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AMITY BUSINESS SCHOOL

Store Layout

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Store Design Objectives


• Consistent with retailers image and
strategy
• Positive influence on customer
satisfaction and purchase behavior
• Cost effective
• Flexible
• Meet needs of disabled
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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Store Layout Management


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

• 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.

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Pooja Sehgal Tabeck
Elements That Compose the Store AMITY BUSINESS SCHOOL

Environment
Visual Communications Store Planning
Retail Identity Space Allocation
Graphics Layout
POS Signage Circulation
Store Image
And
Productivity

Store Design Merchandising


Exterior Design Fixture Selection
Ambiance Merchandise Presentation
Lighting Visual Merchandising

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Store Planning

• Allocating Space
• Circulation
• Shrinkage Prevention

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Pooja Sehgal Tabeck
Store Planning AMITY BUSINESS SCHOOL

• Microretailing - Occurs when a chain store


retailer operating over a wide geographic area,
usually nationally, tailors its merchandise and
services in each store to the needs of the
immediate trading area.
• Stack-outs - Pallets of merchandise set out on
the floor in front of the main shelves.

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Space Productivity
The more merchandise the customer are exposed to, that is presented in the
orderly manner, the more they tend to buy
In-store Advertising and displays let the customer know that what is
happening in other shopping areas and thus encourage to visit that area
Retailers are spending more on in-store design, merchandise presentation,
Visual displays and in-store promotions instead of advertising
It is easy to make; that customer buy more who is already in the store than
getting new one

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Consumer Behavior – Supermarket Style

Most Customers are not only right handed but also right headed
Stock national brand right of store brands so that consumer goes across
store brand to get the national brand
Display higher gross margin product on right side of the aisles
Put bakery product on right so as to make the customer hungry.
Supermarkets know hungry customer is the best customer
Most customers think neatness counts
‘Dump Displays’ are haphazard displays  they give cheap looks 
Great Bargain
Handwritten signs create the impression of recently lowered prices

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Most Customer are likely to focus on large central


display

Follow 25-25-50 rule

Of all endcaps 25% should have advertised sale


merchandise (that the customer will seek out)

Other 25% should be unadvertised sale items (that


causes customer to remain alert when looking at an
endcap)

Remaining 50% should be regular priced seasonal or


impulse merchandise

Retailers tend to violate above rule when mfr. offer


rent for their displays

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Allocating
Space Starting point for developing a
floorplan is analysing how the
available store space measured
in square footage, should be
allocated for different
departments

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Types of space needed


Five Types: 1) Back Room 2) Office and other personal space 3)Aisles,
Service Areas 4) Wall Merchandise Space 5)Floor Merchandise space
Back Room:
Back Room is required to receive, process and hold inventory
This space varies with the type of retailer (50% in Department store,
10% in Specialty and Convenience store)
SCM practices with JIT has brought down back room space
Warehouse Clubs have only receiving areas but no back room
Cartons of excess inventory is kept at higher levels (84”)
Retailer thus pays same rent for the sq. footage but use heights thus
using cubic footage

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This stocking method interestingly creates low-cost image of the store 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL
Offices and other Functional Spaces
This includes break room, training/meeting room, cabin, bathroom facilities
This space gets lesser priority
Aisles, Service Areas and other Nonselling areas
Main aisles should be broad and should lead to smaller aisles like
herringbone structure
These aisles should be wide enough upto 15 ft.
Other non-merchandised area are dressing rooms, layaway areas, service
desks
Productivity – Merchandised area or non-merchandised area (Trade off ?)
Floor Merchandise Space
Here, many different types of fixtures are used to display wide variety of
merchandise

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Its just not to cram the largest amount but to place so that consumer can 1
Pooja Sehgal Tabeck
understand and shop
AMITY BUSINESS SCHOOL

Wall Merchandise Space


They serve as fixtures; holding tremendous amount of merchandise
Provide visual backdrop to the floor merchandise
Space Allocation Planning
20% of the inventory is not looked by the customer
This stresses to know the productivity and profitability of all
merchandise
Two reasons for the space planning – 1)Revising the space allocation of
existing store OR planning a new store
One such measure is Space Productivity index
% age of total gross margin dollars for a particular merchandise
=
%age of space required by that merchandise

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

If the index is below 1 than category is underperforming


For Apparels the index is highest, for furniture- least (lesson?)
Underperforming categories sometimes have to be continued
Space Allocations for a new Store
In the absence of past data, space allocation is based on industry standards
Robert Kahn to Sam Walton – Store profitability is not the function of
adding more merchandise displays, but
Sales per square foot = f (Number of Customers) x (The length of time
they spend on the store
Wal Mart then built ten 85,000 sq. ft. store and ten 1,15,000 sq. ft. store
Larger stores produced higher sales per square foot
Parking space was always full, showing shoppers were spending more
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time 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Comfortable space should be there for the customers to pass through


the aisles

Myth: If customer is sitting down, he is not shopping.

Put at least one bench for the customer to rest

Put a water stand in the corner

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Space Planning Considerations

• High traffic & highly visible areas


– Entrances, escalators, check-out area, end aisles, feature areas
 Profitability of merchandise
 Private brand, higher margin categories
 Customer buying considerations
 Impulse products near front
 Demand/destination areas in back, off the beaten path
 Physical characteristics of product
 Bulky vs. small/easily stolen
 Complementary products should be adjacent
 Sales rate
 Display more units of fast-selling merchandise (tonnage
merchandising
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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Types of Store Layouts

• Grid
• Racetrack
• Free Form
• Spine Layout

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Pooja Sehgal Tabeck
Grid Layout AMITY BUSINESS SCHOOL

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?
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Pooja Sehgal Tabeck
Grid Store Layout AMITY BUSINESS SCHOOL

Receiving & storage

Fruit
Books, magazines, seasonal Cart
display area
Vegetables Checkouts

Entrance
Office &
customer
service
Exit
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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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

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Pooja Sehgal Tabeck
Racetrack Layout
AMITY BUSINESS SCHOOL
Major and minor loops with multiple entrances & 
multiple sight lines,
lines draws shopper around the
store, encourages exploration, impulse buying
 



 
 


 
Location of departments men’s vs. women’s
impulse goods – near entrances, to the right, escalators, point-of-sale
demand/destination – upper floors, back corners; complementary – adjacent
Display areas – feature areas (walls, promotional areas, point- of-sale areas, feature fixtures,
windows)
Fixtures – feature fixtures – four-way, free-standing/mannequins, glass cases
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Sehgal Tabeck
+ gondolas, rounders & straight racks bulk-of-stock & sale merchandise
AMITY BUSINESS SCHOOL

Free-Form (Boutique) Layout


Fixtures and aisles arranged asymmetrically
• Pleasant relaxing ambiance doesn’t come
cheap – small store experience
• Inefficient use of space

Used in specialty stores and upscale


department stores

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Pooja Sehgal Tabeck
Free-Form Layout AMITY BUSINESS SCHOOL

Storage, Receiving, Marketing

Hats and Handbags


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

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Pooja Sehgal Tabeck
Spine Layout AMITY BUSINESS SCHOOL

• 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 1
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as an aisle
Pooja Sehgal Tabeck
Store Planning AMITY BUSINESS SCHOOL

Free-flow Fixtures and merchandise are grouped into free-flowing


layout patterns on the sales floor.
Grid layout The counters and fixtures are placed in long rows or ‘‘runs,’’
usually at right angles, throughout the store.
Loop layout A major customer aisle begins at the entrance, loops
through the store—usually in the shape of a circle, square,
or rectangle—and then returns the customer to the front of
the store.
Spine layout A single main aisle runs from the front to the back of the
store, transporting customers in both directions, and where
on either side of this spine, merchandise departments using
either a free-flow or grid pattern branch off toward the back
side walls.

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Location of Departments
• Relative location advantages

• Impulse products

• Demand/destination areas

• Seasonal needs

• Physical characteristics of merchandise

• Adjacent departments

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

Shrinkage
Loss of merchandise through theft, loss and damage is called Shrinkage
Retailers only know that their inventory in the store has shrunk
Stores that make the customer to move through entire store fall victim to
high shrinkage
Shrinkage ranges from 1 to 4 percent of retail sales
Avoid hidden areas of the store
Bring down the merchandise movement to avoid damage

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Shrinkage -Types AMITY BUSINESS SCHOOL

• Employee Theft – 46.8%


• Shoplifting - 31.6%
• Administrative Error- 14.4%
– PRICING MISTAKES
– PROCESS FAILURE
– ACCOUNTING ERRORS

• Vendor fraud- 3.75%


• Unknown error – 2.86%

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

• According to the Global Retail Theft Barometer (GRTB)


2010 survey that was conducted across 42 countries,
India’s retail industry tops the list with a loss of $2.2
billion due to pilferage. This is the fourth year in a row
that India has topped the list. The survey was prepared
by the Centre for Retail Research, Nottingham, UK. In
India, 30 modern retailers who together represent over
60% of the modern retail trade in the country with a
footprint of around 5,900 stores participated in it. The
data was then extrapolated to be representative of the
entire retail business in India, of which modern retail
constitutes 6% .

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

• Beginning Inventory + Purchases - (Sales +


Adjustments) = Booked (Invoiced) Inventory

• Booked Inventory - Physical Counted Inventory


= Shrinkage

• Shrinkage/Total Sales x 100 = Shrinkage


Percent

RMM 1
Pooja Sehgal Tabeck
AMITY BUSINESS SCHOOL

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Pooja Sehgal Tabeck