh, Etc.

Grocery Stores

Long Gondolas

More Shelves

Repetitive Pattern

Lesser Aisle Space

Customer Familiarity

More Cost Effective

Higher Space productivity

Why Grid Layout

Disadvantages – Poor Product Exposure , Rushed Shopping behavior & Poor aesthetics

18

Store Layout - Types

Race Track / Loop Layout

19

Lifestyle, Shopper’s Stop, Central, Etc Main Aisle loops through the store View of multiple departments Access to multiple departments Exposes more merchandise Most important departments on the rear of the Store Department Flooring, Lighting & Ambience change Encourages

Exploring new merchandise Impulse Buying

Why Race Track / Loop Layout

Disadvantages – Takes time to shop and move around.Offers little familiarity

20

Store Layout - Types

Free Flow/ Free Form Layout

Why Free Flow

West Side, Wills Lifestyle, Etc. Fixtures & Aisles asymmetric Boutique Layout Specialty Stores or Within Departments of large stores Expensive fixtures

DisadvantageWastage of SpaceNo control of flow of traffic

22

Store Layout - TypesSpine Layout

Tanishq, Titan Eye Plus , Raymond’s, Etc. Single Main Aisle runs from front to rear Both directions

23

Store Layout - Types

Herringbone Layout

Croma Apt for Consumer Durables & Hardlines Single Main Aisle runs from front to rear