Store Layout, Design, and Visual Merchandising PDF

CHA PTE R 17 Store Layout, Design, and Visual Merchandising CHAPTER 17 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction...

CHA PTE R 17 Store Layout, Design, and Visual Merchandising CHAPTER 17 Copyright © 2014 McGraw-Hill Education. All rights reserved. No reproduction or distribution without the prior written consent of McGraw-Hill Education. Chapter Objectives 1. Analyze store design objectives. 2. Assess store design elements (layouts-signage-feature areas). 3. Analyze space management (factors affecting space planning-prime locations for merchandise-techniques used). 4. Analyze visual merchandising for fixtures and assess their presentation techniques. 5. Evaluate store atmospherics. 17-2 1. Store Design Objectives When designing or redesigning a store, managers must consider five main objectives. A. Implement retailer’s strategy B. Build loyalty C. Flexibility D. Control cost E. Legal considerations F. Design trade-offs 17-3 1) Store Design objectives A. Store Design and Retail Strategy The primary objective of store design is implementing the retailer’s strategy. To meet the first objective, retail managers must define the target customer and then design a store that complements the customers' needs. Customers would find it hard to accurately judge value if the physical environment were inconsistent with merchandise or prices. (c) Brand X Pictures/PunchStock C. Borland/PhotoLink/Getty Images 17-4 McDonald’s remodeled its stores to better appeal to European customers 17-5 In India, a retailer finds key to success is clutter 17-6 1) Store Design objectives B. Build Loyalty Store design provides utilitarian benefits when it enables customers to locate and purchase products in an efficient and timely manner with minimum effort. Store design provides hedonic benefits by offering customers an entertaining and enjoyable shopping experience. H. Wiesenhofer/PhotoLink/Getty Images 17-7 1) Store Design objectives B. Build Loyalty When customers are shopping to complete a task that they view as inherently unrewarding, they want to be in a soothing and calming environment. When customers are shopping for fun, they want to be in an exciting and engaging atmosphere. This means retailers must consider the typical shopping goals for their customers when designing their store environments 17-8 1) Store Design objectives C. Flexibility Retailing is a very dynamic business. Competitors enter a market and cause existing retailers to change the mix of merchandise offered. As the merchandise mix changes, so must the space allocated to merchandise categories and the layout of the store change. Thus, store designers attempt to design stores with maximum flexibility. 17-9 1) Store Design objectives C. Flexibility Store planners attempt to design stores with maximum flexibility. Flexibility can take 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. 17-10 1) Store Design objectives D. Control costs The fourth design objective to consider is the costs associated with each store design element versus the value received in terms of higher sales and profits. 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. 17-11 1) Store Design objectives E. Legal considerations Protects people with disabilities from discrimination in product and services provision. Affects store design as disabled people need “reasonable access” to merchandise and services. Thus, stores are expected to be fully accessible. 17-12 1) Store Design objectives E. Legal considerations A. Accessible dressing rooms B. Accessible checkout aisles C. Fully accessible bathrooms D. A lower checkout station Keith Brofsky/Getty Images 17-13 1) Store Design objectives F. Design Trade-Offs Ease of locating merchandise for planned purchases (c) image100/PunchStock Giving customers adequate space to shop Exploration of store, impulse purchases Royalty-Free/CORBIS Productivity of using this scarce resource for merchandise 17-14 1) Store Design objectives F. Design Trade-Offs Trade-off occurs between making the shopping environment interesting and entertaining (meeting customer hedonic values) and making merchandise easy for customers to find (meeting customer utilitarian benefits). One more trade-off is the balance between giving customers adequate space in which to shop and productively using the space for merchandise. 17-15 2. Store Design Elements A-Layouts B-Signage and Graphics C-Feature Areas 17-16 2. Store Design Elements A. Store Layouts To encourage customer exploration and help customers move through the stores. Use a layout that facilitates a specific traffic pattern Provide interesting design elements Types of Store Layouts Grid Racetrack Free Form 17-17 2. Store Design Elements A. Store Layouts (Grid Layout) The “Grid layout” The grid layout has parallel aisles with merchandise on shelves on both sides of the aisles. Cash registers are located at the entrances/exits of the stores. Used in grocery, discount, and drug stores. The grid layout is well suited for customers who are primarily interested in the utilitarian benefits offered by the store. 17-18 2. Store Design Elements A. Store Layouts (Grid Layout) Advantages Easy to locate merchandise Allows more merchandise to be displayed Cost efficient A grid layout is suitable for customers with utilitarian needs and not interested in the hedonic benefits offered by visually exciting designs. Disadvantages Does not encourage customers to explore store Limited site lines to merchandise. From the retailer's perspective, customers typically aren't exposed to all the merchandise in the store because, due to the height of the shelves, they see only products displayed in the aisle they are in. Thus the layout does not encourage unplanned purchases. 17-19 2. Store Design Elements A. Store Layouts (Racetrack Layout) Loop with a major aisle that has access to departments. Used in department stores Advantages Draws customers around the store Provide different viewing angles, encourage exploration and impulse buying. The racetrack layout facilitates the goal of getting customers to see the merchandise available in multiple departments and thus encourages unplanned purchasing. Ex; El maadi Grandmall 17-20 2. Store Design Elements A. Store Layouts (Racetrack Layout) 17-21 2. Store Design Elements A. Store Layouts ( Free-Form layout) A free-form layout, also known as boutique layout, arranges fixtures and aisles in an asymmetric pattern. The shopping environment is aesthetically pleasing. In addition, the layout reduces the amount of merchandise than can be displayed. Used in specialty stores and upscale stores. Advantages Provides an intimate, relaxing environment that facilitates shopping and browsing. Disadvantages Pleasant relaxing ambiance doesn’t come cheap. Inefficient use of space More susceptible to shoplifting – salespeople can not view adjacent spaces. 17-22 2. Store Design Elements B. Signage and Graphics (uses) Signage and graphics help customers locate specific products and departments, provide product information, and suggest items or special purchases as follows; Location – identifies the location of merchandise and guides customers Category Signage – identifies types of products and located near the goods Promotional Signage – relates to specific offers – sometimes in windows Point of sale – near merchandise with prices and product information Lifestyle images – creates moods that encourage customers to shop H & M effectively uses “lifestyle images "signage with graphic photo panels to add personality, beauty, and romance to its store’s image 17-23 2. Store Design Elements B. Signage and Graphics (uses) Digital signage Visual Content delivered digitally through a centrally managed and controlled network and displayed on a TV monitor or flat panel screen. Advantages relative to traditional signage Superior in attracting attention Enhances store environment Provides appealing atmosphere Messages can target demographics Eliminates costs with printing, distribution and installing traditional signage. 17-24 2. Store Design Elements B. Signage and Graphics (CSF) Suggestions for Effectively Using Signage(CSF) Coordinate signage to store’s image To inform customers Use them as props Limit the text on signs Use appropriate typefaces on signs 17-25 2. Store Design Elements C. Feature Areas Areas within a store designed to get the customers’ attention. They include; Entrances Freestanding displays Cash wraps End Caps Promotional Aisle or area. Walls Windows Fitting rooms PhotoLink/Getty Images 17-26 2. Store Design Elements C. Feature Areas Entrances The entry area is often referred to as the decompression zone because customers are making an adjustment to a new environment. This area provides the retailer its first opportunity to create a visual impression. Freestanding displays Located on aisles are designed primarily to get customers’ attention and bring them into a department. These fixtures often display and store the newest, most exiting merchandise in the department. Cash wraps (POP “point of purchase "counters, checkout areas) Are places in the store where customers can purchase merchandise. Because many customers go to these areas and wait in line to make a purchase, retailers often use them to display impulse purchase items. 17-27 2. Store Design Elements C. Feature Areas End caps- are displays located at the end of an aisle. Retailers use end caps for higher-margin, planned merchandise and sale merchandise. Promotional aisles-or promotional area is a space used to display merchandise that is being promoted. Drugstores, for instance, use promotional aisles to sell seasonal merchandise, such as lawn and garden products in the summer and Christmas decorations in the fall Walls-by utilizing wall space Windows-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 Fitting rooms-Many fitting rooms today are equipped with technology that enhances the buying experience 17-28 3. Analyzing Space Management The space within stores and on the stores’ shelves and fixtures is a scare resource The allocation of store space to merchandise categories and brands The location of departments or merchandise categories in the store. 17-29  3. Analyzing Space Management A. Space Planning “factors affecting space planning” Some factors that retailers consider when deciding how much floor or shelf space to allocate to merchandise categories and brands are (1) the productivity of the allocated space, (2) the merchandise's inventory turnover, (3) the impact on overall store sales. 17-30 3. Analyzing Space Management A. Space Planning (Factors affecting space allocation) Productivity of allocated space (to allocate space on the basis of merchandise sales). Merchandise inventory turnover (Merchandise categories with higher inventory turnover merit more space than merchandise categories with lower inventory turnover). Merchandise displayed on the shelf is depleted more quickly for items with high inventory turnover. Thus, more space needs to be allocated to this fast-selling merchandise to minimize the need to restock the shelf frequently and reduce stockouts. Impact on store total salesThe objective of space management is to maximize the productivity of the store, not just a particular merchandise category or department. 17-31 3. Analyzing Space Management B. Prime Locations for Merchandise categories types Highly trafficked areas Store entrances Near checkout counter Highly visible areas End aisle Displays Back left-hand corner of the store 17-32 3. Analyzing Space Management B. Prime Locations for Merchandise categories types 1. Impulse Merchandise– includes products that customers purchase without prior plans, like fragrances, cosmetics and magazines. 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 (near heavily trafficked areas “near checkouts”). 2. Demand/Destination Merchandise– These departments are known as demand/destination areas because demand for their products or services is created before customers get to their destination. For instance, children's expensive specialty goods, and furniture departments. Best location (End caps) to ensure the visibility of other merchandise categories by going through the whole store until reaching to the desired (demand) merchandise. 17-33 3.Analyzing space management C. Techniques for determining location of Merchandise within a Category: 1. The Use of Planograms Planogram: a diagram that shows how and where specific SKUs should be placed on retail selves or displays to increase customer purchases. Examples of retail stores using planograms -Supermarkets and drug stores utilizes plongrams for placing private-label brands and national brands – 17-34  3.Analyzing space management C. Techniques for determining location of Merchandise within a Category 2. Videotaping Consumers Learn customers’ movements and decision making, where they pause or move quickly, or where there is congestion. Evaluate the layout, merchandise placement, promotion 3. Virtual Store Software Learn the best place to merchandise and test how customers react to new products 17-35 3. Analyzing Space Management Summing up, A) Space planning (factors affecting space planning) (1) the productivity of the allocated space, (2) the merchandise's inventory turnover, (3) the impact on overall store sales. B) Prime locations for merchandise categories Impulse merchandise Demand/destination merchandise C) Techniques for determining location of Merchandise within a Category 1) Planogram 2)Videotaping consumers 3)Virtual store software 17-36 4. Visual Merchandising Visual Merchandising The presentation of a store and its merchandise in ways that will attract the attention of potential customers. 17-37 4) Visual Merchandising: A. Fixtures 1. Straight rack 2. Rounder (bulk fixture, capacity fixture) 3. Four-way fixture (feature fixture) 4. Gondolas 17-38 4) Visual Merchandising: A. Fixtures 1. Straight Rack Holds a lot of apparel Hard to feature specific styles and colors Found often in discount and off-price stores Royalty-Free/CORBIS 17-39 4) Visual Merchandising: A. Fixtures 2. Rounder Overview Smaller than straight rack Advantages- Holds a maximum amount of merchandise Easy to move around Disadvantages Customers can’t get frontal view of merchandise 17-40 4) Visual Merchandising: A. Fixtures 3) Four-Way Overview- Holds large amount of merchandise Adv.-Allows customers to view entire garment Appropriate to view various styles and colors Appropriate for Fashion oriented apparel retailer 17-41  4) Visual Merchandising: A. Fixtures 4.Gondolas Versatile Used in Grocery, discount stores and Some department stores Hard to view apparel as they are folded Full line discount stores Because they are extremely versatile, they are used extensively in grocery and discount stores to display everything Royalty-Free/CORBIS 17-42 4) Visual Merchandising: A. Fixtures 4.Gondolas Department store Gondolas are also found in displaying towels, sheets, and housewares in department stores. Folded apparel can be efficiently displayed on gondolas as well, but because the items are folded, it's even harder for customers to view apparel on gondolas than it is on straight racks. 17-43 4) Visual Merchandising B. Presentation techniques 1) Idea-Oriented Presentation Present merchandise based on a specific idea or the image of the store Encourage multiple complementary purchases Women’s fashion Furniture combined in room settings Sony Style mini-living rooms Fifty percent of women get their ideas for clothes from store displays or window shopping 17-44 4) Visual Merchandising B. Presentation techniques 2) Price Lining- occurs when retailers offer a limited number of predetermined price points and/or price categories within a classification that are merchandised together. 3) 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. 17-45  B. Merchandise Presentation techniques for organizing merchandise (Cont.d) 4) 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. Using this display concept, the merchandise itself is the display. 17-46 5. Creating an Appealing Store Atmosphere Atmospherics-The design of an environment through visual communications, lighting, colors, music, and scent to stimulate customers’ perceptual and emotional responses and ultimately to affect their purchase behavior 17-47 5. Creating an Appealing Store Atmosphere A. Lighting 1. Highlight merchandise 2. Structure space and capture a mood 3. Energy efficient lighting The McGraw-Hill Companies, Inc./Lars A. Niki, photographer 17-48 5. Creating an Appealing Store Atmosphere B. Color Warm colors (red, gold, yellow) produce emotional, and active responses. Cool colors (white, blue, green) have a peaceful, gentle, calming effect Culturally bounded French-Canadians – respond more to warm colors Anglo-Canadians – respond more to cool colors The McGraw-Hill Companies, Inc./Lars Niki, photographer 17-49 5. Creating an Appealing Store Atmosphere C. Music Control the pace of store traffic, create an image, and attract or direct consumers’ attention A mix of classical or soothing music encourage shoppers to slow down, relax, and take a good look at the merchandise thus to stay longer and purchase more 17-50 5. Creating an Appealing Store Atmosphere D. Scent (smell) Has a positive impact on impulse buying behavior and customer satisfaction. Scents that are neutral produce better perceptions of the store than no scent. Customers in scented stores think they spent less time in the store than subjects in unscented stores. The McGraw-Hill Companies, Inc./Gary He, photographer 17-51