Retail Book Chap18

CHAPTER 18: STORE LAYOUT, DESIGN AND VISUAL MERCHANDISING INSTRUCTOR NOTES

ANNOTATED OUTLINE •

Recognizing the significant impact of store environment on shopping behavior on shopping behavior, retailers have devoted considerable resources to their store design and merchandise presentation.

I. Store Design Objectives

See PPT 18-4

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Pick a store the students know and have them evaluate the store based on these objectives.

When designing or redesigning a store, managers must meet five objectives.

See PPT 18-5

A. Store Design and Retail Strategy •

To meet the first objective, retail managers must define the target customer and then design a store that complements the customers' needs.

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Customers would find it hard to accurately judge value if the physical environment were inconsistent with merchandise or prices.

B. Influence on Consumer Buying Behavior •

To meet the second design objective of influencing customer buying decisions, retailers concentrate on store layout and space planning issues.

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The store design should: attract consumers to the store, enable them to easily locate merchandise of interest, keep them in the store for a long time, motivate them to make unplanned impulse purchases, and provide them with a satisfying shopping experience.

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Customers' purchasing behavior is also influenced, both positively and negatively, by the store's atmosphere.

C. Flexibility •

Store planners attempt to design stores with maximum flexibility. Flexibility can take

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See PPT 18-6

two forms: the ability to physically move store components and the ease with which components can be modified. •

Stores with better designs can respond to seasonal changes and renew themselves from an image perspective without the need for large-scale renovations.

D. Cost •

The fourth design objective is to consider the costs associated with each store design element versus the value received in terms of higher sales and profits.

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The best locations within a store are worth the most, so they're reserved for certain types of merchandise. Retailers develop maps called planograms that prescribe the location of merchandise based on profitability and other factors.

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When considering the atmospheric issues of store design, retailers must weigh the costs along with the strategy and customer attraction issues.

E. Legal Considerations •

A critical objective in any store design or redesign decision is to be in compliance with the 1990 Americans with Disabilities Act (ADA).

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Besides providing for a nondiscriminatory work environment for the disabled, the ADA, calls for "reasonable access" to merchandise and services in a retail store that was build before 1993. Stores built after 1993 must be fully accessible.

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Accessibility answers are not clear or easy; they are being considered on a case-by-case basis in federal courts around the United States.

See PPT 18-9 and 18-10

See PPT 18-8

F. Design Trade-Offs •

Ask students to identify a store that would be inaccessible to a disabled person.

A store design rarely achieves all of the

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design objectives described above. Managers need to make trade-offs among them. •

One common trade-off is between stimulating impulse purchases and making it easy to buy products.

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Another trade-off occurs between making the shopping environment interesting and entertaining and making merchandise easy for customers to find.

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One more trade-off is the balance between giving customers adequate space in which to shop and productively using the space for merchandise.

II. Store Design •

To design a good store layout, store designers must balance many objectives-objectives that often conflict.

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Ask students what stores seem to draw them around to view more merchandise than they expected to. Ask them if a store layout ever makes them feel too crowded.

A. Layouts See PPT 18-11

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One method of encouraging customer exploration is to present them with a layout that facilitates a specific traffic pattern.

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Another method of helping customers to move through the store is to provide interesting design elements.

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Today’s modern retailers use three general types of store layout design: grid, racetrack, and free-form. 1. Grid Layout See PPT 18-12 and 18-13

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The grid layout is best illustrated by most grocery and drug store operations. It contains long gondolas of merchandise and aisles in a repetitive pattern.

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The grid is not the most aesthetically pleasing arrangement, but it is very good for shopping trips in which customers need to move throughout the entire store and easily locate products they want to buy.

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The grid layout is also cost-efficient because space productivity is enhanced and fixtures are standardized.

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One problem with the grid layout is that customers typically aren’t exposed to all of the merchandise in the store.

Ask students what is the best types of stores for a grid design and why.

2. Racetrack Layout See PPT 18-14, 18-15 and, 18-16

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The racetrack layout (also known as a loop) is a type of store design that provides a major aisle to facilitate customer traffic, with access to the store's multiple entrances. This aisle loops through the store, providing access to all the departments.

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The racetrack design encourages impulse purchasing. 3. Free-Form Layout

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Ask students to give examples of different stores that have a "racetrack" design. What are the advantages and disadvantages?

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A free-form layout (also known as boutique layout) arranges fixtures and aisles asymmetrically. It is successfully used primarily in smaller specialty stores or within the departments of larger stores.

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In this relaxed environment, customers feel like they are in someone's home, which facilitates shopping and browsing.

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A pleasant atmosphere may be expensive due to expensive fixtures, higher occurrence of theft, and the sacrifice of storage and display space.

See PPT 18-17, 18-18, and 18-19 Ask students why upscale specialty stores often use a free-form design.

Ask students to discuss ways to enhance the effectiveness of a retailer’s signage.

B. Signage and Graphics •

Signage and graphics help customers locate specific products and departments, provide product information, and suggest items or See PPT 18-20 and 18-21 special purchases.

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Additionally, graphics, such as photo panels, can enhance the store’s image.

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Retailer’s visual communications are used to:

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Identify the location of merchandise

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Identify the types of products offered within a category

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Describe special offers to entice customers into the store

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Provide price and other information about a product at the point-of-sale

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Create moods that encourage customers to buy products See PPT 18-22

1. Digital Signage •

Many retailers are beginning to replace traditional signage with digital signage Ask students to develop a list of the benefits of systems. Digital signage are signs whose digital signage. visual content is delivered digitally through a centrally managed and controlled network and displayed on a television

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monitor or flat-panel screen. The content delivered can range from entertainment to price information. •

Digital signage provides a number of benefits over traditional signage for the retailer.

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See PPT 18-23

C. Feature Areas •

Feature areas are areas within a store designed to get the customer's attention.

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They include end caps, promotional aisles or areas, freestanding fixtures and mannequins, windows, point-of-sale areas, and walls. 1. Freestanding Displays

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Freestanding displays and mannequins located on aisles are designed primarily to get customers’ attention and bring them into a department.

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These fixtures often display and store the newest, most exiting merchandise in the department. 2. Cash Wraps Tell students that you know that none of them would pick up tabloids at the checkout stand because they are upscale, educated consumers. But, why do so many other people do so? (Because they are stuck at the point-of-sale and have nothing better to do.)

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Cash wraps, also known as point-ofpurchase (POP) counters or checkout areas, are places in the store where customers can purchase merchandise.

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These areas can be the most valuable piece of real estate in the store, because the customers often wait there for the transactions to be completed. 3. End Caps

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End caps are displays located at the end of the aisle.

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Due to their high visibility, end caps can also be used to feature special promotional items, like beer and potato chips before the Fourth of July. 4. Promotional Aisle or Area

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A promotional aisle or area is an aisle or area used to display merchandise that is being promoted.

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5. Walls •

Since retail space is often scarce and expensive, many retailers have successfully increased their ability to store extra stock, display merchandise, and creatively present a message by utilizing wall space. 6. Windows

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Although window displays are clearly external to the store, they can be an important component of the store layout.

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Properly used, windows can help draw customers into the store. They provide a visual message about the type of merchandise for sale in the store and the type of image the store wishes to portray. They can also be used to set the shopping mood for a season or holiday. A. Space Allocated to Merchandise Categories

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See PPT 18-24 and 18-25

Retailers consider four factors when deciding how much floor or shelf space to allocate to merchandise categories and brands. 1. Space Productivity

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A simple rule of thumb for allocating space is to allocate on the basis of merchandise sales.

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In practice, retailers should allocate space to a merchandise category based on its effect on the profitability of the entire store.

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Two commonly used measures of space productivity are: sales per square foot (for retailers that display most of their merchandise on freestanding fixtures) and sales per linear foot (for retailers displaying most merchandise on shelves).

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A more sophisticated productivity measure, such as gross margin per square foot would

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consider the profits generated by the merchandise, not just the sales. 2. Inventory Turnover •

Inventory affects space allocation in two ways.

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First, both inventory turnover and gross margin contribute to GMROI. Merchandise categories with higher inventory turnover merit more space than merchandise categories with lower inventory turnover.

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Second, the merchandise displayed on the shelf is depleted quicker for fast selling items with high inventory turnover so more space needs to be allocated to fast selling merchandise.

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3. Impact on Store Sales

See PPT 18-26

Retailers needs to consider the allocation impact on the entire store. The objective of space management is to maximize the productivity of the store, not just a particular merchandise category or department.

Ask students to consider situations in which the retailer might strategically want to “overallocate” space to certain merchandise categories.

4. Display Considerations •

Finally, the physical limitations of the store and its fixtures will necessarily affect space allocation. B. Location of Merchandise Categories and Design Elements

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The location of merchandise categories plays a role in how customers navigate through the store.

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By strategically placing impulse and demand/destination merchandise (products that customers have decided to buy before entering the store) throughout the store, retailers increase the chances that customers will shop the entire store and that their attention will be focused on the merchandise that the retailer is most

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See PPT 18-27 and 18-28

interested in selling. •

The retailer’s entry area is often referred to as the decompression zone because customers are making an adjustment to the new environment.

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Next, customers often turn right into the area referred to as the strike zone, a critical area because it creates the customers’ first impressions of the retailer.

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From here, the most heavily trafficked and viewed area is the right-hand side of the store. 1. Impulse Merchandise

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Impulse merchandise are products that customers purchase without prior plans, like fragrances, cosmetics and magazines.

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They are almost always located near the front of the store where they are seen by everyone and may actually draw people into the store. 2. Demand Merchandise

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Children's, expensive specialty goods, and furniture departments as well as customerservice areas like beauty salons, credit offices, and photography studios are usually located off the beaten path – in corners and on upper floors.

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These departments are known as demand/destination areas because demand for their products or services is created before customers get to their destination. Thus, they don't need prime locations. 3. Special Merchandise

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Some merchandise categories, for instance expensive, fragile items or highly personal items like lingerie, involve a buying process that is best accomplished in a lightly trafficked area.

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Ask students where they would expect to find the travel and/or beauty salon (in an out-of-the-way location).

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Categories like furniture and appliances that require large portions of floor space are often located in less desirable areas. 4. Adjacencies

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Ask a student what he/she purchased on their last trip to a drug store. Assuming other customers purchase a similar market basket, the store could group these categories together.

Retailers often cluster complementary products together to facilitate multiple purchases.

C. Location of Merchandise within a Category: The Use of Planograms •

To determine where merchandise should be located within a department, retailers of all types generate maps known as planograms.

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A planogram is a diagram created from photographs, computer output or artists’ renderings that illustrates exactly where every SKU should be placed.

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Electronic planogramming requires the user to input model numbers or UPC codes, product margins, turnover, sizes of product packaging or actual pictures of the packaging, and other pertinent information into the program. The computer plots the planogram based on the retailer's priorities.

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Planograms are also useful for merchandise that doesn't fit nicely on gondolas in a grocery or discount store.

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Recent advances in computer graphics and three-dimensional modeling allows planograms to be designed, tested with consumers, and changed, all in a “virtual” shopping environment.

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A productivity measure (the ratio of an output to an input) determines how effectively a retailer uses a resource.

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Most retailers measure the productivity of space on a sales per square foot basis since rent and land purchases are assessed on a per square foot basis. But sometimes it's more efficient to measure profitability using sales per linear foot. Sales per

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cubic foot may be most appropriate for stores like wholesale clubs that use multiple layers of merchandise. •

When allocating space to merchandise or a department, retail managers must consider the profit impact on all departments.

IV. Visual Merchandising •

Visual merchandising is the presentation of a store and its merchandise in ways that will attract the attention of potential customers.

A. Fixtures •

The primary purposes of fixtures are to efficiently hold and display merchandise. At the same time, they must help define areas of a store and encourage traffic flow.

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Fixtures come in an infinite variety of styles, colors, sizes, and textures, but only a few basic types are commonly used.

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For apparel, retailers utilize the straight rack, rounder, and four-way. The mainstay fixture for most other merchandise is the gondola.

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See PPT 18-29 and 18-30

The straight rack consists of a long pipe suspended with supports going to the floor or attached to a wall. See PPT 18-31

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A rounder (also known as a bulk or capacity fixture) is a round fixture that sits on a pedestal . Although smaller than the straight rack, it's designed to hold a maximum amount of merchandise.

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A four-way fixture (also known as a feature fixture) has two cross bars that sit perpendicular to each other on a pedestal, holds a large amount of merchandise, and allows the customer to view the entire garment.

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Gondolas are extremely versatile and used extensively in grocery and discount stores

See PPT 18-32

See PPT 18-33 and 18-34

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to display everything from canned foods to baseball gloves. See PPT 18-35

B. Presentation Techniques 1. Idea-Oriented Presentation •

Some retailers successfully use an ideaoriented presentation - a method of presenting merchandise based on a specific idea or image of the store.

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Individual items are grouped to show customers how the items could be used and combined.

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This approach encourages the customer to make multiple complementary purchases.

2. Style/Item Presentation •

Organizing stock by style or item is probably the most common presentation technique.

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Arranging items by size is a common method of organizing many types of merchandise, from nuts and bolts to apparel.

3. Color Presentation •

This is a bold merchandising technique where products, especially seasonal fashion goods, are displayed at the same place.

4. Price Lining •

Price lining is the technique when retailers offer a limited number of predetermined price points within a classification.

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Organizing merchandise in price categories is a strategy that helps customers easily find merchandise at the price they wish to pay.

5. Vertical Merchandising •

Another common way of organizing

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merchandise is vertical merchandising. Merchandise is presented vertically using walls and high gondolas. •

Customers shop much as they read a newspaper--from left to right, going down each column, top to bottom.

6. Tonnage Merchandising •

As the name implies, tonnage merchandising is a display technique in which large quantities of merchandise are displayed together to enhance and reinforce a store's price image.

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Using this display concept, the merchandise itself is the display.

7. Frontal Presentation •

Frontal presentation is a method of displaying merchandise in which the retailer exposes as much of the product as possible to catch the customer's eye.

V. Atmospherics •

See PPT 18-36 Atmospherics refers to the design of an environment via visual communications, lighting, colors, music, and scent to stimulate customers' perceptual and emotional responses and ultimately to affect their purchase behavior.

A. Lighting See PPT 18-37

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Lighting in a store is used to highlight merchandise, sculpt space, and capture a mood or feeling that enhances the store's image.

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Lighting can also be used to downplay less attractive features that cannot be changed. 1. Highlighting Merchandise

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A good lighting system helps create a sense of excitement in the store. At the same time, lighting must provide an accurate

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color rendition of the merchandise. •

Another key use of lighting is called popping the merchandise-- focusing spotlights on special feature area or items. Using lighting to focus on strategic pockets of merchandise trains shoppers' eyes on the merchandise and draws customers strategically through the store. 2. Mood Creation

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Traditionally, U.S. specialty and department stores have employed incandescent lighting sources to promote a warm and cozy ambience

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The European method of lighting can now be found in the most exclusive specialty stores of Rodeo Drive and Bal Harbor and even some department stores like Bloomingdale's. European stores have long favored high light levels, cool colors, and little contrast or accent lighting.

Ask students if they ever noticed dramatic mood changes in the ambiance of various departments in a department store, or going from one store to another in a mall.

3. Downplay Features •

Lighting is like makeup. It is used to highlight the good and hide less attractive features.

Lighting can hide errors and outmoded store designs.

B. Color •

The creative use of color can enhance a retailer’s image and help create a mood.

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Warm colors (red and yellow) are thought to attract customers and gain attention, yet they can be distracting and even unpleasant.

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In contrast, research has shown that cool colors, like blue or green, are relaxing, peaceful, calm, and pleasant.

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Thus, cool colors may be most effective for retailers selling anxiety-causing products, such as expensive shopping goods.

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Have students choose two very different stores, like a men’s and a women’s clothing store, and compare the color schemes.

C. Music Ask students if they are aware of stores that use music to their advantage/disadvantage.

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Music can either add or detract from a retailer's total atmospheric package.

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Unlike other atmospheric elements, however, music can be easily changed.

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Research has shown that the presence of music positively affects customers' attitudes toward the store.

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Retailers can also use music to impact customers' behavior. Music can control the pace of store traffic, create an image, and attract or direct consumers' attention.

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Changing music in different parts of a store can help alter a mood or appeal to different markets.

D. Scent Ask students if they notice a scent in a store.

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Many buying decisions are based on emotions, and smell has a large impact on our emotions.

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Research has shown that scent, in conjunction with music, has a positive impact on impulse buying behavior and customer satisfaction.

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Retailers must carefully plan the scents that they use, depending on their target market. Gender of the target customer should be taken into account in deciding on the intensity of the fragrance in a store.

E. How Exciting Should a Store Be? •

The impact of the store’s environment depends on the customer’s shopping goals. The two basic shopping goals are task completion and recreation.

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When customers are shopping to complete a task that they view as inherently unrewarding, they want to be in a soothing and calming environment.

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When customers are shopping for fun, they want to be in an exciting and engaging atmosphere.

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This means retailers must consider the typical shopping goals for their customers when designing their store environments.

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Ask students to describe retail web sites they consider to be well and poorly designed.

VI. Web Site Design •

Retailers should also consider design elements when creating their web sites.

A. Simplicity Matters •

It is not necessary to mention all merchandise available at the site on each page. It is better to present a limited selection tailored to the customer’s needs and then provide links to related merchandise and alternative assortments.

B. Getting Around •

The web site design should incorporate many local links internal to the site to help customers navigate easily.

C. Let Them See It •

The design should incorporate realistic colors and sharpness.

D. Blend the Web Site with the Store •

The design should visually reassure customers that they are going to have the same experience on the web site that they expect from the retailer’ stores.

E. Prioritize •

The site should be designed to advise the customer and guide them to the most important or promising choices, while ensuring their freedom to go anywhere that they please.

F. Type of Layout •

The design should strike a balance between keeping customers’ interests and providing them with a comfort level based on convention.

VII. Summary

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ANSWERS TO DISCUSSION QUESTIONS AND PROBLEMS 1.

One of the fastest growing sectors of the population is the over-60 age group. But these customers may have limitations in their vision, hearing, and movement. How can retailers develop store designs with the older population’s needs in mind? Student answers for this question will vary. Some ideas to address these problems are: use “cool” colors such as blue, violet, and green separately; use “warm” colors such as orange and red separately; use different colors on adjoining wall and floor surfaces so the change can be easily seen; avoid sharp contrasts in lighting; provide sufficient lighting for people to read signage, note safety hazards, and to see displays or an assortment of products; avoid glare through indirect lighting or the use of non-reflective surfaces; use contrasting colors in signage lettering and backgrounds; place signage at levels, angles and sizes that are quickly and easily discernible; have public address systems, video displays, computers with voice messages or warning alarm systems set at an appropriate volume and frequency; minimize the amount of confusing noises by using sound absorbing materials; do not use totally smooth and glossy flooring; provide a slightly textured and non-skid surface; do not use high pile carpeting; provide ramps in all places with stairs; provide sufficient aisle width to allow for the easy flow of customers whether walking or in wheelchairs; allot space for customer rest areas; provide shuttle service around large parking areas; install easy to use doors with well designed handles that would assist frail or arthritic hands to open the doors.

2.

Assume you have been hired as a consultant to assess a local discount store’s space productivity. What analytical tools would you use to assess the situation? What suggestions would you make to improve the store's space productivity? Most retailers measure the productivity of space on a sales per square foot basis since rent and land purchases are assessed on a per-square-foot basis. Under some circumstances, however, it is more efficient to measure profitability using sales per linear feet. For instance, in a grocery store, most of the merchandise is displayed on multiple shelves of long gondolas. Since all the shelves have approximately the same width, only the length, or linear dimension, is relevant. Sales per cubic feet may be most appropriate for stores like wholesale clubs that use multiple layers of merchandise. An equally useful output measure may be gross margin or contribution margin instead of sales. After all, for most decisions it is the amount of profit that is generated from an investment, not the sales that is really important. Both types of output measures can be used depending on the decision to be made. For instance, certain products are used to generate traffic in the store, e.g., bread in a supermarket. Therefore sales per square foot might be appropriate. Yet, for jewelry, gross margin might be more useful. Planograms are also useful for improving the space productivity of a store. Software is available to test different planograms and ask “what if” questions. It provides information on sales, profits, inventory, cubic feet, sales per cubic feet, profit per cubic feet, and inventory per cubic feet for the current space, the proposed gondola, and the net change between the two.

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With available prime retail space on the decline and its cost on the rise, retailers have looked for ways to improve the profitability of the space they currently have. Many retailers are improving their space productivity by getting greater use of cubic feet by making better use of walls and tall displays. Another method of improving space productivity is to downsize gondolas and racks. There is also a trend for retailers to reduce nonselling space.

3.

What are the different types of design that can be used in a store layout? Why are some stores more suited for a particular type of layout than others? The types of design used in the layout for a retail store are grid, boutique, and free-form. A grid layout contains long gondolas of merchandise and aisles in a repetitive pattern. This type of layout is good for shopping trips in which the customer plans to move throughout the entire store. This layout is also very cost efficient due to less wasted space and standardization of fixtures. The boutique layout places all departments on the “main aisle” by drawing customers through the store in a series of major and minor loops. This layout facilitates the goal of getting customers to visit multiple departments. The free-form layout arranges fixtures and aisles in an asymmetrical pattern with the goal of facilitating shopping and browsing. Some stores are more suited for a particular type of layout because of the merchandise they are selling and the space they have to display the merchandise. For example, if the store is very large, like a department store, the racetrack layout with access to boutiques often works best. This design allows the customer to be pulled through the store and visit multiple departments. However, if the floor space is small and the merchandise is store specific, a free form layout would most likely be best. Customers feel like they are at someone’s house, which facilitates shopping.

4.

Generally speaking, departments located near entrances, on major aisles, and on the main level of multilevel stores have the best profit-generating potential. What additional factors help to determine the location of departments? Give examples of each factor. Additional factors include: 1) merchandise of an impulse nature—batteries, gum, and candy are located in high traffic areas and at check outs; 2) demand/destination factors—gift wrap, rest rooms should be in places that are convenient yet at the same time not prime areas for sales; 3) specialty goods—sterling silver place settings, fur coats are located in discreet areas away from the main aisles; 4) adjacent departments—cookware next to fine china, athletic ready-to-wear next to sporting goods; and 5) physical characteristics of merchandise— lighting fixtures need to be next to an ample supply of electrical outlets so they can be demonstrated.

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5.

A department store is building an addition. The merchandise manager for furniture is trying to convince the vice president to allot this new space to the furniture department. The merchandise manager for men’s clothing is also trying to gain the space. What points should each manager use when presenting his or her rationale? The merchandise manager for furniture should emphasize that because furniture is generally very large, then it is only sensible that a large amount of space be allotted to it. He/she should try to convince the vice president that if given more space, then more merchandise can be displayed, hopefully resulting in additional sales. Since each sale in a furniture department is usually large, additional sales opportunities should be a strong argument. Depending on the margin, the merchandise manager for furniture may want to also emphasize this point if the margin is high. The merchandise manager for men’s should emphasize that the men’s department can make the most use of the space since it will be able to place a very large amount of merchandise in the space. In addition, since the margin in men’s tends to be high, the merchandise manager should make this a major part of the argument. He/she should also point out that the national trend for men’s wear in department stores is growing while the general trend for furniture in department stores has declined.

6.

As a manager for a large department store, you are responsible for ADA compliance. But your performance evaluation is based on bottom-line productivity. How would you make sure your store is accessible to people in wheelchairs and at the same time not lose any sales? The ADA requires that the disabled should be provided with "reasonable access" to merchandise and services in a retail store that was built before 1993 and that stores built after 1993 must be fully accessible. Full access and reasonable access call for a different store layout and design – one that has wider aisles, easier access to fixtures and better lighting and other features. Store managers, who are evaluated on bottom-line productivity, may be particularly concerned, since they may be evaluated on the basis of sales per square foot or sales per cubic foot. Store managers must carefully balance their compliance with the law in providing access to the disabled, particularly those who have to use wheelchairs, and their sales productivity. While many access features may have little impact on sales, such as providing building ramps, grab bars for entry and restroom access, others, such as wider ramps and easy accessibility to all sides of fixtures may cut down on the amount and types of merchandise on display. One way is to rationalize the store design using fixtures that maximize shelving space, while providing for wider aisles. Straight racks could hold more merchandise, and store employees could be trained to be on the lookout for customers in wheelchairs, so that they can service these customers better by pulling items of interest off the shelves. Another way would be to keep special displays and other promotional areas closer to the entrance or further away in the back, where more space is usually available. In short, store managers could realize better sales by providing enhanced services to the disabled, thereby overcoming the limitations of losing space to wider aisles. The net loss in productivity could be minimum, or even negligible, through rational planning of layout and displays. Moreover, the store could be viewed as a good corporate citizen and thus, may minimize risks of litigation since it is now in better compliance of the law.

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7.

Describe the ways in which designing a Web site is similar to and different from designing a store. One would think that the issues to be considered when designing a bricks and mortar store would be very different than the design issues surrounding a virtual store. Superficially, nothing could be more different. A web page is virtual and a store is physical. But good design components appear to transcend the physical world to the virtual world. They are similar in their design to make shipping simple. A good store design as well as a good website allows shoppers to move freely. They also are designed to let the customer get around and find what they need easily. They are different in that bricks and mortar stores want to make their stores different to stand out in a crowd. Virtual stores, however, strive to maintain a balance between keeping the customers interest and providing them with a comfort level based on convention. When making a decision about their website design, good web site designers’ look at the most visited sites on the Internet to see how they do it, and then replicate it.

8.

Why do supermarkets put candy, gum, and magazines at the front of the store? Over 80 percent of all buying decisions for candy, gum, and magazines are habitual in nature and completely unplanned. Since consumers often have to wait in lines in the front of the store to check out at supermarkets, it is assumed that the consumer will likely pick-up one of these articles conveniently located while waiting.

9.

What are the pros and cons for both centralized cash wraps and departmental cash wraps for stores such as JCPenney and Kohl’s? Cash wraps, the places in the store where customer complete their transactions, may be centralized or decentralized. Centralized cash wraps are typically used by discount retailers, extreme value retailers, and category killers. The advantages of the centralized location include increased customer convenience with a reduced staff, along with a reduction in customers complaints about waiting and slow service. The decentralized cash wrap has typically been used by department store retailers to provide a customer contact point off the main aisle, within each department. The advantage here is that customers may receive service on their transaction more quickly and without having to transport merchandise to another location. The customer may feel he or she is receiving a more “specialized” experience from an associate in a specific department. The downside of these decentralized cash wraps is the high level of staffing needed to adequately cover each cash wrap. If customers have to wait excessively or wander from one department to the next in search of an associate, all benefits of decentralization will be lost.

10.

Most department store anchors place the cosmetics counters at the ground floor mall entrance. Explain why this is the preferred location in lieu of other potential locations. The cosmetics and fragrance counters frequently generate impulse sales for the department store retailer. This ability to generate the unplanned, spontaneous sale makes the cosmetics counter logical fit for the prime location just inside the retailer’s entrance from the mall. Here, the cosmetics and fragrances are seen by everyone and perhaps draw additional consumers in from the mall itself.

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11.

If you were the manager of an apparel specialty store targeting men and women, how would you use information about sales per square foot for the various merchandise categories listed below when making merchandise location decisions within the retail space?

ICSS Research – Monthly Merchandise Index, June 2004 Non-Anchor Mall Tenants Category

Sales per Square Foot

Women’s apparel

$25

Women’s accessories

$47

Men’s apparel

$25

Children’s apparel

$23

Women’s shoes

$34

Men’s shoes

$39

Children’s shoes

$27

The manager of the specialty store would use the chart as a starting point to determine merchandise locations. Based on the sales per square foot figures here, students might suggest placement of women’s accessories and men’s and women’s shoes in the most trafficked locations given their higher sales per square foot figures. Students should also recognize that the retailer’s goals for allocating space to merchandise categories is to maximize potential of the store as a whole. Other considerations should come into play in addition to sales per square foot including: impact on store sales, inventory turnover, and display considerations.

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ADDITIONAL ASSIGNMENTS AND EXERCISES Exercise 18-1 Mature Approach to Store Design – Reading Assignment Please read the following article and think about a supermarket where you like to shop and answer the questions below. Be prepared to discuss in class. McLearon, Nadine. “Taking a mature approach to design: As the number of older Americans rises, so too should retailers’ awareness on their special needs.” Progressive Grocer, January 1, 2002. (Business & Company Resource Center)

1. Why is it important to consider the needs of “senior shoppers” when planning store layout and design?

2. What design features are beneficial for this segment of the population?

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Exercise 18-1 with Answers Mature Approach to Store Design – Reading Assignment Please read the following article and think about a supermarket where you like to shop and answer the questions below. Be prepared to discuss in class. McLearon, Nadine. “Taking a mature approach to design: As the number of older Americans rises, so too should retailers’ awareness on their special needs.” Progressive Grocer, January 1, 2002. (Business & Company Resource Center) 1. Why is it important to consider the needs of “senior shoppers” when planning store layout and design? -

The over 60-age group is one of the fastest growing sectors of the population They are a wealthy group These customers may have limitations concerning vision, hearing and movement Baby boomers are reaching retirement age Subtle changes in store design will capture this segment’s business Accommodating mature shoppers benefits all customers regardless of age

2. What design features are beneficial for this segment of the population? -

Accessible width aisles for walkers and wheel chairs Less cluttered aisles that are easy to navigate Rest area mid-store Seating at checkout and other store locations Installing non-slip floors with low-shine wax finish Using easy to read signs Light font and dark background on signs Store lighting that minimizes glare and reaches shelving Providing ramps and other need access, such as grab bars Having a pharmacy and other departments that will draw seniors into the store

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