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DC Lecture Five :Store Layout and Design


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DC Lecture Five :Store Layout and Design

  2. 2. Distribution Channels MKTG 1058 LECTURE FIVE Store Layout and Design (Dunne Chapter Thirteen) 5-22
  3. 3. Learning Objectives of Chapter 13 •List the elements of a store’s environment and define its two primary objectives. •Discuss the steps involved in planning the store. 5-3
  4. 4. Learning Objectives of Chapter 13• Describe how various types of fixtures, merchandise presentation methods and techniques, and the psychology of merchandise presentation are used to increase the productivity of the sales floor.• Describe why store design is so important to a store’s success.• Explain the role of visual communications in a retail store. 5-4
  5. 5. In Seconds… A shopper should be able to determine a store’s  Name  Line of trade These are tests of  Claim to fame how effective a store’s image is  Price position  Personality 5-5
  6. 6. “ a store is much more than a place where merchandise is presented and sold”If you werelooking formerchandisein foroutwardboundadventure,wouldn’t liketo shop in astore such asthis? 5-6
  7. 7. Store Design Objectives Implement retailer’s strategy Influence customer buying behavior Control design and maintenance costs Provide flexibility Meet legal requirements 5-7
  8. 8. Impact on Customer Behavior Attract customers to store Enable them to easily locate merchandise Keep them in the store for a long time Motivate them to make unplanned purchases Provide them with a satisfying shopping experience 5-8
  9. 9. An example of an attention-gettingretail design (Bangkok Airport) 5-9
  10. 10. Tradeoff in Store DesignEase of locatingmerchandise forplanned purchases Exploration of store, impulse purchases 5-10
  11. 11. Importance of the Store Image In an economy of time-poverty, this is particularly important when customers enter the store with a negative attitude/emotion because they have other things they would rather be doing. In fact, no other variable in the retailing mix influences the consumers initial perception of a brick & mortar retailer as much as the retailers store itself. 5-11
  12. 12. Introduction to Store LayoutManagement • Store Image is the overall perception the customer has of the store’s environment. • Space Productivity represents how effectively the retailer utilizes its space and is usually measured by sales per square foot of selling space or gross margin dollars per square foot of selling space. 5-12
  13. 13. The importance of store image Linked to the differentiation and positioning of the retail store “Perception is reality” Retailer leverages on store image to create perceived differentiation away from rival retailers Customers visit the store to share experiences and not just buy merchandise 5-13
  14. 14. Introduction to Store LayoutManagement •Elements of the Store Environment •Objectives of the Store Environment 5-14
  15. 15. Introduction to Store LayoutManagement Store image: Is the overall perception the consumer has of the store’s environment. 5-15
  16. 16. Introduction to Store LayoutManagement Space productivity: Represents how effectively the retailer utilizes its space and is usually measured by sales per square foot of selling space or gross margin dollars per square foot of selling space. LO 1 5-16
  17. 17. Elements That Compose the StoreEnvironment 5-17 Exhibit 13.1
  18. 18. Objectives of the StoreEnvironment• Tasks to create desired store image and increase space productivity:• Get customers into the store (market image).• Convert them into customers buying merchandise once inside the store (space productivity).• Do this in the most efficient manner possible. 5-18
  19. 19. Store Image (what happens when you don’t have aphysical store- catalogue retailing)  L.L. Bean offers relaxed, classic apparel styles to its customers. To help convey this image, L.L. Bean’s catalog and advertising reinforces their image. For catalog customers, the catalog is the store environment. 5-19
  20. 20. Store Image• By incorporating a café as an integral part of Borders bookstores, a very relaxing and casual ambiance is created. 5-20
  21. 21. Store Image By incorporating a café as an integral part of Borders bookstores, a very relaxing and casual ambiance is created. 5-21
  22. 22. Developing a Store Image The ability to create and change store image through the store environment-becomes more important every day for a retailers survival. Two key words- create and change Implications? 5-22
  23. 23. Elements of Retail Image (source: Berman) 5-23
  24. 24. Retailing Truism•The more merchandise customers are exposed to, the more they tend to buy.To what extent do you agree with thisstatement? Are there other factors toconsider? Is there a direct correlation betweenmerchandise quantity and assortment andactual purchase propensity? 5-24
  25. 25. Increasing Space Productivity: The more merchandise customers are exposed to, the more they tend to buy. Many retailers are focusing more attention on in-store marketing, based on the theory that it is easier to get a consumer who is already in a store to buy more merchandise than planned, than to get a new consumer to get in the car and make a trip to a store. 5-25
  26. 26. Space Productivity To enhance space productivity, retailers must incorporate planning, merchandising, and design strategies that minimize shrinkage (the loss of merchandise through theft, loss, and damage). 5-26
  27. 27. Store Layout (Apple Store) 5-27
  28. 28. Store Front Presentation- Apple 5-28
  29. 29. Store Planning•Allocating Space•Circulation•Shrinkage Prevention 5-29
  30. 30. Store Planning• Floor Plan is a schematic that shows where merchandise and customer service departments are located, how customers circulate through the store, and how much space is dedicated to each department.• Stack-Outs are pallets of merchandise set out on the floor in front of the main shelves. 5-30
  31. 31. These Warning Signs May Indicate aSpace Problem Exhibit 13.2 5-31
  32. 32. Allocating Space•Types of space needed: •Back room •Office and other functional spaces •Aisles, services areas, and other non- selling areas of the main sales floor •Wall merchandise space •Floor merchandise space 5-32
  33. 33. Prime Locations for Merchandise Highly trafficked areas  Store entrances  Near checkout counter Highly visible areas  End aisle  Displays 5-33
  34. 34. Location of MerchandiseCategories Impulse merchandise – near heavily trafficked areas Demand merchandise – back left-hand corner of the store Special merchandise – lightly trafficked areas (glass pieces) Adjacencies – complimentary merchandise next to each other 5-34
  35. 35. Allocating Space Warehouse stores are able to take advantage not only of the width and depth of the store, but also the height, by using large “warehouse racks” that carry reachable inventory at lower levels with large pallets or cartons of excess inventory at higher levels. 5-35
  36. 36. Store Planning Space Allocation Planning Improving Space Productivity in Existing Stores Space Allocations for a New Store 5-36
  37. 37. Space Allocation Planning • Improving Space Productivity in Existing Stores • When a retailer has been in business for some time, it can develop a sales history on which to evaluate merchandise performance, refine space allocations, and enhance space productivity. Various quantitative measures, such as the space productivity index, can be used to develop a more productive space allocation. 5-37
  38. 38. SPI : Space Productivity Index• Space Productivity Index is a ratio that compares the percentage of the store’s total gross margin that a particular merchandise category generates to its percentage of total store selling space used. 5-38
  39. 39. Merchandise Productivity Analysis Exhibit 13.3 1.58= 4.57/ 2.9 5-39
  40. 40. Space Allocations for a New Store When a retailer is creating a new store format, it bases space allocation on industry standards, previous experience with similar formats, or more frequently, the space required to carry the number of items specified by the buyers 5-40
  41. 41. CirculationFree FlowGridLoopSpine 5-41
  42. 42. Circulation: Free Flow Exhibit 13.4Free Flow, the simplesttype of store layout, is alayout in which fixturesand merchandise aregrouped into free flowingpatterns on the salesfloor. This type of layoutworks well in smallfashion stores, usuallysmaller than 5,000 squarefeet, in which customerswish to browse through allof the merchandise. 5-42
  43. 43. Free-Form Layout Storage, Receiving, Marketing Hats and Handbags Underwear Dressing RoomsStockings Accessories Tops Checkout counterCasual Wear Pants Tops Skirts and Dresses Clearance ItemsJeans Feature Feature Open Display Window Open Display Window 5-43
  44. 44. Circulation: Grid Layout Exhibit 13.5Grid is another traditional form of store layout in which the counters andfixtures are placed in long rows or "runs," usually at right angles,throughout the store. The grid is a true "shopping" layout, best used inretail environments in which the majority of customers wish to shop theentire store, such as is in supermarkets. 5-44
  45. 45. Grid Store LayoutReceiving & storage Fruit Books, magazines, Cart seasonal display area Vegetables Checkout s Entrance Office & custom er Exit service 5-45
  46. 46. Circulation: Loop Layout Exhibit 13.6Loop layouts have become popular as a tool for enhancing the productivityof retail stores. A "loop” provides a major customer aisle that begins at theentrance, "loops" through the store, usually in the shape of a circle,square, or rectangle, and then returns the customer to the front of thestore. The loop can be a powerful productivity tool, by exposing shoppersto the greatest possible amount of merchandise 5-46
  47. 47. Circulation: Loop Layout  Loop Layout is a type of store layout in which a major customer aisle begins at the entrance, loops through the store, usually in the shape of a circle, square, ar rectangle, and then returns the customer the front of the store.  Advantages  Exposes customers to the greatest amount of merchandise 5-47
  48. 48. Circulation: Spine Layout Spine Layout is a type of store layout in which a single main aisle runs from the front to the back of the store, transporting customers in both directions, and where on either side of this spine, merchandise departments using either a free-flow or grid pattern branch off toward the back aisle walls. 5-48
  49. 49. Spine Layout Exhibit 13.7 5-49
  50. 50. What kind of layout does the IKEA store in Singapore use? 5-50
  51. 51. Shrinkage Prevention When planning stores, the prevention of shrinkage due to theft, damage, and loss must be considered. Some layouts will minimize vulnerability to shoplifters by increasing the visibility of the merchandise 5-51
  52. 52. Planning Fixtures and MerchandisePresentation Fixture Merchandise types presentation panning Selecting fixtures Visual and merchandise merchandising presentation methods 5-52
  53. 53. Planning Fixtures and MerchandisePresentation On-Shelf Merchandising Is the display of merchandise on counters, racks, shelves, and fixtures throughout the store. 5-53
  54. 54. Fixture Types•Hardlines Fixtures•Softlines Fixtures•Wall Fixtures These are minor topics; just read briefly from text 5-54
  55. 55. Fixture Types: Hardlines Hardlines Fixtures: The workhorse fixture in most hardlines department is known as the gondola. The gondola can hold a wide variety of merchandise -- in fact, virtually all hardlines -- by means of hardware hung from the vertical spine. Tables, large bins, and flat-base decks are used to display bulk quantities of merchandise when the retailer wants to make a high-value statement 5-55
  56. 56. Fixture Types: Softlines Softlines Fixtures. A large array of fixtures have been developed to accommodate the special needs of softlines, which often are hung on hangers. The four-way feature rack and the round rack are the two fixtures most heavily used today. The round rack is known as a bulk or capacity fixture, and the four-way rack is considered a feature fixture, because it presents merchandise in a manner which features certain characteristics of the merchandise (such as color, shape, or style) 5-56
  57. 57. Fixture Types: Wall Wall Fixtures. The last type of fixture are those designed to be hung on the wall. To make a plain wall merchandisable, it is usually covered with a vertical skin that is fitted with vertical columns of notches similar to that on the gondola, into which a variety of hardware can be inserted. Shelves, peghooks, bins, baskets, and even hanger bars can be fitted into wall systems. 5-57
  58. 58. Four-Way Feature Rack andRound Rack Exhibit 13.8 5-58
  59. 59. Merchandise PresentationPlanningMethods of Merchandise Presentation: • Shelving • Hanging • Pegging • Folding • Stacking • Dumping 5-59
  60. 60. Merchandise Presentation Techniques• Idea-Oriented Presentation• Style/Item Presentation• Color Organization• Price Lining• Vertical Merchandising• Tonnage Merchandising• Frontal Presentation 5-60
  61. 61. Merchandise PresentationPlanning Psychological Factors to Consider When Merchandising Stores:•Value/fashion image•Angles and sightlines•Vertical color blocking 5-61
  62. 62. 45-Degree Customer Sightline Exhibit 13.9 5-62
  63. 63. Vertical Color Blocking 5-63 Exhibit 13.10
  64. 64. Visual Merchandising• Visual Merchandising Is the artistic display of merchandise and theatrical props used as scene- setting decoration in the store. Berman: Proactive, integrated atmospherics approach to create a certain look, properly display products, stimulate shopping behavior, and enhance physical behavior 5-64
  65. 65. Visual Merchandising: Here’s sampling of thetechniques stores use to generate those sales: Get’m coming and going. • Escalators are a focal point of many stores. That makes them ideal locations for promotional signs and for impulse items like perfume. 5-65
  66. 66. Visual Merchandising Lead them to temptation.• Department-store design incorporates a gauntlet of goodies to stimulate impulse buys. Cosmetics, a store’s most profitable department, should always be at the main entrance to the store. We see this in most large department stores such as Tangs and Isetan 5-66
  67. 67. Visual MerchandisingIt’s all in the display.• When an item, such as a watch is displayed in a glass case, it implies luxury. An item in a glass case with a lot of space around it implies real luxury. 5-67
  68. 68. Visual Merchandising• Color is king. Retailers believe consumers are more apt to buy clothes that appear in full size and color assortments. 5-68
  69. 69. Visual Merchandising• Suggestion positioning. Once the customer has already purchased one item, it’s easier to sell an additional item. Thus apparel retailers strategically place complementary products so that there is better opportunity for selling across the product line. 5-69
  70. 70. Question to Ponder•How do fixtures and merchandise presentation interact to influence consumers in different types of retailers?Do you have you own examples to add?What about unique or creativepresentations of merchandise that youhave seen in Singapore or in your travelsto other retail cities in Asia? 5-70
  71. 71. Store Design Storefront Interior Design Design Lighting Sounds and Design Smells Total Sensory Marketing 5-71
  72. 72. Store Design•AmbienceIs the overall feeling or moodprojected by a store through itsaesthetic appeal to humansenses.Sometimes known as “storeatmosphere” 5-72
  73. 73. Elements of Atmosphere (source: Berman) 5-73
  74. 74. AtmosphereThe psychological feeling a customergets when visiting a retailer  Store retailer: atmosphere refers to store’s physical characteristics that project an image and draw customers  Nonstore retailer: atmosphere refers to the physical characteristics of catalogs, vending machines, Web sites, etc. 5-74
  75. 75. Store Design (the “book analogy”) Storefront Design. If the retail store can be compared to a book, then the storefront or store exterior is like the book cover. It must be noticeable, easily identified by passing motorists or mall shoppers, and memorable, and must clearly identify the name and general market positioning of the store and give some hint as to the merchandise inside. Interior Design can be broken into architectural elements and design finishes, and encompasses floor covering, walls, and ceilings. 5-75
  76. 76. How a retail concept is articulated by both theshop front and the interior of the store (Tissotwatch store) 5-76
  77. 77. The LV stores“creatingqueues” “over-sized visual merchandising” 5-77
  78. 78. The Apple Stores 5-78
  79. 79. Store Entrances How many entrances are needed? What type of entrance is best? How should the walkway be designed? 5-79
  80. 80. A simple, cost-efficient yet effectivedisplay. Why? Ladies Shoe Display in MBK- Bangkok 5-80
  81. 81. Gucci store in Siam Paragon Bangkok 5-81
  82. 82. General Interior Flooring  In-store Colors transportation Lighting (elevator, escalator, stairs) Scents  Dead areas Sounds  Personnel Store fixtures  Merchandise Wall textures  Price levels Temperature  Displays Aisle space  Technology Dressing facilities  Store cleanliness 5-82
  83. 83. Visual Merchandising at M&M World 5-83
  84. 84. Store Design (cont’d) Lighting is one of the most important- though often overlooked-elements in a successful store design. Retailers learned that different types and levels of lighting can have a significant impact on sales. Sounds and Smells: Total Sensory Marketing. Research has shown that senses other than sight can be very important, too, and many retailers are beginning to engineer the sounds and smells in their stores 5-84
  85. 85. Creating a store experience World Cup Screening in a Sports Good Section in a Thai Department Store 5-85
  86. 86. Visual Communications•Name, Logo, and Retail Identity•Institutional Signage•Directional, Departmental, and Category Signage•Point-of-Sale (POS) Signage•Lifestyle Graphics 5-86
  87. 87. Directional, Departmental, andCategory Signage• Directional and Departmental Signage are large signs that are usually placed fairly high, so they can be seen throughout the store.• Category Signage are smaller than directional and departmental signage and are intended to be seen from a shorter distance; they are located on or close to the fixture itself where the merchandise is displayed. 5-87
  88. 88. Departmental Signage Departmental signage serve as the highest level of organization in an overall signage program. These signs are usually large and placed fairly high to they can be seen throughout the store. 5-88
  89. 89. Category Signage Category signage helps consumers negotiate throughout the store to find the product categories they are looking for. The size of category signage varies widely from a lettering that is a few feet in height to merely inches. 5-89
  90. 90. Digital Signage Visual Content delivered digitally through a centrally managed and controlled network and displayed on a TV monitor or flat panel screen Superior in attracting attention Enhances store environment Provides appealing atmosphere Overcomes time-to-message hurdle Messages can target demographics Eliminates costs with printing, distribution and installing traditional signage 5-90
  91. 91. Point-of-Sale (POS) Signage•Point-of-Sale Signage Is relatively small signage that is placed very close to the merchandise and is intended to give details about specific items. 5-91
  92. 92. Point-of-Sale (POS) Signage• POS signage for clearance and sale items tend to be in more attention- grabbing colors in order to draw a consumer’s attention. 5-92
  93. 93. Lifestyle Graphics The Limited uses lifestyle graphics to convey the image of the product to the consumer. Here the Limited conveys the casual nature of one apparel line. 5-93
  94. 94. Summary: Usage of Signage and Graphics1. Locational – identifies location of merchandise and guides customers2. Category Signage – identifies types of products and located near the goods3. Promotional Signage – relates to specific offers – sometimes in windows4. Point of sale – near merchandise with prices and product information5. Lifestyle images – creates moods that encourage customers to shop 5-94
  95. 95. What happens if your store frontis in digital space? Retail marketing on the web The home page becomes your “store front” 5-95
  96. 96. Marks & Spencer Online 5-96
  97. 97. Online Store ConsiderationsAdvantages Disadvantages Unlimited space to present  Can be slow for dialup assortments, displays, and shoppers information  Can be too complex Can be customized to the  Cannot display three- individual customer dimensional aspects of Can be modified frequently products well Can promote cross-  Requires constant updating merchandising and impulse purchasing  More likely to be exited without purchase Enables a consumer to quickly enter and exit an online store 5-97
  98. 98. Past Year Examination Questions Chapter Thirteen: Store Layout and Design 5-98
  99. 99. April 2009 Note: these two exam questions remind us of the importance of reading the assigned chapter- thoroughly – and the fact that you cant pass this exam unless you read the book!! Both the quotes are taken from excerpts from Chapter Thirteen itself. 5-99