part1

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 . Mkt
research customers do not walk down one aisle and up
the next. Park at the end of aisle-walk partway to pick
the product and return to the cart. Hence puts its best
selling brands at the middle of the aisle

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

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.
Eg 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 &
Electronics

Fruits

Vegetables

Clothing

Carts

Checkouts
Office

Exit

Entrance

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
customers not exposed to all of
space, all aisles are of same
the merchandise
width.
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
the racetrack
Facilitateseach
the dept
goalbordering
of

getting customers to
see the merchandise
available in multiple
depts and facilitate
impulse purchase.
Customers forced to
take diff viewing
angles.

Customers forced to
take diff viewing
angles.

Office

Display

Display

Window Display

Checkout

Changing
Rooms

Free form layout

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

Provides an intimate and

relaxing environment that
facilitates shopping and
browsing

No well defined traffic

pattern, customers are not
drawn towards the store
naturally. Personal selling
becomes more important .
Layout sacrifices 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 turnovershould 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