Store Management CCHHAAPPTTEERR 11

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Managing the Store

Store Layout, Design, and Visual Merchandising

Customer Service

17-1
Questions CCHHAAPPTTEERR 11
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What are the critical issues retailers consider in designing a store?

What are the advantages and disadvantages of alternative store
layouts?
How is store floor space assigned to merchandise departments
and categories?
What are the consideration in where to display products in a
category?
What are the best techniques for merchandise presentation?
How can retailers create a more appealing shopping experience?
How exciting should a store environment be?

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Store Design Objectives CCHHAAPPTTEERR 11
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Implement Retailers strategy

Build Loyalty
Increase Sales on Visits
Control Cost
Legal ConsiderationsAmericans with Disabilities Act
Design Trade-Offs

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Store Design and Retail Strategy CCHHAAPPTTEERR 11
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The primary objective of store design is implementing the retailers strategy

Meets needs of target market
Builds a sustainable competitive advantage
Displays the stores image

(c) Brand X Pictures/PunchStock

C. Borland/PhotoLink/Getty Images

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 CCHHAAPPTTEERR 11
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McDonalds remodeled its stores to better appeal to European customers

Retailing Management
Retailing
Retailing
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The
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 CCHHAAPPTTEERR 11
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In India, a retailer finds key to success is clutter

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Build Loyalty CCHHAAPPTTEERR 11
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Store design provides utilitarian benefits when it

enables customers to locate and purchase products in an
efficient and timely manner with minimum hassle
Store design provides hedonic benefits by offering
customers an entertaining and enjoyable shopping
experience.

H. Wiesenhofer/PhotoLink/Getty Images
17-7
Increase Sales on Visits CCHHAAPPTTEERR 11
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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.

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Control Cost CCHHAAPPTTEERR 11
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Control the cost of implementing the store design and

maintain the stores appearance
Store design influences
Shopping experience and thus sales
Labor costs
Inventory shrinkage

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Legal Considerations CCHHAAPPTTEERR 11
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Americans with Disabilities Act (ADA)

Protects people with disabilities from discrimination in
employment, transportation, public accommodations,
telecommunications and activities of state and local
government
Affects store design as disabled people need
reasonable access to merchandise and services built
before 1993. After 1993, stores are expected to be
fully accessible.

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Reasonable Access
What does that mean?
CCHHAAPPTTEERR 11
27

32 inch wide pathways on the

main aisle and to the bathroom,
fitting rooms elevators and
around most fixtures
Lower most cash wraps and
fixtures so they can be reached
by a person in a wheelchair
Make bathroom and fitting room
fully accessible
Keith Brofsky/Getty Images

17-11
Design Trade-Offs CCHHAAPPTTEERR 11
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Ease of locating
merchandise for
planned purchases

(c) image100/PunchStock
Giving customers
adequate space to
shop
Exploration of store,
impulse purchases
Royalty-Free/CORBIS

Productivity of using
this scarce resource
for merchandise
17-12
Store Design Elements CCHHAAPPTTEERR 11
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Layouts
Signage and Graphics
Feature Area

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Store Layouts CCHHAAPPTTEERR 11
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To encourage customer exploration and help customers

move through the stores
Use a layout that facilitates a specific traffic pattern
Provide interesting design elements

Types of Store Layouts

Grid
Racetrack
Free Form

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Grid Layout CCHHAAPPTTEERR 11
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Easy to locate merchandise

Does not encourage customers
to explore store
Limited site lines to merchandise
Allows more merchandise
to be displayed
Cost efficient
Used in grocery, discount,
and drug stores: Why?

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Racetrack Layout (Loop) CCHHAAPPTTEERR 11
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Loop with a major aisle that has access to departments

Draws customers around the store
Provide different viewing angles and encourage
exploration, impulse buying
Used in department stores

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JCPenney Racetrack Layout CCHHAAPPTTEERR 11
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Free-Form (Boutique) Layout CCHHAAPPTTEERR 11
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Fixtures and aisles arranged

asymmetrically
Provides an intimate, relaxing environment
that facilitates shopping and browsing
Pleasant relaxing ambiance doesnt come
cheap small store experience
Inefficient use of space
More susceptible to shoplifting
salespeople can not view adjacent spaces.
Used in specialty stores and upscale
department stores

17-18
Usage of Signage and Graphics CCHHAAPPTTEERR 11
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Location identifies the location of merchandise and guides customers

Category Signage identifies types of products and located near the goods
Promotional Signage relates to specific offers sometimes in windows
Point of sale near merchandise with prices and product information
Lifestyle images creates moods that encourage customers to shop

H & M effectively uses graphic

photo panels to add
personality, beauty, and
romance to its stores image
17-19
Suggestions
for Effectively Using Signage
CCHHAAPPTTEERR 11
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Coordinate signage to stores

image
Use appropriate type faces on
signs
Inform customers
Use them as props
Keep them fresh
Limit the text on signs
Use appropriate typefaces on
signs
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Digital Signage CCHHAAPPTTEERR 11
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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

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Feature Areas CCHHAAPPTTEERR 11
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Areas within a store designed to get

the customers attention
Feature areas
Entrances
Freestanding displays
Cash wraps (POP counters, checkout
areas)
End caps
Promotional aisles
Walls
Windows
Fitting rooms
PhotoLink/Getty Images

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Space Management CCHHAAPPTTEERR 11
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The space within stores and

on the stores shelves are
fixtures is a scare resource
The allocation of store space
to merchandise categories
and brands
The location of departments
or merchandise categories in
the store

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Space Planning CCHHAAPPTTEERR 11
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Productivity of allocated
space (sales per square foot,
sales per linear foot)
Merchandise inventory
turnover
Impact on store sales
Display needs for the
merchandise

17-24
Prime Locations for Merchandise CCHHAAPPTTEERR 11
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Highly trafficked areas

Store entrances
Near checkout counter

Highly visible areas

End aisle
Displays

17-25
Location of Merchandise Categories CCHHAAPPTTEERR 11
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Impulse merchandise near heavily trafficked areas

Demand/Destination merchandise back left-hand
corner of the store
Special merchandise lightly trafficked areas (glass
pieces, womens lingerie)
Adjacencies cluster complimentary merchandise next
to each other

17-26
Location of Merchandise within a
Category: The Use of Planograms
CCHHAAPPTTEERR 11
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Supermarkets and drug stores place private-label brands to the right of

national brands shoppers read from left to right (higher priced national
brands first and see the lower-priced private-label item)
Planogram: a diagram that shows how and where specific SKUs should be
placed on retail selves or displays to increase customer purchases

17-27
Learning customers movements and
decision-making
CCHHAAPPTTEERR 11
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Videotaping Consumers
Learn customers movements, where they pause or move
quickly, or where there is congestion
Evaluate the layout, merchandise placement, promotion

Virtual Store Software

Learn the best place
to merchandise and
test how customers
react to new products

17-28
Visual Merchandising: Fixtures CCHHAAPPTTEERR 11
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A. Straight rack
B. Rounder (bulk
fixture, capacity
fixture)
C. Four-way fixture
(feature fixture)
D. Gondolas

17-29
Straight Rack CCHHAAPPTTEERR 11
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Holds a lot of apparel

Hard to feature specific styles and
colors
Found often in discount and off-
price stores

Royalty-Free/CORBIS
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Rounder CCHHAAPPTTEERR 11
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Smaller than straight

rack
Holds a maximum
amount of merchandise
Easy to move around
Customers cant get
frontal view of
merchandise

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Four-Way CCHHAAPPTTEERR 11
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Holds large amount of

merchandise
Allows customers to
view entire garment
Hard to maintain
because of styles and
colors
Fashion oriented
apparel retailer

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Gondolas CCHHAAPPTTEERR 11
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Versatile
Grocery and discount stores
Some department stores
Hard to view apparel as they
are folded

Royalty-Free/CORBIS

17-33
Merchandise Presentation Techniques CCHHAAPPTTEERR 11
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Idea-Oriented Presentation
Style/Item Presentation
Color Organization
Price Lining
Vertical Merchandising
Tonnage Merchandising
large quantities of merchandise
displayed together
Frontal Presentation
display as much of the product as
possible to catch the customers eye

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Idea-Orientation Presentation CCHHAAPPTTEERR 11
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Present merchandise
based on a specific idea or
the image of the store
Encourage multiple
complementary purchases
Womens fashion
Furniture combined in room
settings
Sony Style mini-living rooms

Fifty percent of women get their ideas for clothes from store displays or
window shopping

17-35
Creating an Appealing Store Atmosphere CCHHAAPPTTEERR 11
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The design of an environment through visual

communications, lighting, colors, music, and scent to
stimulate customers perceptual and emotional responses
and ultimately to affect their purchase behavior

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Lighting CCHHAAPPTTEERR 11
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Highlight merchandise
Structure space and capture a mood
Energy efficient lighting
Downplay features

The McGraw-Hill Companies, Inc./Lars A. Niki, photographer

17-37
Color CCHHAAPPTTEERR 11
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Warm colors (red, gold,

yellow) produce emotional,
vibrant, hot, and active
responses
Cool colors (white, blue,
green) have a peaceful,
gentle, calming effect
Culturally bounded
French-Canadians respond
more to warm colors
Anglo-Canadians respond more
to cool colors
The McGraw-Hill Companies, Inc./Lars Niki, photographer

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Music CCHHAAPPTTEERR 11
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Control the pace of store traffic, create an image, and

attract or direct consumers attention
A mix of classical or soothing music encourage shoppers
to slow down, relax, and take a good look at the
merchandise
thus to stay longer and purchase more

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Music CCHHAAPPTTEERR 11
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J.C. Penney different music at different times of the day

Jazzy music in the morning for older shoppers
Adult contemporary music in the afternoon for 35-40
year old shoppers
U.S. firm Muzak supplies 400,000 shops, restaurants,
and hotels with songs tailed to reflect their identity

17-40
Scent CCHHAAPPTTEERR 11
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Has a positive impact on

impulse buying behavior
and customer satisfaction
Scents that are neutral
produce better
perceptions of the store
than no scent
Customers in scented
stores think they spent less
time in the store than The McGraw-Hill Companies, Inc./Gary He, photographer

subjects in unscented
stores
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How Exciting Should a Store Be? CCHHAAPPTTEERR 11
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Depends on the Customers Shopping Goals

Task-completion:
a simple atmosphere with slow music, dimmer lighting, and
blue/green colors
Fun:
an exciting atmosphere with fast music, bright lighting, and
red/yellow colors

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Web Site Design CCHHAAPPTTEERR 11
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Simplicity Matters
Getting Around Easy Navigation
Let Them See It
Example: Lands End My Virtual Model
Blend the Web Site with the Store
Prioritize

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Web Site Design CCHHAAPPTTEERR 11
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Type of Layout
When shopping on the Web, customer are interested
in speed, convenience, ease of navigation, not
necessarily fancy graphics
Checkout
Make the process clear and appear simple
Enclose the checkout process
Make the process navigable without loss of information
Reinforce trust in the checkout process
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Keywords CCHHAAPPTTEERR 11
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shrinkage An inventory reduction that is caused by shoplifting by employees or

customers, by merchandise being misplaced or damaged, or by poor
bookkeeping.
sales per linear foot A measure of space productivity used when most
merchandise is displayed on multiple shelves of long gondolas, such as in
grocery stores.
sales per square foot A measure of space productivity used by most retailers
since rent and land purchases are assessed on a per-square-foot basis.
impulse merchandise Products that are purchased by customers without prior
plans. These products are almost always located near the front of the store,
where theyre seen by everyone and may actually draw people into the store.
demand/destination area Department or area in a store in which demand for
the products or services offered is created before customers get to their
destination.
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