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Retail Store Design Using QFD PDF
Retail Store Design Using QFD PDF
As a project assignment of
OPERATIONS MANAGEMENT PAPER
MBA (PT) PART I SEM II
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ACKNOWLEDGMENT
We would like to express our greatest gratitude to the people who have helped and supported us
throughout our project study.
First of all, we would like to thank our survey mentor Mr. Siddhant Sahu, Research Analyst of
LIGANOVA. He has been a phenomenal help in getting our survey done. He has also provided us
with the data that was helpful for our project study.
Second, a special thank of ours goes to our family who allowed the team members to squeeze out
enough time to complete this robust study.
Last, we would like to thank our professor, Dr. Debadyuti Das, for providing us with the
opportunity to work on this project.
GAUTAM ACHARYA
GOPAL YADAV
HARJOT SINGH
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TABLE OF CONTENTS
ABSTRACT 2
ACKNOWLEDGMENT 3
TABLE OF CONTENTS 4
INTRODUCTION 5
THEORETICAL BACKGROUND 5
EMPIRICAL STUDY 7
OBJECTIVES OF THE STUDY 7
METHODOLOGY OF THE STUDY 7
STAGE I: SURVEY OF STORES 8
STORE 1: CONNAUGHT PLACE, NEW DELHI 9
STORE 2: CONNAUGHT PLACE, NEW DELHI 11
STORE 3: SELECT CITY WALK, SAKET, NEW DELHI 13
STORE 4: SOUTH EX I, NEW DELHI 15
STORE 5: SOUTH EX I, NEW DELHI 17
CONCLUSION 24
RELATIVE RANKING OF QUALITY CHARACTERISTICS (HOWs) 24
STRONG POSITIVE CORRELATED PAIRS OF QUALITY CHARACTERISTICS (HOWs) 25
POSITIVE CORRELATED PAIRS OF QUALITY CHARACTERISTICS (HOWs) 25
RECOMMENDATIONS 26
WINDOWS DISPLAY CAMPAIGN 26
VISUAL MERCHANDISING 26
INSTORE COMMUNICATION AND STORE CONCEPT 27
OVERALL APPROACH 27
WORKS CITED 28
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INTRODUCTION
The focus of Indian retail chains has been shifting from domestic competition to foreign
competition. As Government mulls over foreign direct investment in Indian retail industry, existing
big players of Indian retail industry are getting jittery and upgrading their own retail stores’
experience for the customer. In this sturdy study, the authors have executed an empirical field
study using QFD on fashion and lifestyle stores of Raymonds in New Delhi, India.
THEORETICAL BACKGROUND
Although India has emerged as one of the world’s most attractive markets, the country is grappling
with critical infrastructure and policy issues. India is currently facing the world’s most dynamic
combination, of highly informed and demanding consumers on one hand, and of rapid increasing
consumption levels across various retail product categories and geographies on the other.
The Indian retail sector is at an inflection point, with organized retail poised for an approximately
35 per cent compounded annual growth (CAGR) for the next few years. The valuation of Indian
retail is USD 320 billion, which is relatively small by global standards (Kearney).
The Indian retail sector is an interesting proposition from management point of view. Along with
effervescent atmosphere, consumer behaviors are changing quickly. A brief of today’s consumer
buying habit is given below (LIGANOVA, 2010):
80% of the young consumers intend to buy a BRANDed item, not only a product.
95% of consumers make their purchase decision at the point of sale (POS).
Only 30% of the consumers with purchase intention focus on a certain brand
Digital natives are growing up: A modern information society, globally connected and up to
date 24X7, base their decisions on recommendations from their society.
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This has led to a scenario where competition has increased many fold, retail landscape is changing
rapidly and existing brands and retailers are under pressure. This interesting mix has attracted the
authors’ team to work on Raymond’s fashion and lifestyle retail stores that have young consumers
as their target.
Raymond group has been one of the most prominent business houses in Indian fashion and
lifestyle retailing. The group has been operating since 1925. It owns prestigious award winning
brands such as Raymond, Park Avenue, Colorplus, and Parx. With increased competition, the
Raymond group is aggressively pursuing to capitalize on its historical head start over new entrants
in Indian fashion and lifestyle retail business with an expansion plan to open 289 stores by the end
of 2011 (Raymond).
The group’s model has many challenges to overcome before becoming competitive to the
standardized and successful model of world’s big retailers. One of the main roadblocks to Raymond
group’s aim to improve consumer experience is layout design of its retail stores.
The layout design of a retail store is very crucial for the success of a retail store. A well designed
store could improve visibility of brand DNA, communicate consistent brand message, and create an
aura of brand experience in the store. This translates into an overall improvement of consumer
experience of the store.
The Quality Function Deployment (QFD) has been exclusively used by industry managers to study
and examine the trends, impacts and implications of the structural changes taking place in retail
sector, balancing customer needs and working of facility layout most suited for its stores.
The alluring management challenges along with authors’ responsibility to complete a project study
on “The design of a Retail store by employing Quality Function Deployment (QFD)”as part of an
assignment for the completion of Operations Management paper of Master of Business
Administration (MBA) program, provided the authors with an excellent opportunity to conduct an
empirical study highlighting the importance of layout design of retail stores.
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EMPIRICAL STUDY
The empirical data is necessary to substantiate the findings of a study. The objectives and
methodology of the study are described in this section.
1. To identify the Demanded Qualities and Quality Characteristics for a system that would
meet the customer requirements
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mentioned attributes. Finally, a prioritized list of attributes as per the QFD analysis is prepared.
This list would help in structuring and developing the design of retail store to build a brand
consciousness among consumers and enhance the overall retail experience.
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The findings of the surveys for five stores are given below:
FINDINGS
Store data sheet reports poor performance because the store was under construction
Window display was very poor, shirts and trousers were kept on window floor
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This store is the most profitable store of New Delhi
Made to measure is missed out in the store because of wrong store layout
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STORE 2: CONNAUGHT PLACE, NEW DELHI
TYPE: Hi Street, Franchise Owned store CONVERSION: 50%
WALK INS: Weekday 40 Weekend 70 STORE SIZE: 2200 sq ft
AVG. SALE (INR): Weekday 80,000 Weekend 150,000 STAFF: 12
AGE: 25 years old
FINDINGS:
Sale is in proportion of 65% fabric and 35% apparel
Only received 30 pieces out of 220 booked for women collection this season
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STORE 3: SELECT CITY WALK, SAKET, NEW DELHI
TYPE: Hi street Store, Company Owned CONVERSION: 60%
WALK INS: Weekday 70-80 Weekend 125-130 STORE SIZE: 5200 Sq feet
AVG. SALE (INR): Weekday 175,000 Weekend 250,000 STAFF: 15
AGE: 2 years old
FINDINGS
Sale display – done according to sizes. Brands mixed in sale
Same display look used across the whole store – not exciting
Folded shirt quantity – 3 shirts always in store promotions – Art exhibition/display within
the store – interesting MTM presentation – good and effective
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STORE 4: SOUTH EX I, NEW DELHI
TYPE: Company Owned CONVERSION: 25%
WALK INS: Weekday 70-80 Weekend 125-130 STORE SIZE: 2,000 Sq feet
AVG SALE (INR): Weekday 50,000 Weekend 200,000 STAFF: 14
FINDINGS
Lots of empty space in the entire store
Display according to sizes due to sale season, no signage however to show this
Store sells the most expensive chairman collection fabric as well. (240 counts)
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STORE 5: SOUTH EX I, NEW DELHI
TYPE: Franchise Owned CONVERSION: Not estimated
WALK INS: Weekday 30-40 Weekend 70-80 STORE SIZE: 3,000 Sq feet
AVG SALE (INR): Weekday 65000 Weekend 250000 STAFF: 8
FINDINGS
Brand wise and style size distribution of suits in non sale area
Fabrics are always displayed in cold white light. Apparel in warm yellow light within the
same store
Communication within the mall needed to increase sales – says Store Manager
Weekend offer by Van Heusen was very successful in the mall because of their within mall
publicity and offering - says Store Manager
Park avenue should be moved towards window and kids should go back
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Changing room placement is not proper, they block the view of the brands kept at the back
Only once you enter the store then you realize that there are more brands inside
Would like to have a standard smell within the store – says Store Manager
Connaught
Company
place, 1700 13 70 100000 120 175000 25% 850000 65385 500
Run
Delhi
Connaught
place, Franchise 2200 12 40 80000 70 150000 50% 700000 58333 318
Delhi
Select City
Company
Walk, 5200 15 70-80 175000 125-130 250000 60% 1375000 91667 264
Run
Delhi
South Ex I, Company
2000 14 70-80 50000 125-130 200000 25% 650000 46430 325
Delhi Run
South Ex I,
Franchise 3000 8 30-40 65000 70-80 250000 - 825000 103125 275
Delhi
BEST LOW
RESULTS PERFORMANCE
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STAGE 2: DEMANDED QUALITIES & QUALITY CHARACTERISTICS
The above findings were analyzed meticulously to arrive at lists of 10 broad demanded qualities
and 15 broad quality characteristics. The lists are given below:
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STAGE 3: QUALITY FUNCTION DEPLOYMENT ANALYSIS
Developed by Mizuno and Akao, the Quality Function Deployment (QFD) Technique is a structured
approach for integrating the “voice of the customer” into both the product or service development
process. The purpose is to ensure that customer requirements are factored into every aspect of
the process. Listening to and understanding the customer is the central feature of QFD (Stevenson).
The exterior walls on the left of the QFD diagram represent the Demanded Qualities (WHATs), the
customer requirements. The ceiling of the house represents the Quality Characteristics (HOWs),
the functional requirements. The rows, representing the Demanded Qualities, and the columns,
representing the Quality Characteristics, cut across each other, creating the cells or interior walls of
the house, which represent the relationship between the items of the ‘Demanded Qualities’ and
the items of the ‘Quality Characteristics’. The authors have inculcated their Demanded Qualities
and Quality Characteristics lists in QFD Chart (Figure 1).
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Numeric relative importance scores to the various customer requirements, from the lowest to the
highest, on a scale from 1 to 3, are assigned. The authors expressed, in numeric values, the strong-
moderate-weak relationship between the demanded qualities (WHATs) and the quality
characteristics (HOWs), on a scale of 9, 3, and 1. After this, scores for each of the columns was
computed. The absolute values were computed for each column, and the respective quality
characteristics (HOWs) were then ranked relatively (Figure 2).
After an integrative process that focuses on first establishing relationships between the Demanded
Qualities (WHATs or customer requirements) and the Quality Characteristics (HOWs or
representing the design characteristics), the next stage is to relate the quality characteristics
themselves (roof of the house), arriving finally at a set of design characteristics to best satisfy the
customer requirements (Figure 3).
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FIGURE 3: ROOF OF THE HOUSE
A correlation analysis was done to identify the interrelationship between the different design
characteristics and the correlated pairs were identified (QFDonline.com).
The objective of QFD is to understand customer needs, prioritizing the design characteristics in an
order that most effectively meets these needs; and then to design a product or a service system to
ensure customer satisfaction.
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FIGURE 4: COMPLETE QFD ANALYSIS DIAGRAM
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CONCLUSION
After analyzing the QFD, the authors have arrived at the following conclusions:
III Simple and unambiguous purchase transaction and ease of billing 10.8
Clear vision and position in regards to customer tailoring and ready to 3.6
XI
wear section
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STRONG POSITIVE CORRELATED PAIRS OF QUALITY CHARACTERISTICS (HOWs)
Price signage/differentiation AND Ease of navigation and search of brands
Price signage/differentiation AND Simple and unambiguous purchase transaction and ease of billing
Easy accessibility of products and services AND Ease of navigation and search of brands
Easy accessibility of products and services AND Holistic interior designing of the store
Easy accessibility of products and services AND Merchandising and Visual standard guidelines
Sufficient number of trial rooms AND Holistic interior designing of the store
Simple and unambiguous purchase transaction and ease of billing AND Simple and unambiguous
purchase transaction and ease of billing
Ease of navigation and search of brands AND Holistic interior designing of the store
Ease of navigation and search of brands AND Merchandising and Visual standard guidelines
Ease of navigation and search of brands AND Highlight product placements within the brands
Holistic interior designing of the store AND Separate place for kids play room
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RECOMMENDATIONS
Along with first hand ground level knowledge of retail business and the analysis of QFD, the
authors mark out following recommendations for designing a retail store.
VISUAL MERCHANDISING
A new generic basic visual merchandising & marketing guideline is required. The Guideline needs
to cover all important Visual Merchandising aspects on an up to date level.
It needs to be split in 2 parts: Franchise and Own Retail
Basics VM rules ( including Basic Product Placement within the various BrandsWindow
decoration rule
Store layout segmentation and Brand placement
Customer navigation ( Branding & Signage's)
Highlight Product Placement within the various Brands
Product Rotation on floor within the various Brands
Product Presentation within Brands
Price signage
Store Fixture explanation
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End of season sales rules
Customer POS activation tools for the various Brands
Training & Education program
Fabric / Tailoring section guidelines
OVERALL APPROACH
Implement “THE IDEAL STORE CONCEPT” where all the above recommendations can be
implemented and tested.
The IDEAL STORE CONCEPT needs to have the following rough criteria for the conception:
Achieve Brand Position and Objectives within the next few years to increase awareness
about all the brands of the company and their respective positioning
Sufficient number of sales representatives for giving personal attention to each customer
Location of store should be chosen carefully to ease the accessibility of the store and
availability of the parking space
Holistic interior designing of the store with crèche and trial rooms
Adapt the needs based on your customer target and demand
Include the new Generic Visual Merchandising Guideline and In Store Communication
Based on the season, implement a Generic Window System
Monthly window updates should be easily produced and implemented and each store
should have the same standard
Clear vision and position in regards to Customs Tailoring & ready To Wear Brands
Unified look and feel
Simplification of themes in regards to design / adaptation / production and implementation
Better control & planning of the Budget allocation to the monthly updates/ changes
Integrate all important learning's generated from the experience in retail field
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WORKS CITED
Kearney, G. M. Retail in India: Getting organized to drive growth. Confederation of Indian Industry (CII).
LIGANOVA, A. e. (2010).
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