STORE LAYOUT, DESIGN & VISUAL

MERCHANDISING
 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
 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
 Store Design objective
Implement the retailers strategy
Influence the customer buying behavior
Provide flexibility
control design and maintenance costs
meet legal requirements
 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
 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 .
 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
 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
STORE DESIGN
 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.
E.g 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
 Grid layout
Bakery

Electrical &
Fruits Electronics

Vegetables

Clothing

Carts
Checkouts

Exit Entrance
Office
Grid layout
 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. Not visually exciting design
Cost efficient, less wasted space, all customers not exposed to all of the
aisles are of same width. merchandise
Use of shelves- more merchandise on
sales floor.
Low cost standardized fixtures
Racetrack/loop layout
Racetrack/loop layout
 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
Customers forced to take
in multiple depts and
diff viewing angles.
facilitate impulse purchase.
Customers forced to take
diff viewing angles.
 Changing
Rooms Office

Display
Display
Free form layout

Checkout

Window Display
Free form layout
 Free form layout
Boutique layout, arranges fixtures and aisles in an
asymmetric pattern. Use in small specialty stores or
within depts of large stores
No well defined traffic pattern,
customers are not drawn
Provides an intimate and towards the store naturally.
relaxing environment that Personal selling becomes more
facilitates shopping and important . Layout sacrifices
browsing some retail storage and display
space to create a more spacious
environment
 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
 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.
 Signage and Graphics
Promotional signage: Signage displaying
special offers may be displayed in windows to
entice customers into the store.
 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
 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.
 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
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
 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
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
 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
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
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
End caps
displays located at the
end of aisle
products sales increase
dramatically.
Use for higher margin,
impulse merchandise
to communicate
promotional offer
Promotional aisle/area
Is a space to display
merchandise that is
being promoted
Walls

limited retail space, use

walls to store, display
and present a message
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
 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
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
 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
 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
 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
 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
 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.
 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