store layouts & planograms

Store Layout

“Shopper found dead in local store; cause of death – boredom”

COMPILED BY NAKUL PATEL, PGDIM, IM-19

STORE LAYOUT

• Store Image

• the overall perception the customer has of the store’s environment.

• Get customers into the store (market image).

• Space Productivity

• represents how effectively the retailer utilizes its space and is usually measured by sales per square foot of selling space or gross margin dollars per square foot of selling space

• Convert them into customers buying merchandise once inside the store (space productivity).


Store Layout – Store Image

• Serves a critical role in the store selection process

• Important criteria include cleanliness, labeled prices, accurate and pleasant checkout clerks, and well-stocked shelves

• The store itself makes the most significant and last impression


STORE LAYOUT – STORE PRODUCTIVITY

• The more merchandise customers are exposed to that is presented in an orderly manner, the more they tend to buy

• Retailers focusing more attention on in-store marketing – marketing dollars spent in the store, in the form of store design, merchandise presentation, visual displays, and in-store promotions, should lead to greater sales and profits (bottom line: it is easier to get a consumer in your store to buy more merchandise than planned than to get a new consumer to come into your store)


STORE LAYOUT – SPACE ALLOCATION

• Improving Space Productivity in Existing Stores

• Space Productivity Index is a ratio that compares the percentage of the store’s total

gross margin that a particular merchandise category generates to its percentage of total

store selling space used.


STORE LAYOUT – OBJECTIVE OF GOOD STORE DESIGN

• Design should:

• be consistent with image and strategy

• positively influence consumer behavior

• consider costs versus value

• be flexible

• recognize the needs of the everyone


STORE LAYOUT – THE TRADEOFF

Easy of locating merchandise for planned purchases

Exploration of store, impulse purchases


STORE LAYOUT – THE TRADEOFF(S)

• Ease of locating merchandise for planned purchases

• Aesthetics, space to shop comfortably

• Relaxed environment

v/s

• Exploration of store

• Impulse purchases

• Productivity of space

• Energy, excitement


STORE LAYOUT – TYPES OF FLOOR SPACE

• Back Room – receiving area, stockroom

• Department stores (50%)

• Small specialty and convenience stores (10%)

• General merchandise stores (15-20%)

• Offices and Other Functional Space – employee break room, store offices, cash office,

restrooms


STORE LAYOUT – TYPES OF FLOOR SPACE

• Aisles, Service Areas and Other Non-Selling Areas

• Moving shoppers through the store, dressing rooms, layaway areas, service desks,

customer service facilities

• Merchandise Space

• Floor

• Wall


STORE LAYOUT – CIRCULATION (TRAFFIC FLOW)

• Conflicting objectives:

• Ease of finding merchandise v/s varied and interesting layout

• Giving customers adequate space to shop v/s use expensive space productively


STORE LAYOUT - CIRCULATION

• Grid Layout –

• layout in which counters and fixtures are placed in long rows or “runs,” usually at

right angles, throughout the store.

• Linear design, checkerboard pattern.

• Vertical and horizontal aisles

• May have one main aisle and many secondary aisles.

• Efficient use of space

• Simple and predictable to navigate

• Focal points at aisle ends

• EX. Supermarkets



• Grid Design –



• Loop Layout

• type of store layout in which a major customer aisle begins at the entrance, loops

through the store, usually in the shape of a circle, square, arc rectangle, and then

returns the customer the front of the store.

• Major customer aisle(s) begins at entrance, loops through the store (usually in shape

of circle, square or rectangle) and returns customer to front of store

• Exposes customers to the greatest amount of merchandise

• Ex. SEASONAL SALES.



• Loop Layout –



• Free Flow Layout –

• Fixtures and merchandise grouped into free-flowing patterns on the sales floor – no defined traffic pattern

• Opposite of grid layout.

• Ease of customer movement.

• Must provide enough room between fixtures.

• Fixtures arranged in interesting formations

• Encourages browsing.

• Works best in small stores (under 5,000 square feet) in which customers wish to browse

• Works best when merchandise is of the same type, such as fashion apparel

• If there is a great variety of merchandise, fails to provide cues as to where one department stops and another starts



• Free Flow Layout –



• Spine Layout –

• Variation of grid, loop and free-form layouts

• Based on single main aisle running from the front to the back of the store

(transporting customers in both directions)

• On either side of spine, merchandise departments branch off toward the back or

side walls

• Heavily used by medium-sized specialty stores ranging from 2,000 – 10,000

square feet

• In fashion stores the spine is often subtly offset by a change in floor coloring or

surface and is not perceived as an aisle



• Spine Layout –


STORE LAYOUT – LOCATION OF DEPARTMENT

• Relative location advantages

• Impulse products

• Demand/destination areas

• Seasonal needs

• Physical characteristics of merchandise

• Adjacent departments


THREE PSYCHOLOGICAL FACTORS TO CONSIDER IN MERCHANDISING STORES

• Value/fashion image

• Trendy, exclusive, pricy v/s value-oriented

• Angles and Sightlines

• Customers view store at 45 degree angles from the path they travel as they move through the store

• Most stores set up at right angles because it’s easier and consumes less space

• Vertical color blocking

• Merchandise should be displayed in vertical bands of color wherever possible – will be viewed as rainbow of colors if each item displayed vertically by color

• Creates strong visual effect that shoppers are exposed to more merchandise (which increases sales)


VISUAL MERCHANDISING

• the artistic display of merchandise and theatrical props used as scene-setting decoration

in the store.

• Get `em coming and going. Escalators are a focal point of many stores. That makes

them ideal locations for promotional signs and for impulse items like perfume.

• Lead them to temptation. Department-store design incorporates a gauntlet of goodies

to stimulate impulse buys. Cosmetics, a store’s most profitable department, should

always be at the main entrance to the store.


VISUAL MERCHANDISING

• Its all in the display. When an item, such as a watch or a scarf, is displayed in a glass

case, it implies luxury. An item in a glass case with a lot of space around it implies real

luxury.

• Color is king. Retailers believe consumers are more apt to buy clothes that appear in

full size and color assortments.

• Suggestion positioning. Once the customer has already purchased one item, it’s

easier to sell an additional item. Thus apparel retailers strategically place impulse

buys like hair bows and costume jewelry by the cashier the same way supermarket

checkouts display candy and magazines.


Compiled by Nakul Patel, PGDIM, IM-19

STORE DESIGN

• Storefront Design

• Interior Design

• Lighting Design

• Sounds and Smells: Total Sensory Marketing


Spot The Difference


PLANOGRAM - OVERVIEW

• That’s the effect of planogram

• a diagram or model that indicates the placement of retail products on shelves in order to maximize sales

• provides details as to where a product should be placed on a shelf and how many faces that product should hold

• A planogram defines which product is placed in which area of a shelving unit

and with which quantity

• maximize the amount of merchandise on the shelf and the amount of sales by arranging in such a way that makes it appealing to the consumer while minimizing wasted space

• to make a section look more aesthetically appealing to the customer


PLANOGRAM – NEED

• To communicate how to set the merchandise.

• To ensure sufficient inventory levels on the shelf or display.

• To use space effectively whether floor, page or virtual.

• To facilitate communication of retailer's brand identity.

• To assist in the process of mapping a store (store mapping)


PLANOGRAM – RULES & THEORIES

• The rules and theories for the creation of a planogram are set under the term of

merchandising (any practice which contributes to the sale of products to a retail

consumer)

• Promotional Merchandising

• Trading Industry

• Retail Supply Chain

• Adult

• Kids

• Prop-Recplicas


PLANOGRAM – TARGETS/GOALS

• creation of an optimal visual product placement

• creation of an optimal commercial product placement


PLANOGRAM – VISUAL PRODUCT PLACEMENT

THEORIES FOR Visual Product Placement –

• horizontal product placement: to increase the concentration of a customer for a certain article, a multiple horizontal placement side by side of one product is applied. Different researches found that a minimum placement range between 15–30 cm of one single product is necessary to achieve an increase in customer advertence (depending on the customer distance from the unit).

• vertical product placement: a different stream with its follower is the vertical product

placement. Here one product is placed on more than one shelf level to achieve 15–30 cm placement space.


PLANOGRAM – VISUAL PRODUCT PLACEMENT

THEORIES FOR Visual Product Placement –

• block placement: products that have something in common are placed in a block (brands). This can be done side by side, on top of each other, centered, magnetized

• the related products or merchandise belonging to a similar family are stocked at one place together under one common umbrella


PLANOGRAM – COMMERCIAL PLACEMENT

• Two factors for the deciding the commercial placement of different products –

• Market share placement

• Margin placement

• Market Share Placement –

• collecting turnover data of all kind of products and calculate from this data the market share of a certain product in its market segment

• With the help of this data products can be selected which should appear in a shelving unit in a “A” location

• Margin Placement –

• influenced from the margin a product brings

• the higher the margin is of a product the better the location should be where it is placed


DESIGNING PLANOGRAM

• Planograms include shelf heights, product placements and the amount of facings

• Shelf heights depend on the size of the products and ease of reach for the client

• Product placement describes on which shelf and where on that shelf a product should be placed

• A facing is a row of products. Thus, if a product has two facings, there are two rows of that product on the shelf

• much better for a product to be eye level and have the most amounts of facings than to be on the floor and have one facing. It is important for the store to have its most profitable products to have the most facings and be eye level than to waste that space on a product that does not sell nor provide a good profit margin

• Use the dimensions of each product's packaging to determine the best placement configuration and the number of units to fit in the available space


Planogram – Benefits

• Satisfying customers with a better visual appeal

• Tighter inventory control and reduction of out-of-stocks

• Easier product replenishment for staff

• Better related product positioning

• Effective communication tool for staff-produced displays

• Assured product placement

• Improved sales

• Assign selling potential to every inch of retail space

• Build presentations using 3D views and sales analysis

• Produce gap analysis to understand lost opportunities

• Compare product distribution across multiple store


PLANOGRAM – SAMPLE MODELS


PLANOGRAM – CHANGING SEASONS


C O M P I L E D B Y N A K U L P A T E L , P G D I M , I M - 1 9

store layouts & planograms

Business