The document discusses store layout and design. It covers the objectives of store layout planning, which are to implement a retailer's strategy, influence customer buying behavior, control costs, provide flexibility, and meet legal requirements. The key elements of store layout that impact customers are store image, space allocation, merchandise placement, and aisle planning. Effective store layout and design can attract customers, help them find items, encourage spending more time and money in the store.

1. MKTG 1058:
DISTRIBUTION
CHANNELS
5-1

2. Distribution Channels MKTG 1058
LECTURE FIVE
Store Layout and Design
(Dunne Chapter Thirteen)
5-2
2

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. 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. 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. “ a store is much more than a place where
merchandise is presented and sold”
If you were
looking for
merchandise
in for
outward
bound
adventure,
wouldn’t like
to shop in a
store such as
this?
5-6

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. 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
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9. An example of an attention-getting
retail design (Bangkok Airport)
5-9

10. Tradeoff in Store Design
Ease of locating
merchandise for
planned purchases
Exploration of
store, impulse
purchases
5-10

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 consumer's initial perception
of a brick & mortar retailer as much as the
retailer's store itself.
5-11

12. Introduction to Store Layout
Management
• 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. 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. Introduction to Store Layout
Management
•Elements of the Store
Environment
•Objectives of the Store
Environment
5-14

15. Introduction to Store Layout
Management
 Store image:
Is the overall perception the consumer
has of the store’s environment.
5-15

16. Introduction to Store Layout
Management
 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. Elements That Compose the Store
Environment
5-17
Exhibit 13.1

18. Objectives of the Store
Environment
• 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. Store Image (what happens when you don’t have a
physical 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.
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20. Store Image
• By incorporating a
café as an
integral part of
Borders
bookstores, a very
relaxing and
casual ambiance
is created.
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21. Store Image
 By incorporating a café as an integral
part of Borders bookstores, a very
relaxing and casual ambiance is
created.
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22. Developing a Store Image
 The ability to create and
change store image through the
store environment-becomes
more important every day for a
retailer's survival.
Two key words- create and change
Implications?
5-22

23. Elements of Retail Image
(source: Berman) 5-23

24. Retailing Truism
•The more merchandise
customers are exposed to, the
more they tend to buy.
To what extent do you agree with this
statement? Are there other factors to
consider? Is there a direct correlation between
merchandise quantity and assortment and
actual purchase propensity?
5-24

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. 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).
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27. Store Layout (Apple Store)
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28. Store Front Presentation- Apple
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29. Store Planning
•Allocating Space
•Circulation
•Shrinkage Prevention
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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.
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31. These Warning Signs May Indicate a
Space Problem
Exhibit 13.2 5-31

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
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33. Prime Locations for Merchandise
Highly trafficked
areas
 Store entrances
 Near checkout
counter
Highly visible areas
 End aisle
 Displays
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34. Location of Merchandise
Categories
 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. 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.
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36. Store Planning
 Space Allocation Planning
Improving Space Productivity
in Existing Stores
Space Allocations for a New
Store
5-36

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. 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.
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39. Merchandise Productivity Analysis
Exhibit 13.3
1.58= 4.57/ 2.9 5-39

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
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41. Circulation
Free Flow
Grid
Loop
Spine
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42. Circulation: Free Flow
Exhibit 13.4
Free Flow, the simplest
type of store layout, is a
layout in which fixtures
and merchandise are
grouped into free flowing
patterns on the sales
floor. This type of layout
works well in small
fashion stores, usually
smaller than 5,000 square
feet, in which customers
wish to browse through all
of the merchandise.
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43. Free-Form Layout
Storage, Receiving, Marketing
Hats and Handbags
Underwear Dressing Rooms
Stockings
Accessories
Tops
Checkout counter
Casual Wear
Pants
Tops
Skirts and Dresses
Clearance
Items
Jeans
Feature Feature
Open Display Window Open Display Window
5-43

44. Circulation: Grid Layout
Exhibit 13.5
Grid is another traditional form of store layout in which the counters and
fixtures are placed in long rows or "runs," usually at right angles,
throughout the store. The grid is a true "shopping" layout, best used in
retail environments in which the majority of customers wish to shop the
entire store, such as is in supermarkets.
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45. Grid Store Layout
Receiving & storage
Fruit
Books, magazines, Cart
seasonal display area
Vegetables Checkout
s
Entrance
Office
&
custom
er Exit
service 5-45

46. Circulation: Loop Layout
Exhibit 13.6
Loop layouts have become popular as a tool for enhancing the productivity
of retail stores. A "loop” provides a major customer aisle that begins at the
entrance, "loops" through the store, usually in the shape of a circle,
square, or rectangle, and then returns the customer to the front of the
store. The loop can be a powerful productivity tool, by exposing shoppers
to the greatest possible amount of merchandise 5-46

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. 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. Spine Layout
Exhibit 13.7 5-49

50. What kind of layout does the IKEA store
in Singapore use?
5-50

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. Planning Fixtures and Merchandise
Presentation
Fixture Merchandise
types presentation
panning
Selecting fixtures Visual
and merchandise merchandising
presentation
methods
5-52

53. Planning Fixtures and Merchandise
Presentation
 On-Shelf Merchandising
Is the display of merchandise
on counters, racks, shelves,
and fixtures throughout the
store.
5-53

54. Fixture Types
•Hardlines Fixtures
•Softlines Fixtures
•Wall Fixtures
These are minor
topics; just read
briefly from text
5-54

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. 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. 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. Four-Way Feature Rack and
Round Rack
Exhibit 13.8 5-58

59. Merchandise Presentation
Planning
Methods of Merchandise Presentation:
• Shelving
• Hanging
• Pegging
• Folding
• Stacking
• Dumping
5-59

60. Merchandise
Presentation Techniques
• Idea-Oriented Presentation
• Style/Item Presentation
• Color Organization
• Price Lining
• Vertical Merchandising
• Tonnage Merchandising
• Frontal Presentation
5-60

61. Merchandise Presentation
Planning
Psychological Factors to
Consider When Merchandising
Stores:
•Value/fashion image
•Angles and sightlines
•Vertical color blocking
5-61

62. 45-Degree Customer Sightline
Exhibit 13.9 5-62

63. Vertical Color Blocking
5-63
Exhibit 13.10

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. Visual Merchandising: Here’s sampling of the
techniques 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. 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. Visual Merchandising
It’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. 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. 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. 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 creative
presentations of merchandise that you
have seen in Singapore or in your travels
to other retail cities in Asia?
5-70

71. Store Design
Storefront Interior
Design Design
Lighting Sounds and
Design Smells
Total Sensory
Marketing
5-71

72. Store Design
•Ambience
Is the overall feeling or mood
projected by a store through its
aesthetic appeal to human
senses.
Sometimes known as “store
atmosphere”
5-72

73. Elements of Atmosphere
(source: Berman) 5-73

74. Atmosphere
The psychological feeling a customer
gets 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. 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. How a retail concept is articulated by both the
shop front and the interior of the store (Tissot
watch store)
5-76

77. The LV stores
“creating
queues”
“over-sized visual
merchandising” 5-77

78. The Apple Stores
5-78

79. Store Entrances
 How many entrances are needed?
 What type of entrance is best?
 How should the walkway be
designed?
5-79

80. A simple, cost-efficient yet effective
display. Why?
Ladies Shoe Display in MBK- Bangkok 5-80

81. Gucci store in Siam Paragon Bangkok
5-81

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. Visual Merchandising at M&M World
5-83

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. Creating a store experience
World Cup Screening in a Sports Good Section in a Thai
Department Store 5-85

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. Directional, Departmental, and
Category 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. 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. 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. 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. 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. 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. 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. Summary: Usage of Signage and
Graphics
1. Locational – identifies location of
merchandise and guides customers
2. Category Signage – identifies types of
products and located near the goods
3. Promotional Signage – relates to specific
offers – sometimes in windows
4. Point of sale – near merchandise with prices
and product information
5. Lifestyle images – creates moods that
encourage customers to shop
5-94

95. What happens if your store front
is in digital space?
Retail marketing on the web
The home page becomes your
“store front”
5-95

96. Marks & Spencer Online
http://www.marksandspencer.com/gp/node/n/42966030/280-3584648-7534532 5-96

97. Online Store Considerations
Advantages 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. Past Year Examination Questions
Chapter Thirteen: Store Layout
and Design
5-98

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