3. Objectives
• Critical issues retailers consider in designing a
store
• Advantages/Disadvantages of alternative
store layout
• How is store floor space assigned to
merchandise and department
• Best techniques for merchandise presentation
4. A well designed store…
• Entrance: creates expectation and offers
promises, store front should entice ,a single
message – positive store image
• Clutter at the start- can create confusion and
disorientation, uncomfortable feeling
• Inside the store: leads the customer through the
store journey-using lighting, signage, display
leads customer – through path of discovery
• Checkout : store visit conclusion
5. Store Design objective
• Implement the retailers strategy
• Influence the customer buying behavior
• Provide flexibility
• control design and maintenance costs
• meet legal requirements
6. Store Design and Retail strategy
• Primary objective: to implement retailers
strategy
• Design- consistent and reinforce the retailers
strategy by meeting the needs of the target
market and building a competitive advantage. Eg
Sam`s-price sensitive- floor design and racks –
metal and concrete to reinforce the brand image
• Flooring and shelving also affect retailers image:
glass-elegance
7. Influence customer buying behavior
• Store design- should attract customers, enable them to
locate merchandise, keep them in the store for as long
time, motivate them to make unplanned, impulse purchase
and provide them with a satisfied customer experience.
• Buying behavior-influences store design: rise in nuclear
families-limited time
• e.g. P&G: “first moment of truth”- first 3-7 seconds,
customer notices an item on the store shelf . Mkt research
– customers do not walk down one aisle and up the next.
Park at the end of aisle-walk partway to pick the product
and return to the cart. Hence puts its best selling brands at
the middle of the aisle
8. Flexibility
• Dynamic business- what may work today, may
not be applicable tomorrow- need to change
the merchandise mix- need to change layout
• attempt to design stores with max flexibility.
• Two forms: ability to physically move and
store the components, and the ease with
which components can be modified
• Book stores
9. Cost
• Cost of implementing the store design and maintain
the store appearance
• Free form design – costly- can encourage the
customers to explore and increase sales
• More lighting- expensive jewelry and other
merchandise
• Good lighting- can make the merchandise look better
and increase sales
• Store design – affect labor costs- traditional dept
stores with diff depts – comfortable shopping, but
require one person constantly to provide service
11. Layout
• Need to determine the basic layout of the store
• Use signage to guide customers through the store and assist them
in locating and finding info about merchandise
• variety of approaches used to feature specific products
• layouts- method of encouraging customer exploration – present
them with a layout which facilitates a specific traffic pattern.
• Eg Toys R us uses a specific layout which forces customers to move
through a sections of inexpensive impulse purchase products to
larger more expensive goods
• 3 types of layouts
- Grid
- Racetrack
- free form
14. Grid layout
Has parallel aisles with merchandise on shelves on both
sides of aisles, Cash registers located at the entrance/exit
Well suited for shopping trips in which
customer needs to move through entire
store and easily locate the products they
want to buy. Eg grocery – supermarkets.
Cost efficient, less wasted space, all
aisles are of same width.
Use of shelves- more merchandise on
sales floor.
Low cost standardized fixtures
Not visually exciting design
customers not exposed to all of the
merchandise
17. Racetrack layout
Provides a major aisle that loops around the store to guide customer
traffic around various depts. To direct customers through the stores, aisles
must be defined by change in surface/color. cash register stations are
typically located in each dept bordering the racetrack
Facilitates the goal of
getting customers to see
the merchandise available
in multiple depts and
facilitate impulse purchase.
Customers forced to take
diff viewing angles.
Customers forced to take
diff viewing angles.
20. Free form layout
Boutique layout, arranges fixtures and aisles in an
asymmetric pattern. Use in small specialty stores or
within depts of large stores
Provides an intimate and
relaxing environment that
facilitates shopping and
browsing
No well defined traffic pattern,
customers are not drawn
towards the store naturally.
Personal selling becomes more
important . Layout sacrifices
some retail storage and display
space to create a more spacious
environment
21. Signage and Graphics
• Help customers locate specific products and
departments, provide specific information, and
suggest items or special purchases
• Graphics- can add personality, beauty to the
stores image
• Location: use to identify the location of
merchandise. Large stores display directional
signage to guide customers around the store and
from one area to another.
Hanging signs from the ceilings – to enhance
visibility
22. Signage and Graphics
• Category signage: used within particular dept
or sector of the store, smaller than directional
signs. Purpose- to identify the types of
products offered-located near the referred
goods.
23. Signage and Graphics
• Promotional signage: Signage displaying
special offers may be displayed in windows to
entice customers into the store.
24. Signage and Graphics
• Point of sale: placed near the merchandise
they refer to so that customers know its price
and detailed information. Help to quickly
identify special offers
25. Signage and Graphics
• Lifestyle images: use various images such as
pictures of people and places to create moods
that encourage customers to buy the
products.
26. Signage can be more effective if:
• Coordinate signs and graphics
with the stores image: should act
as a bridge between merchandise
and target market. Color, tone,
graphic should complement the
merchandise. For eg formal
display – not for childrens
section. Color combinations
should appeal to specific target
audience – primary colors for
kids, hot vivid colors- teens etc
• Inform customers: Informative
merchandise- make merchandise
more desirable
27. Effective signage
• Use signage and
graphics as props: using
signs that masquerade
as props, is a great way
to unify a theme or
merchandise for an
appealing overall
presentation
28. Effective signage
• Keep signs and graphics fresh: should be
relevant to items displayed . New signs= new
merchandise
• Limit text on signs: signs with too much copy
wont work.
• Use appropriate typefaces on signs
29. Digital signage
• typically developed and
produced at corporate level and
distributed to stores.
• Visual content is delivered
digitally through centrally
managed and controlled centrally.
• content = video clips to price of
merchandise
• superior in recall and content
• enhance stores environment and
atmospherics
• can be customized according to
the strategy .
• ensures timely output, and
decreases promotional cost
30. Feature Areas
• are those areas within a store designed to get
customers attention
• include freestanding displays, end caps,
promotional aisles, windows ,cash wraps or
point of sale areas and walls
31. Free standing display
• Are fixtures or
mannequins located on
aisles designed to
primarily attract
customers attention
and bring them into the
department.
• Often display and store
most newest, exciting
merchandise into the
dept
32. Cashwraps
• POP counters or checkout
areas are places in stores
where customer can
purchase merchandise.
• Go to these areas and wait
in the line to make a
purchase, often display
impulse purchase
• reduce customer
complaints for poor
checkout service,reduce
staff and increase customer
convenience
33. End caps
• displays located at the
end of aisle
• products sales increase
dramatically.
• Use for higher margin,
impulse merchandise
• to communicate
promotional offer
36. Windows
• can help to draw
customer into the store
• provide the visual
message about the type
of merchandise offered
and type of image the
store wishes to portray.
• should be tied to the
merchandise and other
displays in the store
• should display shopping
mood for a season or
holiday
37. Space management
• space within store- is a scarce resource
• allocation of store space to merchandise
• location of departments or merchandise
categories in the same area
38. Space allocated to Merchandise categories
• Factors which retailer consider when deciding
how much shelf space to allocate to
merchandise category and brands are:
- Space productivity
- Inventory turnover
- Impact on store sales
- Display considerations
39. Space allocated to Merchandise
categories
• Space productivity: rule of thumb: to allocate
space on basis of merchandise sale. If a
particular item represents 20% of store sales,
the 20% of store space allocated to it.
• Two commonly used measures for that: sales
/sqfoot, and sales/linear foot.
• Eg apparel retailers-display on freestanding
fixtures- use sales/sqfoot, and super markets=
sales/linear foot
40. Space allocated to Merchandise
categories
• Inventory turnover: inventory turnover and gross
margin contribute to GMROI, Thus merchandise
with higher inventory turnover- should get more
shelf space. fast selling merchandise- more shelf
space
• Impact on store sales: need to consider
allocation impact on the entire store. Objective:
to maximize profitability of the entire store
• Display considerations: physical structure of the
store and the availability of fixtures
41. Location of departments or merchandise
categories
• Location of merchandise also determines how a customer navigates
through the store
• By strategically placing demand or impulse merchandise throughout the
store, retailer-increases chances that customers will shop the entire store
and will focus attention on stores .
• Entry area/decompression zone: Introductory displays welcome and
educate the customers . Making adjustment to the new environment and
developing a visual impression of the new store
• Strike zone: after decompression zone, they often turn right and observe
the price and quality of the first items they encounter. Critical zone as it
makes the first impression of the stores offering. Hence- most compelling
merchandise-place here
• Right hand side of the store: Most heavily trafficked and viewed area-
prime area for displaying the GMROI merchandise. Eg supermarkets-
produce area- fresh fruits and vegetables is an appeal
42. Location of departments or
merchandise categories
• Impulse merchandise: products which are purchased without prior
plans. Eg magazines, perfumes/cosmetics are located at the front of
the store. Also placement in heavily trafficked areas such as the
entrance, right side of the store, cash wrap etc
• Demand/promotional merchandise: often placed at the back,left
hand corner of the store. Placing in this area- pulls customer
throughout the store, increasing the visibility of other products on
the way. Eg staple merchandise such as milk/eggs – supermarket
• Special merchandise: in lighter traffic areas, where decision making
takes time
• Adjacencies: often complementary products are clustered together
to facilitate multiple purchase
43. Location of merchandise within a category- use
of planograms
• Retailers devote considerable amount of time to location
of specific SKUs within a category. For eg private brands to
the right of national brands, so when consumer sees the
product, he will see the higher priced national brand first
and then the store brand.
• To determine where the items should be located within a
category or department, retailer generates maps known as
planograms.
• Planogram is a diagram that shows how and where specific
SKU s should be placed on retail shelves or displays that
will increase customer purchase.
• Locations can be illustrated in the form of
photos/computer output/artist rendering.
44. Planogram
• In developing, retailers need to make the category visually
appealing, consider the manner in which the consumers shop and
achieve the retailers financial and strategic objectives.
• Planogrammer must be able to balance both art and science .Art (
visual impact and presentation) and science (financial analysis).
• Use of technological software's to prepare.
• Use analyses of historical sales, gross margins, turnover, size of
SKU, retailers design criteria-software determines the optimal shelf
space and location for each SKU.
• Planograms are designed, tested and changed in a virtual shopping
environment
• Also useful for those merchandise which does not fit into the shelf
nicely
