1. By Sarah Bauman

2.  First discussion will be about store design
objectives.
 Next, the elements of store design are
discussed.
 Then the decisions about how much space to
allocate to different merchandise categories
and departments and where they should be
located in the store.
 Concluding with how retailers use color,
lighting, and music to enhance the
customer’s shopping experience.

3. There are five store design
objectives…
 Implement the retailer’s strategy
 Build loyalty by providing a rewarding
shopping experience
 Increase sales on a visit
 Control costs
 Meet legal requirements

4. The primary store design objective is to
implement the retailer’s strategy. The design
must be consistent with and reinforce the
retailer’s strategy by meeting the needs of the
target market and building a sustainable
competitive advantage.
Example: McDonald’s

5. When customers consistently have rewarding
experiences when patronizing a retailer’s store
and/or Web site, they are motivated to visit the
store Web site repeatedly and develop loyalty
toward the retailer. Store design plays an
important role in making shopping experiences
rewarding. Customers seek two types of
benefits when shopping-utilitarian and hedonic
benefits.

6. Store design provides utilitarian benefits when
it enables customers to locate and purchase
products in an efficient and timely manner with
minimum hassle. Utilitarian benefits are
becoming increasingly important with the rise
in two-income and single head-of-household
families. Due to the limited time these families
have, they are spending less time shopping.
Example: Whole Food stores

7. Store design provides hedonic benefits by
offering customers an entertaining and
enjoyable shopping experience. This shopping
experience encourages customers to spend
more time in a store because the visit itself is
rewarding.
Example: Cabela’s

8. A third design objective is to increase sales
made to customers on a visit. Store design has
a substantial effect on which products
customers buy, how long they stay in the store,
and how much they spend during a visit. Since
so little time and thought is spent shopping and
selecting items in supermarkets, the purchase
decisions are greatly influenced by what
products customers see during their visit.

9. What they see is affected by the store layout
and how the merchandise is presented. Thus
retailers attempt to design their stores in a
manner that motivates unplanned purchases.

10. The fourth design objective is to control the
cost of implementing the store design and
maintaining the store’s appearance. The store
design can also affect labor costs and inventory
shrinkage. Some stores are organized into
departments that are isolated from each other.
This design provides an intimate and
comfortable shopping experience that can
result in more sales.

11. However, the design prevents sales associates
from observing and covering adjacent
departments. Another design consideration
related to controlling cost is flexibility. As the
merchandise mix changes, so must the space
and the layout of the store. Store designers
attempt to design stores with maximum
flexibility. Flexibility affects the ability to
physically modify, move, and store components
and the costs of doing so.

12. Store design or redesign decisions must comply
with the 1990 Americans with Disabilities Act
(ADA). This law protects people with disabilities
from discrimination in employment,
transportation, public accommodations,
telecommunications, and activities of state and
local governments. It affects store design
because the act calls for “reasonable access” to
merchandise and services in retail stores built
before 1993.

13. Stores built after 1993 must be fully accessible.
The act also states that retailers should not
have to incure “undue burdens” to comply with
ADA requirements. Although retailers are
concerned about the needs of their disabled
customers, they are also worried that making
merchandise completely accessible to people in
a wheelchair or a motorized cart will result in
less space available to display merchandise and
reduce sales.

14. However, providing for wider aisles and more
space around fixtures can result in a more
pleasant shopping experience for able-bodied
as well as disabled customers.

15. 1) Provide 32-inch-wide pathways in the main
aisle, to bathrooms, dressing rooms,
elevators and most fixtures
2) Lower most cash wraps and fixtures so they
can be reached by a person in a wheelchair
3) Make bathrooms and dressing rooms fully
accessible

16. Three elements in the design of stores are…
 Layout
 Signage
 Feature areas

17. Retailers use three general types of store layout
designs:
 Grid
 Racetrack
 Free form

18. The grid layout has parallel aisles with
merchandise on shelves on both sides of the
aisles. Cash registers are located at the
entrances/exits of the stores. The grid layout is
well suited for customers who are primarily
interested in the utilitarian benefits offered by
the store. They want to easily locate products
they want to buy, and make their purchases as
quickly as possible.

19. The grid layout is also cost efficient. There’s
less wasted space because the aisles are all the
same width. Finally, because the fixtures are
generally standardized, the cost of fixtures is
low. One limitation, from the retailer’s
perspective, is the customers typically aren’t
exposed to all the merchandise in the store due
to the height of the shelves. Thus the layout
does not encourage unplanned purchases.

21. The racetrack layout, also known as a loop, is a
store layout that provides a major aisle that
loops around the store to guide customer traffic
around different departments within the store.
Cash register stations are typically located in
each department bordering the racetrack. The
racetrack layout facilitates the goal of getting
customers to see the merchandise available in
multiple departments and thus encourages
unplanned purchases.

22. Low fixtures are used so that customers can see
merchandise beyond the products displayed on
the racetrack. To lead customers, the racetrack
is wider than other aisles and defined by a
change in flooring surface or color. Since many
department store customers seek hedonic
benefits, they typically spend more time
shopping at department stores, and the more
time they spend, the more they buy.

24. A free-form layout, also known as boutique
layout, arranges fixtures and aisles in an
asymmetric pattern. It provides an intimate,
relaxing environment that facilitates shopping
and browsing. However, creating this pleasing
shopping environment is costly because there is
no well-defined traffic pattern, as there is in the
racetrack and grid layouts.

25. Customers aren’t naturally drawn around the
store, and personal selling becomes more
important to encourage customers to explore
merchandise offered in the store. In addition,
the layout reduces the amount of merchandise
that can be displayed.

27. Signage and graphics help customers locate
specific products and departments, provide
product information, and suggest items or
special purchases. Graphics, such as photo
panels, can reinforce a store’s image. Signage is
used to identify the location of merchandise
categories within a store and types of products
offered in the category. Frequently, icons rather
than words are used to facilitate communication
with customers speaking different languages.

28. Smaller signs are used to identify sale items and
provide more information about specific
products. Finally, retailers may use images,
such as pictures of people and places, to create
moods that encourage customers to buy
products.

29. 1. Category Signage – used within a particular
department or sector of the store, category
signs are usually smaller than directional signs.
Their purpose is to identify types of products
offered; they are usually located near the goods
to which they prefer.

30. 2. Promotional Signage – This signage describes
special offers and may be displayed in windows
to entice the customer into the store. For
example, value apparel stores for young women
often display large posters in their windows of
models wearing the items on special offer.

31. 3. Point-of-sale Signage - are placed near the
merchandise they refer to so that customers
know its price and other detailed information.
Some of tis information may already be on
product labels or packaging. However, point-
of-sale signage can quickly identify for the
customer those aspects likely to be of greater
interest, such as whether the product is on
special offer.

32. Digital signage includes signs whose visual
content is delivered digitally through a centrally
managed and controlled network, distributed to
servers in stores, and displayed on a flat-panel
screen. Due to their dynamic nature, digital
signs are more effective in attracting the
attention of customers and helping them recall
the messages displayed.

33. Digital signage also offers the opportunity to
enhance a store’s environment by displaying
complex graphics and videos to provide an
atmosphere that customers find appealing.
Because the content is delivered digitally, it can
easily be tailored to a store’s market and
changed during the week or even the hour.
Finally, digital signage eliminates the costs
associated with printing, distributing, and
installing static signage.

34. In addition to using layout and signage,
retailers can guide customers through stores
and influence buying behavior through the
placement of feature areas. Feature areas are
areas within a store that are designed to get
customers’ attention. They include window,
entrances, freestanding displays, end caps,
promotional aisles or areas, walls, dressing
rooms, and cash wraps.

35.  Windows – window displays draw customers
into the store and provide a visual message
about the type of merchandise offered in the
store and type of image the store wants to
portray.
 Entrances – the first impression caused by the
entry area affects the customer’s image of the
store. Department stores typically have the
cosmetics and fragrance categories at the
main entrance because they are visually
appealing.

36.  Freestanding displays – are fixtures or
mannequins that are located on aisles and
designed primarily to attract customers’
attention and bring them into a department
in stores using a racetrack or free-form
layout.
 End caps – are displays located at the end of
an aisle in stores using a grid layout.
 Promotional aisle or area – is a space used to
display merchandise that is being promoted.
 Walls – because retail floor space is often
limited, retailers utilize wall space as much as
possible.

37.  Dressing rooms – are critical space in which
customers decide whether or not to purchase
an item. Large, clean, and comfortable
dressing rooms put customers in the mood to
buy merchandise.
 Cash wraps – also known as point-of-
purchase (POP) counters or checkout areas,
are places in the store where customers can
purchase merchandise. Retailers often use
these areas to display impulse items.

38. Some factors that retailers consider when
deciding how much floor or shelf space to
allocate to merchandise categories and brands
are 1) the productivity of the allocated space, 2)
the merchandise’s inventory turnover, 3) the
impact on overall store sales, and 4) the display
needs for the merchandise.

39. A simple rule of thumb for allocating space is to
allocate on the basis of the merchandise’s
sales. Two commonly used measures of space
productivity are sales per square foot and sales
per linear foot. Apparel retailers that display on
fixtures use sales per square foot and
supermarkets that display on shelves use sales
per linear foot.

40. Inventory turnover affects space allocations in
two ways. First, both inventory turnover and
gross margin contribute to GMROI – a measure
of the retailer’s return on its merchandise
inventory investment. Second, the merchandise
displayed on the shelf is depleted quicker for
faster selling items with high inventory
turnover.

41. The physical limitations of the store and its
fixtures affect space allocation. For example,
the store planner needs to provide enough
merchandise to fill an entire fixture dedicated
to a particular item.

42. As discussed previously, the store, layout,
signage, and feature areas can guide customers
through the store. The location of merchandise
categories also play a role in how customers
navigate through the store. By strategically
placing impulse and demand/destination
merchandise throughout the store, retailers
increase the chances that customers will shop
the entire store.

43. Impulse merchandise or products are purchased
without planning, such as fragrances and
cosmetics in department stores and magazines
in supermarkets, are almost always located near
the front of the store, where they’re seen by
everyone and may actually draw people into the
store.

44. Demand merchandise and promotional
merchandise are often placed in the back left-
hand corner of the store. Placing high-demand
merchandise in this location pulls customers
through the store, increasing the visibility of
other products along the way.

45. Some merchandise categories involve a buying
process that is best accomplished in a lightly
trafficked area. Categories that require large
amounts of floor space, like floor furniture, are
often in less desirable locations. Some
categories, like curtains, need significant wall
space, whereas other, like shoes, require easily
accessible storage rooms.

46. Retailers often put complementary categories
next to each other to encourage unplanned
purchases. For example, sporting goods
retailers often locate exercise equipment next
to sporting goods and apparel for children so
that mothers can see children while they are
shopping for treadmills.

47. Retailers use a variety of rules to locate specific
SKU’s within a category. For instance,
supermarkets and drug stores typically place
private-label brands to the right of national
brands. Because Western consumers read from
left to right, they will see the higher-priced
national brand first and then see and possibly
purchase the lower-priced, higher-margin
private-label item on the right that looks
similar.

48. A planogram is a diagram that shows how and
where specific SKU’s should be placed on retail
shelves or displays to increase customer
purchases. The locations can be illustrated
using photographs, computer output, or artists’
renderings.

49. Virtual-store stimulations are another tool used
to determine the effects of placing merchandise
in different areas of a store and evaluating the
profit potential for new items. In these
simulations, customers stand in front of
computer screens that depict a store aisle.
Retina-tracking devices record the eye
movements of the customers.

50. Another research method used to assess
customer reactions to planograms involves
tracking customers in actual store
environments. GPS tracking devices are placed
in customer shopping carts and on shoppers to
determine where customers and carts go in a
store. Small video cameras are strapped on the
shoppers’ foreheads to provide information on
their eye movements.

51. Visual merchandising is the presentation of a
store and its merchandise in ways that will
attract the attention of potential customers.

52. The primary purposes of fixtures are to
efficiently hold and display merchandise. At the
same time, they define areas of a store and
direct traffic flow. Fixtures work in concert with
other design elements, such as floor coverings
and lighting, as well as the overall image of the
store. Apparel retailers utilize the straight-rack,
rounder, and four-way fixtures, while the
principle fixture for most other retailers is the
gondola.

53.  Straight rack fixture – consists of a long pipe
balanced between supports in the floor or
attached to a wall.
 Rounder – also known as a bulk fixture or
capacity fixture, is a round fixture that sits on
a pedestal.
 Four-way fixture – also known as a feature
fixture, has two crossbars that sit
perpendicular on a pedestal.
 Gondolas – are extremely versatile. They’re
used in grocery and discount stores.

54. Some presentation techniques are idea-
oriented, item and size, color, price lining,
vertical merchandising, tonnage merchandising,
and frontage presentation.

55.  Idea-oriented presentation – a method of
presenting merchandise based on a specific
idea or the image of the store.
 Item and size presentation – probably the
most common technique of organizing stock
is by style or item.
 Color presentation – a bold merchandising
technique is organizing by color.
 Price lining – occurs when retailers offer a
limited number of predetermined price points
and/or price categories within another
classification.

56.  Vertical merchandising – merchandise is
presented vertically using walls and high
gondolas.
 Tonnage merchandising – is a display
technique in which large quantities of
merchandise are displayed together.
 Frontal presentation – a method of displaying
merchandise in which the retailer exposes as
much of the product as possible to catch the
customer’s eye.

57. To provide a rewarding shopping experience,
retailers go beyond presenting appealing
merchandise. In addition, retailers use lighting,
colors, music, and scent to stimulate
customers’ perceptual and emotional responses
and ultimately affect their purchase behavior.
Research has shown that it is important for the
atmospheric elements to work together – for
example, the right music with the right scent.

58. Good lighting in a store involves more than
simply illuminating space. Lighting can
highlight merchandise, sculpt space, and
capture a mood or feeling that enhances the
store’s image.

59. A good lighting system helps create a sense of
excitement in the store. Another key use of
lighting is called popping the merchandise –
focusing spotlights on special feature areas and
items.

60. Traditionally, U.S. specialty and department
stores have employed incandescent lighting
sources to promote a warm and cozy ambience.
Overall lighting sources were reduced, and
accent lighting was pronounced to call attention
to merchandise and displays. It was meant to
feel like someone’s home.

61. As the price of energy soars and retailers and
their customers become more energy-
conscious, retailers are looking for ways to cut
their energy costs and be more ecologically
friendly. Stores are switching from incandescent
lighting to more energy-efficient fluorescent
lights.

62. The creative use of color can enhance a
retailer’s image and help create a mood. Warm
colors (red, gold, and yellow) produce
emotional, vibrant, hot, and active responses,
whereas cool colors (white, blue, and green)
have a peaceful, gentle, calming effect.

63. Like color and lighting, music can either add to
or detract from a retailer’s total atmospheric
package. Music can control the pace of store
traffic, create an image, and attract or direct
consumers’ attention.

64. Smell has a large impact on customer’s mood
and emotions. Scent, in conjunction with music,
has a positive impact on the customer’s level of
excitement and satisfaction with the shopping
experience. Scents that are neutral produce
more positive feelings toward the store than no
scent.

65.  A good store design allows shoppers to move
freely, unencumbered by clutter.
 When a store is properly designed, customers
should be able to find what they are looking
for easily.
 Stores are designed so that customers can
easily view the merchandise and read the
signs.

66.  It is important to visually reassure customers
that they’re going to have the same
satisfactory experience on the Web site that
they have in stores.

67. As an architect for retail space, you are
responsible for Americans with Disabilities Act
compliance. How would you make sure that a
store’s retail layout both meets accessibility
requirements and enables the company to reach
profitability objectives?

68. Go to your favorite multichannel retailer’s
Internet site. Evaluate its degree of simplicity,
ease of navigation, readability, use of color,
consistency with the brand image, and
similarity of pricing and merchandise offered
with those of its competitors.

69. Go into the physical store location of a retailer
of your choice, and evaluate the store layout,
design, and visual merchandising techniques
they use.

70. How can signage and graphics help both
customers and retailers? Consider the following
types of retail formats that you likely have
visited in the past: discount stores, department
stores, card and gift stores. Describe which
retail formats have implemented the best
practices for coordinating signs and graphics
with each store’s image and which formats
should improve this aspect of their store layout,
design and visual merchandising.

71. What are they different types of design that can
be used in a store layout? How does the layout
impact the types of fixtures used to display
merchandise? Describe why some stores are
more suited for a particular type of layout than
others.

72. What are the pros and cons for both centralized
cash wraps and departmental cash wraps for
stores such as JCPenney and Kohl’s?