Classify customers on the following two basis
1. Hypothetically2. Empirically derived
evidence
Theoretically customers can be divided in to
Prospectors Reluctant shoppers
Prospectors:
Customers who are generally positive about shopping
View retail environment as a hunting ground for fresh ideas, fashion & bargains
Such persons play a game with retailers in which they get good value for their money
Reluctant shoppers:
Customers who have little interest in shopping
Take it as only a necessary means to achieve goods
Based on surveys the following customers are classified (differentiated on the basis of their motivation and store preferences).
Based on analysis of survey responses of customers , A study was done way back in 1992’ at supermarkets in Britain & US
And this revealed three categories:The heavy buyers Congestion (overcrowding) dislikersLocal shoppers
The heavy buyers: Having larger incomes & households age below 45 years have preference for large volumes Select out-of-town stores
Congestion Dislikers: Similar to reluctant shopper Claim to avoid peak time shopping Hold management responsible for any
delay
Local shoppers: Prefer to shop at small local stores Spend less money More often are old people, coming from
small households
Compulsive (habitual) shoppers: More often own credit cards Young in age Usually women Lower self-esteem Indicate addictive shopping behavior Thus more of customers having emotional
problems
Loyal shoppers: Prefer to frequently patronage a particular store Purchase merchandise sort by them.
Customer Classification - 2
Indian market is no more a mass market which can be served in a single way
Thus based on that KSA Technopark, consumer outlook study proposed three customer categories:
Technology babies Impatient Aspirers Balance seekers
Technology babies:
Shoppers who fall in age between 8-19 years
Techno savvy Gadget loving young customers who love
spending money More spending on books, music, mobile
phones, eating out, footwear & apparel
Impatient Aspirers:
Shoppers who fall in age between 20-25 years
Aggressive, independent, indulgent (non-judgmental) & career driven shoppers
For whom creativity and Customization counts great while shopping
Balance seekers:
Fall in age between 26-50 Sober and sophisticated Fond of high end gadgets but spend
cautiously
Indian retailer aggressively foray (venture) in to retailing by Adapting multiple store formats Diverse product line Dispersed location
But now faced inter-related issues Ever transient customer preference Diminishing operational margins Increasing competition from the other
players
Hence continuous pressure to create increasing value for the customers
Have you ever thought of why a customer moves all the way to MusicWorld to buy his/her favorite album
Same is available more cheaper at neighborhood stores.
Has redefined the shopping for music Its store design and visual merchandising
initiatives provides an enduring shopping experience.
MW has used bright colors in its interiors Has set up listening posts (where customer
can listen to music and buy if they wish) Music is played on Bose speakers
continuously & that’s probably the most attracting feature.
Is the primary concern of the retailer But creating an image is not an easy
task As the attraction is relative to various
stimuli attached Like
Physical facilities Location Merchandise offered Services provided Pricing policies Promotional activities
Quality of the merchandise offered, prices & assortment
Advertising, external attractiveness, salesmanship & fashionability.
Convenience of location, products offered, shopping experience, ease in transaction
Cleanliness of the premises, credit facilities, level of customer sophistication, free space inside and outside.
In broader sense THE EXTERIOR & THE INTERIOR design of the store are some of the key determinants of a retailers image.
It is the most significant exteriorAs it displays the store name.Marquee is the painted Signboard It typically carries
Store name Trademark Other relevant information like captions
E.g.: McDonald’s Golden arch is the most popular marquee in the world.
Careful planning of this element is also essential
First of all retailer should first determine the number of entrance
Ideally an outlet should have 2 entrance one for the pedestrians and a side entrance for the vehicular traffic.
Both should be designed separately as they serve different purpose
Retailers may select A regular Revolving Electric Self-opening Push-pull Climate controlled door ( a door with an
air curtain in the entrance whose temperatures is fixed same as inside stores).
A wide & rich walkway makes a very unique feature of a store’s image
Compared to narrow & constrained walkway.
Thus retailer while constructing should ensure that ample space is available for a walkway.
This helps the customers to identify the store and the merchandise offered
And motivates them to enter the store
Display windows carry lot of information to customers about the stores
Along with the following benefits
1. Creating particular mood by displaying the merchandise being offered
2. Conveying the store ‘Contemporariness’ by displaying seasonal merchandise that is currently in fashion
3. Attracting the price sensitive customers by displaying merchandise that is for sale
4. Catching the attention of pedestrians by displaying eye-catching goods that are not directly linked directly with the merchandise being offered. (E.g.: Furniture that are not for sale but still displayed to attract)
5. Show its concern towards the society by displaying messages that are for the common good of the public
Creating good display windows requires proper planning
Including Number, Size, shape, color, theme & frequency of changes in a year
Usually retailers in shopping mall do not have display windows facing the parking area
As they feel that vehicular traffic is generally not attracted by the display windows.
The size also does matters The height of the building can be
disguised / non-disguised
Disguised : means some portion of the store is hidden i.e. below the ground
Non-disguised height of the building means all its portion is visible to the
pedestrians
A retailer cannot go for a huge building for a Fashion boutique
And can neither go for a small building for a department store
Apart from a Unique store design Elaborate marquee Recessed open air entrance Decorated window displays Distinct size of the building
What about the surrounding areas & the stores around
E.g.: An up market premium store will not fit in an area dominated by low price discount
stores.
Like say Asopalav finds it difficult in its Rantanpol branch
Even the demography & lifestyle of the area matters a lot to the store
At a very first sight it creates an impression in the customer’s mind
Psychologically proved do leave an impression in their minds
It also do convey the meaning about the store
Steel Exteriors: tend to project an image of strength
Glass Exteriors: creates an unique impression of contemporariness (modern)
Concrete structures: creates an impression of a low cost & value based stores
Bricks: creates an upscale image
Colors also creates a strong image in the minds
But this depends on three things Hue + Value + Intensity.
Hue = Shades of Color Value= Lightness / Darkness of the hue Intensity= Brightness / Dullness
Red, yellow & orange are Warm Colors (comfortable & informal atmosphere)
Blue, green & violets are Cool Colors (Formal, Lonely & Chilled atmosphere)
Prevention involves controlling Employee & Customer pilferage
While planning the exteriors flow in & out of the customers should be managed well
As well as proper monitoring devices at entry, exit, inventory receiving doors & trash disposal corridors
The principle objective of any retailer to manage interiors is
To maximize its sales Customer satisfaction Minimize the operational cost
Interior of the store should be designed well so as to meet the above purpose
Retailers Can make the best out of the available space
By proper layout management & thereby make it unique
That can be done through a proper Store Layout Visual Merchandise
1. Value of the space2. Space utilization & allocation
1. Value of the space
It represents the measures of square foot allotted to each category
Sales/Sq foot measures: by stores, departments or free standing stores
Sales/ Sq foot of exposure: Shelf space allocation for merchandise like grocery & cosmetics
Sales / Cubic foot: for the goods in freezers & refrigerators.
The space near the stores entrance is the most valuable
The space value starts decreasing gradually as move towards the end of the store
Similarly as height increases the value decreases.
2. Space utilization & allocation
The retailer basically requires five types of space in its store:
I. Back roomII. Office & other functional spaceIII. Aisle, service areas & other non-selling
areaIV. Floor SpaceV. Wall Space
Allocation based on historical salesAllocation based on Gross marginAllocation based on Industry
averagesAllocations based on strategic
objectives
Is used to analyze the performance of the merchandise and then allot them space
It follows 80-20 rule i.e. 80 % of revenue comes from 20
% of merchandise, thus should identify the stock that generate maximum revenues
First step ranks the stock based on different parameters (most of based on contribution margin) = S-COGS
Second Step is measure the margin/ Sq Foot.
Third step is to sort the stock in to A-B & C category.
A = 5 % of items Contributing 70 % of revenue
B = 10 % of items Contributing 20 % of revenue
C = 65 – 70 % of items Contributing 10 % of revenue
D = Remaining SKU’s that don't contribute anything
Should get rid of such SKU’s By Mark downs
Merchandise Presentation Techniques
Grid Layout:
Like classroom benches Generally found in Grocery stores Consists of long aisles Best in supermarket where consumer comes to buy similar
kind of product
Race track layout:
Has a major aisle running inside the store Customers can view various other departments through
this aisles Best suiting in the departmental store Here the color and flooring is different from the
merchandise area Each department has natural or virtual breaks Gives concrete concentration to each separate
departments (as its not hotchpotch customers have selected that area and then came there)
Free-Form Layout: Otherwise known as “Boutique layout” Aisles and fixtures are asymmetrical Works more in Specialty stores Where it is most needed to show the entire
room as a fashion living room Arranged in such a way that gives a look which
creates a wide range merchandise impression in the customers mind
E.g.: Westside & all other international fashion boutiques