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5th Edition

PPT 18-1
Chapter 18

                                 Store Layout, Design
                                      and Visual
                                    Merchandising


McGraw-Hill/Irwin
PPT 18-2
Levy/Weitz: Retailing Management, 5/e   Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
Store Management



           Customer Service       Managing the Store




                    Layout, Design and
                    Visual Merchandising


PPT 18-3
REI’s Store Environment




PPT 18-4
Store Design Objectives

           • Consistent with retailers image and
             strategy
           • Positive influence on customer
             satisfaction and purchase behavior
           • Cost effective
           • Flexible
           • Meet needs of disabled

PPT 18-5
Tradeoff in Store Design


 Easy of locating
 merchandise for
 planned purchases



                               Exploration of
                               store, impulse
                               purchases


PPT 18-6
Types of Store Layouts



              • Grid
              • Racetrack
              • Free Form



PPT 18-7
Grid Layout
           Long gondolas in repetitive pattern.

           • Easy to locate merchandise

           • Does not encourage customers to explore store
              – Limited site lines to merchandise

           • Allows more merchandise to be displayed

           • Cost efficient

           Used in grocery, discount, and drug stores. Why?
PPT 18-8
Grid Store Layout

           Receiving & storage




                        Fruit
                                      Books, magazines, seasonal      Cart
                                      display                         area
                   Vegetables                 Checkouts

                                                                             Entrance
                                   Office &
                                   customer
                                    service
                                                               Exit
PPT 18-9
Racetrack Layout
            Loop with a major aisle that has access to
              departments and store’s multiple entrances.
            • Draws customers around the store.
            • Provide different site lines and encourage
              exploration, impulse buying
            • Used in department stores




PPT 18-10
JCPenney Racetrack Layout




PPT 18-11
Example of Race Track Layout




PPT 18-12
Free-Form (Boutique) Layout

            Fixtures and aisles arranged asymmetrically
            • Pleasant relaxing ambiance doesn’t come
              cheap – small store experience
            • Inefficient use of space
            • More susceptible to shoplifting – salespeople
              can not view adjacent spaces.
            Used in specialty stores and upscale department
             stores

PPT 18-13
Free-Form Layout

                          Storage, Receiving, Marketing




                                                                                                Hats and Handbags
                          Underwear                                         Dressing Rooms
            Stockings


                              Accessories




                                                                                    Tops
                                                       Checkout counter
            Casual Wear




                                                                                    Tops
                                Pants




                                                         Clearance




                                                                                                Skirts and Dresses
                                                           Items
            Jeans




                                             Feature                      Feature


                          Open Display Window                             Open Display Window

PPT 18-14
Example of Boutique Area




PPT 18-15
Display Areas

        Feature areas
            – End caps
            – Promotional aisle
            – Freestanding
              fixtures
            – Point-of-sale areas
            – Walls

PPT 18-16
Designing a Webpage:
              Lessons from Store Design

       • Simplicity matters
       • Getting around
       • Prioritize
       • Design layout based on what you want to
         accomplish
       • Follow the standards of the industry leaders



PPT 18-17
Space Planning

      Allocating floor/shelf space locating merchandise
        in store (or on website)
      Where should merchandise be displayed?
      How much space should be allocated to each
       category/item?
      How many items of each SKUs should be
       displayed?



PPT 18-18
Space Planning Considerations

      • Profitability of merchandise
      • Customer Buying considerations
            – Impulse products near front
            – Demand/Destination areas off the beaten path
      • Physical characteristics of product.
      • Complementary products should be adjacent
      • Sales rate
            – More units of faster selling merchandise need to be
              displayed
PPT 18-19
Prime Locations for Merchandise


            • Highly trafficked areas
              – Store entrances
              – Near checkout counter

            • Highly visible areas
              – End aisle
              – Displays




PPT 18-20
Special Considerations


       • Avoid the “butt-brush” effect.

       • Make merchandise accessible.

       • Allow a transition zone.




PPT 18-21
Visual Merchandising




PPT 18-22
Visual Merchandising




PPT 18-23
Visual Merchandising




PPT 18-24
Visual Merchandising




PPT 18-25
Visual Merchandising

• Visual Merchandising.


• Seven Colors Group




PPT 18-26
Financial Comparison Report for Existing & Proposed
               Salad Dressing Planogram


                                Gross
                               Margin           Sales  Unit Sales     Inventory
                Brand         Per Week        Per Week Per Week       Turnover

            Section: Salad Dressing current
            1. 7SEAS               $50.33       $273.68      222.00        35.52
            2. HV RANCH             26.01        165.13       90.80        22.59
            3. KENS STK             46.76        330.14      266.00        27.61
            4. KRAFT                59.83        336.42      238.00        23.48
            5. NWMN OW              32.63        186.06      114.00        34.87
            6. PRS CHOI             27.88        122.18       82.00        59.22
            7. WLD FRMS             20.80        109.85       65.00        45.07
            8. WSHBN              _102.76      __590.03   __431.00         25.73
            TOTALS                $367.00     $2,113.49    1,508.80        28.53




PPT 18-27
Financial Comparison Report for Existing
                & Proposed Salad Dressing Planogram


                                Gross
                               Margin           Sales     Unit Sales   Inventory
                Brand         Per Week        Per Week    Per Week     Turnover

            Section: Salad Dressing revised
            1. 7SEAS               $50.33      $273.68        222.00        35.52
            2. DUNNE                 6.97         46.20        44.00        26.00
            2. HV RANCH             26.01        165.13        90.80        22.59
            3. KENS STK             46.76        330.14       266.00        27.61
            4. KRAFT                58.40        336.42       229.00        27.13
            5. NWMN OW              32.63        186.06       114.00        34.87
            6. PRS CHOI             27.88        122.18        82.00        59.22
            7. WLD FRMS             20.80        109.85        65.00        45.07
            8. WSHBN              _102.76     __590.03     __431.00         25.73
            TOTALS                $367.54     $2,150.24     1,543.80        29.19


PPT 18-28
Financial Comparison Report for Existing & Proposed
               Salad Dressing Planogram

                            Gross
                           Margin        Sales     Unit Sales   Inventory
               Brand      Per Week     Per Week    Per Week     Turnover

            Net Change
            1. 7SEAS           $0.00       $0.00        0.00          0.00
            2. DUNNE            6.97       46.20       44.00         26.00
            2. HV RANCH        $0.00       $0.00        0.00          0.00
            3. KENS STK        $0.00       $0.00        0.00          0.00
            4. KRAFT         ($1.43)     ($9.45)       -9.00          3.64
            5. NWMN OW         $0.00       $0.00        0.00          0.00
            6. PRS CHOI        $0.00       $0.00        0.00          0.00
            7. WLD FRMS        $0.00       $0.00        0.00          0.00
            8. WSHBN           $0.00     _$0.00         0.00          0.00
            TOTALS             $5.54     $36.75        35.00          0.66



PPT 18-29
Evaluating Space Productivity


        Productivity ratios are output/input
            – Sales per square foot

            – Sales per linear foot

            – Gross or contribution margin per square foot




PPT 18-30
Merchandise
             Presentation Techniques

    • Idea-Oriented Presentation
    • Style/Item Presentation
    • Color Organization
    • Price Lining
    • Vertical Merchandising
    • Tonnage Merchandising
    • Frontal Presentation
PPT 18-31
Types of Apparel Display Fixtures




             Gondola             Straight Rack




   Rounder                               Four-Way
PPT 18-32
Straight Rack




PPT 18-33
Rounder




PPT 18-34
Four-Way




PPT 18-35
Gondola




PPT 18-36
Creating a Store Environment


            Color                       Lighting


                    Store Atmosphere



            Scent                      Music


PPT 18-37
Visual Communications

    • Coordinate signs and graphics with the store’s
      image.
    • Inform the customer.
    • Use signs and graphics as props.
    • Keep signs and graphics fresh.
    • Limit the copy of signs.
    • Use appropriate typefaces on signs
    • Create theatrical effects.
PPT 18-38
Lighting



       • Highlight merchandise.

       • Structure space and
            capture a mood.

       • Downplay features.




PPT 18-39

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Store layout, design and merchandising

  • 2. Chapter 18 Store Layout, Design and Visual Merchandising McGraw-Hill/Irwin PPT 18-2 Levy/Weitz: Retailing Management, 5/e Copyright © 2004 by The McGraw-Hill Companies, Inc. All rights reserved.
  • 3. Store Management Customer Service Managing the Store Layout, Design and Visual Merchandising PPT 18-3
  • 5. Store Design Objectives • Consistent with retailers image and strategy • Positive influence on customer satisfaction and purchase behavior • Cost effective • Flexible • Meet needs of disabled PPT 18-5
  • 6. Tradeoff in Store Design Easy of locating merchandise for planned purchases Exploration of store, impulse purchases PPT 18-6
  • 7. Types of Store Layouts • Grid • Racetrack • Free Form PPT 18-7
  • 8. Grid Layout Long gondolas in repetitive pattern. • Easy to locate merchandise • Does not encourage customers to explore store – Limited site lines to merchandise • Allows more merchandise to be displayed • Cost efficient Used in grocery, discount, and drug stores. Why? PPT 18-8
  • 9. Grid Store Layout Receiving & storage Fruit Books, magazines, seasonal Cart display area Vegetables Checkouts Entrance Office & customer service Exit PPT 18-9
  • 10. Racetrack Layout Loop with a major aisle that has access to departments and store’s multiple entrances. • Draws customers around the store. • Provide different site lines and encourage exploration, impulse buying • Used in department stores PPT 18-10
  • 12. Example of Race Track Layout PPT 18-12
  • 13. Free-Form (Boutique) Layout Fixtures and aisles arranged asymmetrically • Pleasant relaxing ambiance doesn’t come cheap – small store experience • Inefficient use of space • More susceptible to shoplifting – salespeople can not view adjacent spaces. Used in specialty stores and upscale department stores PPT 18-13
  • 14. Free-Form Layout Storage, Receiving, Marketing Hats and Handbags Underwear Dressing Rooms Stockings Accessories Tops Checkout counter Casual Wear Tops Pants Clearance Skirts and Dresses Items Jeans Feature Feature Open Display Window Open Display Window PPT 18-14
  • 15. Example of Boutique Area PPT 18-15
  • 16. Display Areas Feature areas – End caps – Promotional aisle – Freestanding fixtures – Point-of-sale areas – Walls PPT 18-16
  • 17. Designing a Webpage: Lessons from Store Design • Simplicity matters • Getting around • Prioritize • Design layout based on what you want to accomplish • Follow the standards of the industry leaders PPT 18-17
  • 18. Space Planning Allocating floor/shelf space locating merchandise in store (or on website) Where should merchandise be displayed? How much space should be allocated to each category/item? How many items of each SKUs should be displayed? PPT 18-18
  • 19. Space Planning Considerations • Profitability of merchandise • Customer Buying considerations – Impulse products near front – Demand/Destination areas off the beaten path • Physical characteristics of product. • Complementary products should be adjacent • Sales rate – More units of faster selling merchandise need to be displayed PPT 18-19
  • 20. Prime Locations for Merchandise • Highly trafficked areas – Store entrances – Near checkout counter • Highly visible areas – End aisle – Displays PPT 18-20
  • 21. Special Considerations • Avoid the “butt-brush” effect. • Make merchandise accessible. • Allow a transition zone. PPT 18-21
  • 26. Visual Merchandising • Visual Merchandising. • Seven Colors Group PPT 18-26
  • 27. Financial Comparison Report for Existing & Proposed Salad Dressing Planogram Gross Margin Sales Unit Sales Inventory Brand Per Week Per Week Per Week Turnover Section: Salad Dressing current 1. 7SEAS $50.33 $273.68 222.00 35.52 2. HV RANCH 26.01 165.13 90.80 22.59 3. KENS STK 46.76 330.14 266.00 27.61 4. KRAFT 59.83 336.42 238.00 23.48 5. NWMN OW 32.63 186.06 114.00 34.87 6. PRS CHOI 27.88 122.18 82.00 59.22 7. WLD FRMS 20.80 109.85 65.00 45.07 8. WSHBN _102.76 __590.03 __431.00 25.73 TOTALS $367.00 $2,113.49 1,508.80 28.53 PPT 18-27
  • 28. Financial Comparison Report for Existing & Proposed Salad Dressing Planogram Gross Margin Sales Unit Sales Inventory Brand Per Week Per Week Per Week Turnover Section: Salad Dressing revised 1. 7SEAS $50.33 $273.68 222.00 35.52 2. DUNNE 6.97 46.20 44.00 26.00 2. HV RANCH 26.01 165.13 90.80 22.59 3. KENS STK 46.76 330.14 266.00 27.61 4. KRAFT 58.40 336.42 229.00 27.13 5. NWMN OW 32.63 186.06 114.00 34.87 6. PRS CHOI 27.88 122.18 82.00 59.22 7. WLD FRMS 20.80 109.85 65.00 45.07 8. WSHBN _102.76 __590.03 __431.00 25.73 TOTALS $367.54 $2,150.24 1,543.80 29.19 PPT 18-28
  • 29. Financial Comparison Report for Existing & Proposed Salad Dressing Planogram Gross Margin Sales Unit Sales Inventory Brand Per Week Per Week Per Week Turnover Net Change 1. 7SEAS $0.00 $0.00 0.00 0.00 2. DUNNE 6.97 46.20 44.00 26.00 2. HV RANCH $0.00 $0.00 0.00 0.00 3. KENS STK $0.00 $0.00 0.00 0.00 4. KRAFT ($1.43) ($9.45) -9.00 3.64 5. NWMN OW $0.00 $0.00 0.00 0.00 6. PRS CHOI $0.00 $0.00 0.00 0.00 7. WLD FRMS $0.00 $0.00 0.00 0.00 8. WSHBN $0.00 _$0.00 0.00 0.00 TOTALS $5.54 $36.75 35.00 0.66 PPT 18-29
  • 30. Evaluating Space Productivity Productivity ratios are output/input – Sales per square foot – Sales per linear foot – Gross or contribution margin per square foot PPT 18-30
  • 31. Merchandise Presentation Techniques • Idea-Oriented Presentation • Style/Item Presentation • Color Organization • Price Lining • Vertical Merchandising • Tonnage Merchandising • Frontal Presentation PPT 18-31
  • 32. Types of Apparel Display Fixtures Gondola Straight Rack Rounder Four-Way PPT 18-32
  • 37. Creating a Store Environment Color Lighting Store Atmosphere Scent Music PPT 18-37
  • 38. Visual Communications • Coordinate signs and graphics with the store’s image. • Inform the customer. • Use signs and graphics as props. • Keep signs and graphics fresh. • Limit the copy of signs. • Use appropriate typefaces on signs • Create theatrical effects. PPT 18-38
  • 39. Lighting • Highlight merchandise. • Structure space and capture a mood. • Downplay features. PPT 18-39