Survey
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project
ITunes Store wikipedia , lookup
Marketing channel wikipedia , lookup
App Store (iOS) wikipedia , lookup
Online shopping wikipedia , lookup
Department store wikipedia , lookup
Montgomery Ward wikipedia , lookup
Grocery store wikipedia , lookup
Merchandise Mart wikipedia , lookup
J. C. Penney wikipedia , lookup
CHAPTER 18 STORE LAYOUT, DESIGN, AND VISUAL MERCHANDISING CONVERSION NOTES Berman & Evans Chapters 13 & 17 CASES AND ANCILLARY CASES CASE 1: Rainforest Café: A Wild Place to Shop and Eat Synopsis: The Rainforest Cafe is a theme restaurant similar in concept to Planet Hollywood and Hard Rock Cafe. The case describes the concept of a theme restaurant that develops and sells branded merchandise associated with the restaurant's theme. CASE 25: Picking the Best Display Synopsis: A hypothetical specialty apparel store must decide whether to put merchandise in cases or display it in an open area. CASE 26: Sephora Synopsis: Sephora is a beauty products retailer, headquartered in France and operating retail stores in multiple countries in Europe and the United States. It has expanded rapidly in the United States since the first store opening in mid-1998. The case describes the phenomenal success of Sephora retail stores, its philosophy and strategy as well as the success of its Internet retail site. Ancillary Case A1: The Gap and Old Navy Synopsis: The Gap is a multinational apparel manufacturing and retailing conglomerate. In an effort to expand and diversify its appeal, the company has in recent years opened up Old Navy, and Banana Republic. All of the company’s stores have customers of their own, but they all compete with one another to some extent. Ancillary Case A4: Niketown Synopsis: Nike, the manufacturer of the leading brand of athletic shoes, has opened retail outlets to showcase their products. These outlets have a unique and highly entertaining store environment. 529 VIDEO CASES Video Segment 2: Rainforest Café Teaching Use: Design and visual merchandising of retail outlet Featured Retailer: Rainforest Cafe Summary Rainforest Cafe is a theme restaurant in which the customers are seated in a tropical rainforest environment. The video shows the unique design of the restaurant, the types of food served, and the merchandise sold in the restaurant. The use of proprietary animal figures on the merchandise and in the restaurant design is discussed. In December 2000, Rainforest Café was purchased from the founders by Landry’s Seafood Restaurants. At the time, Rainforest Café was experiencing some financial problems due to over expansion. The growth strategy of Rainforest Café focused the development of Rainforest Café restaurants in both high-profile concentrated tourist areas, and in enclosed shopping mall locations. Most of the mall locations had high initial revenues that was followed by prolonged revenue declines. (The repeat business was not high.) While these mall locations generate revenues significantly greater than typical casual dining restaurants, they also had higher operating costs. This video complements Case 1 in the textbook. Video Segment 3: Build a Bear Teaching Use: Design and visual merchandising of retail outlet Featured Firm: Build a Bear Workshop Summary: Build a Bear Workshop is a national mall-based specialty store retailer with over 100 locations in the U.S. The stores target children and sell store stuffed animals. The unique aspect of the firm’s retail offering is that children can create their own unique animals and clothes them. The video discusses the critical issues such as employee training and human resource management for a retailer that provide a high level of customer service. This video complements Case 2 in the textbook. Video Segment 24: Store Layout Teaching Use: Illustrate principles for deciding where merchandise is located in a store. 530 Featured Retailer: Eckerd Drugs Summary: This segment and the next segment were developed from training videos used by Eckerd, one of the four major drugstore chains in the U.S. Eckerds is owned by JCPenney. This segment emphasizes the placement of merchandise categories in the store. The next segment focuses on arrangement of merchandise on the shelf. The placement of complementary merchandise categories close to each other is emphasized. Video Segment 25: Merchandise Presentation Teaching Use: Illustrate principles in display merchandise in a store Featured Retailer: Eckerds Summary: This segment and the preceding segment were developed from training videos used by Eckerd, one of the four major drugstore chains. Eckerds is owned by JCPenney. This segment emphasizes the arrangement of merchandise on shelves, while the preceding segment focuses on the placement of merchandise categories within the store. Consideration of consumer behavior in buying merchandise is emphasized. Video Segment 26: JCPenney Use Centralized Cash Wraps Teaching Use: Illustrate the use of cash wraps at a major department store Featured Retailer: JCPenney Summary: Cash wraps are the place in stores where POS terminals are located so that customers can buy merchandise and have it put into a bag to carry out of the store. In discount stores and supermarkets, customers buy merchandise at POS terminals located in checkout lines at the entrance/exits to the store. However, in department stores and some category specialists, the cash wraps are located in each department within the store. Kohls, a very successful department store chain, initiated the practice of using fewer centralized cash wraps, typically located at the entrances and near the escalators. Now other middle market department stores, JCPenney and Sears, are adopting this practice. This video presents the reason why JCPenney adopted this approach and how it has implemented it. Note that JCPenney refers to these centralized cash wraps as quad wraps. 531 Video Segment 27: Consumer Behavior and Store Design Teaching Use: Impact of store design and visual merchandising on customers Featured Firm: Envirosell Summary: Envirosell is a NY market research and consulting company that analyzes traffic patterns, aisle width, display locations, placement of merchandise in stores, and the overall use of space to increase space productivity. Paco Underhill, the managing director of Envirosell is a noted expert in this area and has written a widely read trade book entitled How We shop. He and his staff share some observations about how retail space can be reengineered in this video. 532 INSTRUCTOR NOTES ANNOTATED OUTLINE I. Objectives of a Good Store Design See PPT 18-4 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. A. Design Should Be Consistent With Image and 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. B. Design Should Positively Influence Consumer Behavior To meet the second design objective of influencing customer buying decisions, retailers concentrate on store layout and space planning issues. Customers' purchasing behavior is also influenced, both positively and negatively, by the store's atmosphere. C. Design Should Consider Costs versus Value Consistent with any retail decision, the third design objective is to consider 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. When considering the atmospheric issues 533 of store design, retailers must weigh the costs along with the strategy and customer attraction issues. D. Design Should Be Flexible 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. E. Design Should Recognize the Needs of the Disabled – The Americans with Disabilities Act Ask students to identify a store that would be inaccessible to a disabled person. Besides providing for a nondiscriminatory work environment for the disabled, the Americans with Disabilities Act (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. Accessibility answers are not clear or easy; they are being considered on a case-bycase basis in federal courts around the United States. II. Store Layout See PPT 18-5 To design a good store layout, store designers must balance many objectives-objectives that often conflict. First, the store layout should entice customers to move around the store to purchase more merchandise than they may have originally planned. One method of encouraging customer merchandise exploration is to present them with a layout that facilitates a specific traffic pattern. 534 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. Another method of helping customers move through the store is to provide interesting design elements. A second objective of a good layout is to provide a balance between giving customers adequate space in which to shop and productively using this expensive, often scarce resource for merchandise. To meet their objectives, retailers must decide which design type to use and how to generate traffic through feature areas. A. Types of Design See PPT 18-6 Today’s modern retailers use three general types of store layout design: grid, racetrack, and free-form. 1. Grid 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. 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. The grid layout is also cost-efficient because space productivity is enhanced and fixtures are standardized. See PPT 18-7, PPT 18-8 Ask students what is the best types of stores for a grid design and why. 2. Racetrack 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. The recetrack design encourages impulse purchasing. 535 See PPT 18-9, PPT 18-10, PPT 18-11 Ask students to give examples of different stores that have a "racetrack" design. What are the advantages and disadvantages? 3. Free-Form 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. In this relaxed environment, customers feel like they are in someone's home, which facilitates shopping and browsing. A pleasant atmosphere may be expensive due to expensive fixtures, higher occurance of theft, and the sacrifice of storage and display space. See PPT 18-12,PPT 18-13, PPT 18-14 Ask students why upscale specialty stores often use a free-form design. B. Feature Areas See PPT 18-15 Feature areas are areas within a store designed to get the customer's attention. See PPT 18-16 for a summary of principles of website design based on store design principles. They include end caps, promotional aisles or areas, freestanding fixtures and manequins, windows, point-of-sale areas, and walls. 1. End Caps End caps are displays located at the end of the aisle. 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. 2. Promotional Aisle or Area A promotional aisle or area is an aisle or area used to display merchandise that is being promoted. 3. Freestanding fixtures and Mannequins Freestanding fixtures and mannequins located on aisles are designed primarily to get customers’ attention and bring them 536 into a department. These fixtures often display and store the newest, most exiting merchandise in the department. 4. Windows Although window displays are clearly external to the store, they can be an important component of the store layout. 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. 5. Point-of-sale Areas Point-of-sale areas, also known as point-ofpurchase, POP, checkout, or cash-wrap areas, are places in the stoer where customers can purchase merchandise. 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. Tell students that you know that none of them would pick up National Enquirer 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.) 6. 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. See PPT 18-17 III. Space Planning Allocation of space to departments, categories, and then items is one of the store planners’ and category managers’ most complicated and difficult decisions. They must answer four questions: What items, vendors, categories, and 537 In most of the very successful stores in the 1990s, e.g., Wal-Mart, store planning starts with merchandise managers, not store planners. The merchandise managers determine the optimum allocation of space for their merchandise. It is then the store planners job to design and build stores to fit the merchandise.. departments should be carried? How much of each item should be carried? How much space should the merchandise take? Where should the merchandise be located? Store planners in conjunction with category managers typically start by allocating space based on sales productivity. They must then adjust the initial estimate on the basis of the following five factors. How profitable is the merchandise? The marginal analysis approach for allocating promotional expenditures to merchandise (as Chapter 16 related) also works for allocating space. The retailer allocates space to SKUs to maximize the merchandise category's profitability. How will the planned inventory turnover and the resulting stock-to-sales ratio effect how many SKUs will normally be carried in stock? Buyers and store planners must allocate space on the basis of seasonal needs rather than yearly averages. They must also estimate the proportion of merchandise kept on display versus backup stock. How will merchandise be displayed? Store planners design fixtures to go with the merchandise. But once the fixtures are in the store, buyers must consider the fixtures' physical limitations when assigning space to merchandise. Will the location of certain merchandise draw the customer through the store, thus facilitating purchase? Retailers locate departments and specific merchandise to facilitate purchases of impulse and complementary products. What items does the retailer wish to emphasize? Buyers purchase according to 538 See PPT 18-18 sales and seasonal predictions and plan additional advertising. A. Locations of Departments The profit-generating ability of various locations within a store are not equal. The more traffic through a department, the better the location will be. Retailers must consider additional demandgenerating factors and the interrelations between departments when determining their locations. 1. Relative Location Advantages See PPT 18-19 The best locations within the store depend on the floor location, the position within a floor, and its location relative to traffic aisles, entrances, escalators, and so on. In general, in a multilevel store, a space's value decreases the further it is from the entry-level floor. The position within a store is also important when assigning locations to departments. The best locations are those closest to the stores entrances, main aisles, escalators, and elevators. Finally, most customers won't get all the way to the center of the store so many stores use the racetrack design to induce people to move into the store's interior. 2. Impulse Products Impulse products are 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. 3. Demand/Destination Areas 539 Pick a store and have students decide if the departments are located in the “best” spot. 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. Ask students where they would expect to find the travel and/or beauty salon (in an out-of-the-way location). 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. 4. Seasonal Needs Some departments need to be more flexible than others, such as winter coats and swimwear. 5. Physical Characteristics of Merchandise Departments that require large amounts of floor space, like furniture, are often located in the less desirable locations. 6. Adjacent Departments Ask a student what he/she purchased on their last trip to a drug store. Assuming other customers purchase a similar marketbasket, the store could group these categories together. Retailers often cluster complementary products together to facilitate multiple purchases. Some stores are now combining traditionally separate departments or categories to facilitate multiple purchases using market-basket analysis. Stores are laid out based on the way customers purchase merchandise, rather than based on traditional categories or departments. 7. The Special Case of Grocery Stores In grocery stores, the items almost everyone buys – milk, eggs, butter, and bread – are in the back left-hand corner. To get to them, a shopper tending to turn right must travel half the store's perimeter 540 and go past every aisle. Most supermarkets steer shoppers immediately into the produce section because the smell of fresh fruits and vegetables gets a shopper's mouth watering, and the best grocery store customer is a hungry one. Supermarkets place private-label brands and other higher margin items ot the right of national brands. Ask students about the layout of the grocery stores they frequent. Does the layout affect their decisions as to what and how much to buy? Also, do they buy more when they are hungry vs. when they have just had a meal before shopping? 7. Evaluating a Departmental Layout Envirosell, a consulting firm in New York, has made a science out of determining the best ways to lay out a department or a store. The firm utilizes lots of hidden video cameras and other high-tech equipment, but its most important research tool is a piece of paper called a track sheet in the hands of individuals called trackers. Trackers follow shoppers and note everything that they do. Some of the few things learnt include: Avoid the “butt-brush” effect. Shoppers don’t like to shop when their personal space is invaded. Place merchandise where their customers can readily access it. Allow a transition zone. Allowing some space between the entrance of a store and a product gives it more time in the shopper’s eye as he or she approaches it. B. Location of Merchandise Within Departments: The Use of Planograms See PPT 18-20 Ask students if they have ever experienced the “butt brush.” Ask them what they do if too much merchanadise is too close to the front door of a store. See PPT 18-21, PPT 18-22, PPT 18-23 To determine where merchandise should be located within a department, retailers of all types generate maps known as planograms. A planogram is a diagram created from photographs, computer output or artists’ renderings that illustrates exactly where 541 every SKU should be placed. 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. Planograms are also useful for merchandise that doesn't fit nicely on gondolas in a grocery or discount store. 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. A productivity measure (the ratio of an output to an input) determines how effectively a retailer uses a resource. 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 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. C. Leveraging Space: In-Store Kiosks In-store kiosks are spaces located within stores containing a computer connected to the store's central offices or to the Internet. In-store kiosks can be used by customers or salespeople to order merchandise through a retailer's electronic channel, check on product availability at distribution centers or other stores, get more information about the merchandise, and scan bar codes to 542 See PPT 18-24 check the prices. Kiosks can encourage customers to stay in the store longer and, it is hoped, to spend more money. However, kiosks can be expensive. Also, once the investment is made, there is no guarantee that customers will use them. Finally, there are significant costs in maintaining the kiosks – making sure they are working properly. IV. Merchandise Presentation Techniques To decide which method of presenting the merchandise to the customer is best for a particular situation, store panners must consider four issues. First, and probably most important, merchandise should be displayed in a manner consistent with the store's image. Second, store planners must consider the nature of the product. Third, packaging often dictates how the product is displayed. Finally, products' profit potential influences display decisions. A. 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. Individual items are grouped to show customers how the items could be used and combined. This approach encourages the customer to make multiple complementary purchases. B. Style/Item Presentation Organizing stock by style or item is 543 See PPT 18-25 probably the most common presentation techique. Arranging items by size is a common method of organizing many types of merchandise, from nuts and bolts to apparel. C. Color Presentation This is a bold merchandising technique where products, especially seasonal fashion goods, are displayed at the same place. D. Price Lining Price lining is the technique when retailers offer a limited number of predetermined price points within a classification. Organizing merchandise in price categories is a strategy that helps customers easily find merchandise at the price they wish to pay. E. Vertical Merchandising Another common way of organizing 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. F. 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. G. Frontal Presentation 544 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. H. 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. Fixtures come in an infinite variety of styles, colors, sizes, and textures, but only a few basic types are commonly used. For apparel, retailers utilize the straight rack, rounder, and four-way. The mainstay fixture for most other merchandise is the gondola. The straight rack consists of a long pipe suspended with supports going to the floor or attached to a wall. See PPT 18-27 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. See PPT 18-28 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. See PPT 18-29 Gondolas are extremely versatile and used extensively in grocery and discount stores to display everything from canned foods to baseball gloves. See PPT 18-26 See PPT 18-30 V. Atmospherics See PPT 18-31 Atmospherics refers to the design of an environment via visual communications, lighting, colors, music, and scent to stimulate customers' perceptual and 545 emotional responses and ultimately to affect their purchase behavior. A. Visual Communications Visual communications--comprising graphics, signs, and theatrical effects both in the store and in windows--help boost sales by providing information on products, suggesting items or special purchases. Retailers should consider the following seven issues when designing visual communications strategies for their stores. 1. Coordinate Signs and Graphics with the Store's Image Signs and graphics should act as a bridge between the merchandise and the target markets. The colors and tone of the sign and graphics should complement the merchandise. 2. Inform the Customer Informative signs and graphics make merchandise more desirable. The sign is foremost a sales tool designed to appeal to specific customer needs and wants. 3. Use Signs and Graphics as Props Using signs or graphics that masquerade as props (or vice versa) is a great way to unify theme and merchandise for an appealing, overall presentation. 4. Keep Signs and Graphics Fresh Signs and graphics should be relevant to the items displayed in the store windows and should not be left in the windows after displays are removed. 546 See PPT 18-32 New signs imply new merchandise. 5. Limit the Copy of Signs Since a sign’s main purpose is to catch attention and inform customers, the copy is important to a sign's overall success. As a general rule, signs with too much copy won't be read. 6. Use Appropriate Typefaces on Signs Different typefaces impart different messages and moods. 7. Create Theatrical Effects To heighten store excitement and enhance store images, retailers have borrowed from the theater. Theatrical effects may be simple extensions of more functional elements, like signs using colored fabric to identify a department. B. Lighting See PPT 18-33 Lighting in a store is used to highlight merchandise, sculpt space, and capture a mood or feeling that enhances the store's image. Lighting can also be used to downplay less attractive features that cannot be changed. 1. Highlight Merchandise A good lighting system helps create a sense of excitement in the store. At the same time, lighting must provide an accurate 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. 547 2. Capture a Mood and Maintain an Image Traditionally, U.S. specialty and department stores have employed incandescent lighting sources to promote a warm and cozy ambience The European method of lighting can now be found in the most exclusive specialty stores of Rodeo Drive and Bal Harbour 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. C. Color The creative use of color can enhance a retailer’s image and help create a mood. Warm colors (red and yellow) are thought to attract customers and gain attention, yet they can be distracting and even unpleasant. In contrast, research has shown that cool colors, like blue or green, are relaxing, peaceful, calm, and pleasant. Thus, cool colors may be most effective for retailers selling anxiety-causing products, such as expensive shopping goods. Have students choose two very different stores, like a men’s and a women’s clothing store, and compare the color schemes. D. Music Music can either add or detract from a retailer's total atmospheric package. Unlike other atmospheric elements, however, music can be easily changed. Ask students if they are aware of stores that use music to their advantage/disadvantage. 548 Research has shown that the presence of music positively affects customers' attitudes toward the store. 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. Changing music in different parts of a store can help alter a mood or appeal to different markets. E. Scent Many buying decisions are based on emotions, and smell has a large impact on our emotions. Research has shown that scent, in conjunction with music, has a positive impact on impulse buying behavior and customer satisfaction. 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. VI. Summary 549 Ask students if they notice a scent in a store. 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. 550 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; 5) seasonal needs—candy (in October for Halloween and April for Easter next to cookies and other deserts); and 6) physical characteristics of merchandise—lighting fixtures need to be next to an ample supply of electrical outlets so they can be demonstrated. 551 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 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, particulary 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, therey 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 ligitigation since it is now in better compliance of the law. 552 7. Describe the ways in which designing a website 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. Which retailers are particularly good at presenting their store as theater? Why? Student answers will vary, however, one example would be Recreational Equipment Inc. (REI). In their new store in Denver, for instance, they have a large, steel-encased freezer-like fixture where shoppers can test winter parkas and seeping bags. Mountain bikes cvan be tested on a trail that runs through the store’s landscaped outdoor courtyard. Hiking boots can be tried on a footwear test track. Bike lights and reflectors can be tested in an illuminator room. In the center is a sculptured indoor rock-climbing pinnacle. It offers a variety of climbing terrains, including routes specifically geared for children. 9 Lighting in a store has been said to be similar to makeup on a model. Why? Makeup is used to accentuate or downplay facial features. An analogy can certainly be made to lighting in a retail store. Good lighting in a store is more than simply the illumination of space. It is used to highlight merchandise, architecturally sculpt space, dramatize, and capture a mood or feeling. Lighting can also be used to downplay features that cannot be changed. 10. 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. 553 ADDITIONAL DISCUSSION QUESTIONS AND PROBLEMS 1. Choose a store which you believe is particularly good at using signs. Explain why you chose that store. Student answers will vary, however, students should support their choice of store with examples of signage that effectively communicate. Interesting and effective signage should above all, inform the customer. Prices, special instructions, and interesting product notes all have important application to signs. In addition, directions such as the location of rest room facilities, elevators, exits, etc. should be visible and clearly marked. Signage can also be used very creatively. Signs which are used as props and/or contain interesting and contemporary graphics can also be very effective. When appropriate, signs can be targeted to a specific target market and/or coordinated with the merchandise. 554 ANCILLARY LECTURES AND EXERCISES Exercise # 18-1: Store Layout, Design, And Visual Merchandising ------------------------------------------------Instructor’s Notes: Instructors may want to give students a practical assignment in which they will be required to analyze a store’s layout, design, and use of visual merchandising. This exercise provides a question format by which the students can organize their observations. Instructors might want to use this exercise as a stimulus to a class discussion on the topic. -----------------------------------------------Instructions Go into a store of your choice and evaluate the store layout, design, and visual merchandising techniques employed. Explain your answers to the following questions: 1. In general, is the store layout, design and visual merchandising techniques used consistent with the exterior of the store and location? 2. Is the store’s ambiance consistent with the merchandise presented and the customer’s expectations? 3. Does the store look like it needs to be redesigned? Do you think it needs a face lift, update, remodel or renovation? 4. To what extent is the store’s layout, design, and merchandising techniques flexible? 5. Notice the lighting. Does it do a good job in highlighting merchandise, structuring space, capturing a mood, and downplaying unwanted features? 6. Are the fixtures consistent with the merchandise and the overall ambiance of the store? Are they flexible? 7. Evaluate the store’s signage. Do they do an effective job in selling merchandise? 8. Has the retailer used any theatrical effects to help sell merchandise? 9. Does the store layout help draw people through the store? 10. Evaluate the retailer’s use of empty space. 11. Has the retailer taken advantage of the opportunity to sell merchandise in feature areas? 12. Does the store make creative use of wall space? 13. What type of layout does the store use? Is it appropriate for the type of store? Would another type layout be better? 555 14. Ask the store manager how the profitability of space is evaluated; for example, profit per square foot. Is there a better approach? 15. Ask the store manager how space is assigned to merchandise. Critically evaluate the answer. 16. Ask the store manager if plan-o-grams are used. If so, try to determine what factors are considered when putting together a plan-o-gram. 17. Has the retailer employed any techniques for achieving greater space productivity such as using the “cube”, down-sizing gondolas and racks, and minimizing non-selling space? 18. Are departments in the most appropriate locations? Would you move any departments? 19. What method(s) has the retailer used for organizing merchandise? Is this the “best” way? Suggest appropriate changes. 556