Store Layout and Design

Shopper found dead in Local Store; Cause of Death - Boredom

Stanley Marcus, Chairperson – Neimen Marcus

In Time Poverty Economy, stores have to make shopping experience exciting

Store Image&

Space Productivity

MerchandisingFixture SelectionMerchandise PresentationVisual Merchandising

Store DesignExterior DesignAmbienceLighting

Store PlanningSpace AllocationLayoutCirculation

Visual CommunicationsRetail IdentityGraphicsPOS, Signage

Store Image

Store Image = Merchandise stocked + Promotional Activities + Customer Service

7-Eleven

“7-Eleven” a US retailer having 4000 convenience stores

Why not “8-Twelve” 7-Eleven stresses on store hours

Rhyme and Rhythm of seven-eleven

Orange-Green logo Quality – Freshness

Price saving signs conveys promotional environment

Smell of Cheese +Sight of sausages create certain atmosphere

Space Productivity

The more merchandise the customer are exposed to, that is presented in the orderly manner, the more they tend to buy

In-store Advertising and displays let the customer know that what is happening in other shopping areas and thus encourage to visit that area

Retailers are spending more on in-store design, merchandise presentation, Visual displays and in-store promotions instead of advertising

It is easy to make; that customer buy more who is already in the store than getting new one

Consumer Behaviour – Supermarket Style

Most Customers are not only right handed but also right headed

Stock national brand right of store brands so that consumer goes across store brand to get the national brand

Display higher gross margin product on right side of the aisles

Put bakery product on right so as to make the customer hungary. Supermarkets know hungary customer is the best customer

Most customers think neatness counts

‘Dump Displays’ are haphazard displays they give cheap looks Great Bargain

Handwritten signs create the impression of recently lowered prices

Most Customer are likely to focus on large central display

Follow 25-25-50 rule

Of all endcaps 25% should have advertised sale merchandise (that the customer will seek out)

Other 25% should be unadvertised sale items (that causes customer to remain alert when looking at an endcap)

Remaining 50% should be regular priced seasonal or impulse merchandise

Retailers tend to violate above rule when mfr. offer rent for their displays

There is little bit greed in every one of us

“Limit 3 to a customer” interprets as great deal tend to buy 3

Customer are so excited to buy great price on butter that they fail to notice that item’s complementary product i.e., jelly and breads prices have increased

Allocating Space

Starting point for developing a floorplan is analysing how the available store space measured in square footage, should be allocated for different departments

Types of space needed

Five Types: 1) Back Room 2) Office and other personal space 3)Aisles, Service Areas 4) Wall Merchandise Space 5)Floor Merchandise space

Back Room:

Back Room is required to receive, process and hold inventory

This space varies with the type of retailer (50% in Department store, 10% in Specialty and Convenience store)

SCM practices with JIT has brought down back room space

Warehouse Clubs have only receiving areas but no back room

Cartons of excess inventory is kept at higher levels (84”)

Retailer thus pays same rent for the sq. footage but use heights thus using cubic footage

This stocking method interestingly creates low-cost image of the store

Offices and other Functional Spaces

This includes break room, training/meeting room, cabin, bathroom facilities

This space gets lesser priority

Aisles, Service Areas and other Nonselling areas

Main aisles should be broad and should lead to smaller aisles like herringbone structure

These aisles should be wide enough upto 15 ft.

Other non-merchandised area are dressing rooms, layaway areas, service desks

Productivity – Merchandised area or non-merchandised area (Trade off ?)

Floor Merchandise Space

Here, many different types of fixtures are used to display wide variety of merchandise

Its just not to cram the largest amount but to place so that consumer can understand and shop

Wall Merchandise Space

They serve as fixtures; holding tremendous amount of merchandise

Provide visual backdrop to the floor merchandise

Space Allocation Planning

20% of the inventory is not looked by the customer

This stresses to know the productivity and profitability of all merchandise

Two reasons for the space planning – 1)Revising the space allocation of existing store OR planning a new store

One such measure is Space Productivity index

% age of total gross margin dollars for a particular merchandise

%age of space required by that merchandise=

If the index is below 1 than category is underperforming

For Apparels the index is highest, for furniture- least (lesson?)

Underperforming categories sometimes have to be continued

Space Allocations for a new Store

In the absence of past data, space allocation is based on industry standards

Robert Kahn to Sam Walton – Store profitability is not the function of adding more merchandise displays, but

Sales per square foot = f (Number of Customers) x (The length of time they spend on the store

Wal Mart then built ten 85,000 sq. ft. store and ten 1,15,000 sq. ft. store

Larger stores produced higher sales per square foot

Parking space was always full, showing shoppers were spending more time

Comfortable space should be there for the customers to pass through the aisles

Myth: If customer is sitting down, he is not shopping.

Put at least one bench for the customer to rest

Put a water stand in the corner

Space Planning Considerations

• High traffic & highly visible areas– Entrances, escalators, check-out area, end aisles, feature areas

Profitability of merchandise Private brand, higher margin categories

Customer buying considerations Impulse products near front Demand/destination areas in back, off the beaten path

Physical characteristics of product Bulky vs. small/easily stolen

Complementary products should be adjacent Sales rate

Display more units of fast-selling merchandise (tonnage merchandising

Types of Layouts

Produce

Office & Office & customer customer serviceservice

Books, magazines, seasonal display

Rec

eivi

ng

& s

tora

ge

EntranceCheckouts

Grid Layout - AestheticsAesthetics repetitive, limited site lines+ Efficiency+ Efficiency

cost, space productivity, time

FixturesFixtures

• Straight racks

• Gondolas (island-type self-service counters; tiers of shelves, bins, or pegs)

• Repetitive pattern

Bulk of stock areas +Bulk of stock areas +

Feature areasFeature areas

• End caps

• Promotional aisles/areas

• Walls

• Point-of-sale areas

Location of depts.Location of depts. Exit

Racetrack Layout

Major and minor loopsMajor and minor loops with multiple entrances & multiple entrances & multiple sight linesmultiple sight lines, draws shopper around the store, encourages exploration, impulse buying

Location of departmentsLocation of departments men’s vs. women’s impulse goods – near entrances, to the right, escalators, point-of-saledemand/destination – upper floors, back corners; complementary – adjacent

Display areasDisplay areas – feature areas (walls, promotional areas, point- of-sale areas, feature fixtures, windows)

FixturesFixtures – feature fixtures – four-way, free-standing/mannequins, glass cases+ gondolas, rounders & straight racks for bulk-of-stock & sale merchandise

Free-Form (Boutique) Layout

Storage, Receiving, Marking

Underwear Dressing Rooms

Checkout

Clearance Items

Feature Feature

Jean

s

Cas

ual

Wea

r

Sto

ckin

gs

Acc

esso

ries

Pan

ts

Top

sT

ops

Ski

rts

and

Dre

sses

Hat

s a

nd H

andb

ags

Display Window Display Window

Fixtures Fixtures

• Bulk-of-stockBulk-of-stock - straight racks, gondolas, rounders (very flexible)

• FeatureFeature – glass cases, 4-way, free-standing, custom-built fixtures

Feature areasFeature areas

Windows, walls, feature fixtures, point-of-sale

+ Aesthetically pleasing, relaxing, asymmetrical, invites browsing

- Less efficient, more costly, more sales assistance needed, more theft

Shrinkage

Loss of merchandise through theft, loss and damage is called Shrinkage

Retailers only know that their inventory in the store has shrunk

Stores that make the customer to move through entire store fall victim to high shrinkage

Shrinkage ranges from 1 to 4 percent of retail sales

Avoid hidden areas of the store

Bring down the merchandise movement to avoid damage

• vertical merchandisingvertical merchandising - eye movement - left to right & down• high margin merchandise - 15% below horizontal (51” - 53” & 56” - 58”)• not alphabetical, “flank” new & private label with popular national brands

Location of Merchandise – PLANOGRMS(map – photos, drawings, computer generated)

Merchandise Presentation Techniques

• Style/Item PresentationStyle/Item Presentation – most basic, most common

• Idea-Oriented PresentationIdea-Oriented Presentation – complementary, unifying theme

• Color PresentationColor Presentation – blocks or concentrations of color

• Price LiningPrice Lining – e.g., designer, bridge, better, moderate; under glass, not under glass

• Vertical MerchandisingVertical Merchandising – uses walls, high gondolas; uses natural eye movement; often combined with color

• Tonnage MerchandisingTonnage Merchandising – large quantities, “stock it high and let it fly” – equated with value/low price

• Frontal PresentationFrontal Presentation – 4-way fixtures, display face-out, often combined with vertical merchandising