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Store Layout Design and Visual Merchandising

Session: 13 Prof: Yasmin

Have you ever wondered why a customer goes all the way to rhythm house, planet M to buy a music CD? Retailers should consider the impact of various physical and psychological factors on customer behavior and store functions including employee performance

Creating a store image

Is one of the most powerful tool for drawing customers towards the store, and satisfying them Its a difficult task The various stimuli that create a store image are physical facility, its location, merchandise offered and services provided, the pricing policies and the promotional activities 3

Creating a store image

The following factors contribute to the overall store image
Quality of merchandise, assortment Advertising, external attractiveness, salesmanship and fashionability Convenience of location, shopping experience, ease of transaction, clarity of message Cleanliness of premises, credit facilities, free space inside and outside the store 4

Creating a store image

Operational efficiency, physical and technological factors Design, ambience and social factors

The exterior and interior design of a store are some of the key determinants of the retailers image

Store Location
Location decisions cannot be changed once the store has been established Has an effect on the business life cycle Strategic advantage which competitors cannot copy or imitate easily

Store Location
Criteria to consider include

size and traits Competition Transportation access Parking availability Nature of nearby stores Property costs Length of agreement Legal restrictions

Choosing a Store Location

Step 1: Evaluate alternate geographic (trading) areas in terms of residents and existing retailers
Step 2: Determine whether to locate as an isolated store or in a planned shopping center Step 3: Select the location type Step 4: Analyze alternate sites contained in the specific retail location type

Trading-Area Analysis
A trading area is a geographic area containing the customers of a particular firm or group of firms for specific goods or services

Trade Area Analysis

Size and shape of trade areas
Primary, secondary and fringe Store type (parasite store) Store size Merchandise type Location of competition(inter & intra store competition) Housing patterns Travel time


The Trading Areas of Current and Proposed Outlets

The Segments of a Trading Area

The Size and Shape of Trading Areas

Primary trading area - 50-80% of a stores customers Secondary trading area - 15-25% of a stores customers Fringe trading area - all remaining customers

Trading Areas and Store Type

Largest Department stores Supermarkets TRADING AREAS Apparel stores Gift stores Smallest Convenience stores

Factors affecting store location

Demographics Proximity to supply sources Economic base Competition Store locations and its availability Regulations

Chief Factors to Consider in Evaluating Retail Trading Areas

Population Size and Characteristics
Total size and density Age distribution Average educational level Percentage of residents owning homes Total disposable income Per capita disposable income Occupation distribution Trends

Chief Factors to Consider in Evaluating Retail Trading Areas

Availability of Labor
Management Management trainee Clerical

Chief Factors to Consider in Evaluating Retail Trading Areas

Closeness to Sources of Supply
Delivery costs Timeliness Number of manufacturers Number of wholesalers Availability of product lines Reliability of product lines

Chief Factors to Consider in Evaluating Retail Trading Areas

Competitive Situation
Number and size of existing competition Evaluation of competitor strengths and weaknesses Short-run and longrun outlook Level of saturation

Chief Factors to Consider in Evaluating Retail Trading Areas

Availability of Store Locations
Number and type of store locations Access to transportation Owning versus leasing opportunities Zoning restrictions Costs

Chief Factors to Consider in Evaluating Retail Trading Areas

Taxes Licensing Operations Minimum wages Zoning

Site Selection
Types of Locations The isolated Store
: A freestanding retail outlet located on either a highway

or a street. There are no adjacent retailers with which this type of store shared traffic.

The advantage of this type of retail location

There is no competition

Rental costs are relatively low

There is flexibility

The features of this type of retail location

Isolation is good for stores involved in one-step or convenience shopping
Better road and traffic visibility is possible Facilities can be adapted to individual specifications Easy parking can be arranged Cost reduction are possible, leading to lower prices Initial customers may be difficult to attract Many people like variety of shopping

The Unplanned Business District

1. :

Central Business District

The hub of retailing in a city. It is the largest shopping area in that city and is synonymous with the term downtown
Some strengths of the CBD CBD
Excellent goods/service assortment
Access to public transportation Variety of store types and positioning suburbs strategies within one area Wide range of customer services High level of pedestrian traffic Many aging retail facilities Declining condition of some central cities relative to their suburbs Nearness to commercial and social facilities cities Relatively poor image of central

The inherent weakness of the

Inadequate parking
Traffic and delivery congestion Travel time for those living in the

The Unplanned Business District

2. Secondary Business District : an unplanned shopping area in a city or town that is usually bounded by the intersection of two major streets.
3. Neighborhood Business District: an unplanned shopping area that appeals to the convenience shopping and service needs of a single residential area. 4. String: an unplanned shopping area comprising a group of retail stores, often with similar or compatible product lines, located along a street or highway.

The Planned Shopping Center

The planned shopping center consists of a group of architecturally unified commercial establishments built on a site that is centrally owned or managed, designed and operated as a unit, based on balanced tenancy, and surrounded by parking facilities.

The Planned Shopping Center

The planned shopping center has several positive attributes:
Well rounded good s and services assortment based on longrange planning Strong suburban population Interest in one-stop, family shopping Cooperative planning and sharing of common images Creation of distinctive , but unified, shopping center images Maximization of pedestrian traffic for individual stores Access to highways and availability of parking for consumers

More appealing than city shopping for some people

Generally lower rent and taxes than CBD stores Generally lower theft rates than CBD stores Popularity of malls

The Planned Shopping Center

-Regional Shopping Center
A large, planned shopping facility appealing to geographically dispersed market. Becoming the social, cultural, and vocational focal point of an entire suburban area. Frequently, Being used as a town plaza, a meeting place. One newer derivative form of regional center, the megamall

The Planned Shopping Center

Community Shopping Center: A moderatesized, planned shopping facility with a branch department store, a variety store, or category killer store, in addition to several smaller stores. It offers a moderate assortment of both shopping and convenience- oriented goods and services to consumers from one or more nearby, well populated, residential areas. Power center

Neighborhood Shopping Center: A facility,

with the largest store being a supermarket or a drugstore

Location and Site Evaluation

Location and Site Evaluation Checklist
Rate each the following criteria on a scale of 1 to 10, with I being excellent and 10 being poor

Pedestrian Traffic
Vehicular Traffic

Number of people / Type of people

Number of vehicles / Type of vehicles / Traffic congestion Number and quality of parking spots Distance to store / Availability of employee parking Availability of mass transit Access from major highways / Ease of Deliveries Number and size of stores / Affinity / Retail balance

Parking Facilities

Transportation Store Composition


Location and Site Evaluation

Location and Site Evaluation Checklist
Rate each the following criteria on a scale of 1 to 10, with I being excellent and 10 being poor

Specific Site

Visibility / Placement in the location / Size and shape of the lot Size and shape of the building / Condition and age of the lot and building Ownership or leasing terms / Operations and maintenance costs Taxes/ Zoning restrictions / Voluntary regulations General location / Specific site

Terms of Occupancy

Overall Retailing


Creating a buying environment

An atmosphere that would boost the customers buying spirits Customers attracted to a safe, attractive and comfortable shopping environment A buying atmosphere can be effective only if it appeals to the five senses of the customer- sight, audibility, smell, touch and taste 32

Store Exteriors
First impression of a customer about a store is formed by its exteriors They play a vital role in attracting new customers and retaining the existing ones The exterior of a store includes its sign board, its entrance, windows, lighting and the color of the building


Store Exteriors
Can convey various types of images to its target customers- conservative, trendy, rich, discount etc Modular Structure: a single piece of rectangular or a square structure that is attached to many other stores Prefabricated Structure: an external frame that is built in a factory and assembled at a store 35

Store Exteriors
Prototype Structure: the exterior of all the stores of a retailer are the same, to maintain consistency, adopted by most of the chain retailers Recessed Structure: a store where the customers have to walk in a small distance to see the exteriors

Store Exteriors
Distinct Structure: a unique structure of the building for instance circular, oval or semi circular Several other ways in which a retailer can enhance the store image: by creating fountains, lawns, benches and plants

Store Exteriors
1. Marquee: A roof like structure, often bearing a signboard, projecting over an entrance, as to a theater or hotel. Also called marquise. Its the most significant because it bears the stores name. a painted sign board or a neon light or a glow signboard. It can be a strong image determinant as it can be subdued and subtle, or 38 flashy and gaudy


Store Exteriors
2. Entrance: first determine the number of entrances. Ideally a store should have two entrances so as to draw pedestrian (by the front entrance) and vehicular traffic (by rare or side entrance). Both the entrances must be designed differently as they serve different purpose


Store Exteriors
3. Door types: types of doors that a retailer can select from are regular, revolving, electric, self-opening, push-pull or climate controlled. Once the door is selected the retailer has to select the appropriate flooring for the entrance

Store Exteriors
4. Walkways: a wide and rich walkway makes a very unique feature of the store image when compared to narrow and congested walkway 5. Display Windows: motivate the customer to enter the store. Provide information. They carry the following benefits

Store Exteriors
Creating a particular mood by the displayed merchandise Conveying the stores contemporariness Attracting the price sensitive customers by displaying whats on sale Catching the attention of pedestrian by displaying eye-catching goods Show its concern towards society by displaying messages Number of factors to be considered: like number, size, shape, color, theme and the frequency of change in the year



Store Exteriors
6. Size of the Building: disguised and non disguised, surrounding area including the stores located near by and the parking area 7. Colors and materials: building materials like brick, matte-finished acrylics etc are used at the entrance to create a soothing effect,


Store Exteriors
steel exteriors project an image of strength while extensive use of glass creates a unique impression of contemporariness, concrete structures project an image of low cost and value based store whereas brick store creates a rather upscale image

Store Exteriors
8. Theft prevention: involves controlling employee and customer pilferage. Observation of the customers in and out of the store, find ways to monitor them through electronic theft prevention systems installed at the entrances, exits, inventory receiving doors and at the trash disposal corridors


Store Interiors
The store interiors should be attractive, comfortable and convenient for customers The image projected by the stores interiors should complement the image conveyed by its exteriors, promotional activities, prices and the quality of the merchandise offered


Store Interiors
Managing space: two major factors that make a store look unique- store layout and the visual merchandise The factors to be considered while taking decisions about store layout are
The value of space Space utilization and allocation

Store Interiors
Value of space: in terms of
Sales per square foot of floor space Sales per linear foot of shelf space Sales per square foot of exposure space Sales per cubic foot of shelf space The space at the entrance is the most valuable



Store Interiors
Utilizing and allocating space: needs five types of space in the store
Back room Office and other functional spaces The aisles Service areas Non selling areas of the sales floor Wall space and the floor space




Merchandise Presentation: Store Layout

Prepare a store prototype Store prototype is a model prepared by integrating various elements of a store Elements include: dcor, lighting, music, scent, color, fixtures etc Layout should induce impulsive buying Create small secluded places instead of huge straight spaces


Merchandise Presentation: Store Layout

Modern retailers adopt any of three design types
Grid layout Race track layout Free form layout


Merchandise Presentation: Store Layout

Grid layout: generally found in a grocery store, consists of numerous long gondolas and aisles. Cost effective and efficient utilization of retail space is possible. Layout suitable for supermarket.




Merchandise Presentation: Store Layout

Race track layout: has a major aisle running inside the store, various departments can be accessed by the customers through the aisles. The color of the aisles is different from that of the department


Merchandise Presentation: Store Layout

Free- form layout- also known as the boutique layout has the aisle and the fixtures arranged in an asymmetrical fashion. No attempt is made to create a break within a department. Used by specialty stores. Westside, Pyramid, SOBO Central


Merchandise Presentation: Store Layout

Some key factors to be considered while developing a store proto type
Increasing sales- circulation plan Maximizing returns per square foot Coordinating the merchandise with the store format Allowing flexibility in store design Recognizing the needs of the disabled/women/kids and the safety of the customers


Visual Merchandising
Helps the retailer create a visually appealing or pleasing shopping environment, which will in turn, increase the sales Also referred to as POP Three major roles
Informing customers Adding value to atmosphere Promotional tool


Visual Merchandising
Various techniques adopted by retailers for visual merchandising
Idea oriented presentation Style or item oriented presentation Color presentation Price lining Vertical merchandising Tonnage merchandising Frontal presentation


Visual Merchandising
Three types of display areas: Feature Areas: freestanding fixtures, mannequins, promotional areas Bulk of stock: entire range of stock displayed on gondolas Walls: Bata, Reebook, Adidas

Visual Merchandising
Fixtures: they carry and display the merchandise
A straight track A rounder A four way fixture A gondola Closed sell or open sell fixture Manufacturer provided fixtures


Visual Merchandising
Atmospherics: can be described as an environment that stimulates the perceptual and emotional responses of the customers through
Visual communication Lighting Colors Music and Fragrance


Visual Merchandising
Visual communication
Coordination between signs and graphics and the image of the store Providing information to the customer Using signs and graphics as supporting material Updating signs and graphics Avoiding excessive use of text in the signs Using appropriate fonts on the signs Creating theatrical effects


Visual Merchandising
Highlighting the displayed products Capturing customers mood Ability to mask the unattractive feature


Store Security
Customer theft: the theft of the merchandise on display in the store committed by entrants into the store, direct theft of the products on display, tampering with the retailers price tag to show a lower price or replacing the original price tag with a lower priced tag.

Store Security
Customer theft: those who commit this theft either derive a physical or psychological satisfaction
Amateur shoplifters Professional shop lifters

Employee theft Supplier pilferage Credit management


Different types of shoplifters

Booster Diverter Blocker Sweeper Walker Wearer Carrier Self-wrapper Price changer


Types of employee pilfers

Eater Smuggler Discounter Dipper Embezzler Partner Stasher