Download additional discussion questions and problems

yes no Was this document useful for you?
   Thank you for your participation!

* Your assessment is very important for improving the workof artificial intelligence, which forms the content of this project

Document related concepts

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

Shopping wikipedia , lookup

Shoplifting wikipedia , lookup

Retail wikipedia , lookup

Visual merchandising wikipedia , lookup

Berman & Evans
Chapters 13 & 17
CASE 1: Rainforest Café: A Wild Place to Shop and Eat
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
A hypothetical specialty apparel store must decide whether to put merchandise in
cases or display it in an open area.
CASE 26: Sephora
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
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
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.
Video Segment 2: Rainforest Café
Teaching Use:
Design and visual merchandising of retail outlet
Featured Retailer:
Rainforest Cafe
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
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.
Featured Retailer:
Eckerd Drugs
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:
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:
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.
Video Segment 27: Consumer Behavior and Store Design
Teaching Use:
Impact of store design and visual merchandising on customers
Featured Firm:
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.
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
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
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
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.
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
The recetrack design encourages impulse
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
Freestanding fixtures and mannequins
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
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
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
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
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
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
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
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
4. Seasonal Needs
Some departments need to be more flexible
than others, such as winter coats and
5. Physical Characteristics of
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
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
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
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
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
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
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
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
This approach encourages the customer to
make multiple complementary purchases.
B. Style/Item Presentation
Organizing stock by style or item is
See PPT 18-25
probably the most common presentation
Arranging items by size is a common
method of organizing many types of
merchandise, from nuts and bolts to
C. Color Presentation
This is a bold merchandising technique
where products, especially seasonal
fashion goods, are displayed at the same
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
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
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
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
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
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
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
The colors and tone of the sign and
graphics should complement the
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
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.
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
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.
2. Capture a Mood and Maintain an
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
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.
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
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
Ask students if they notice a scent in a store.
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.
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
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.
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.
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.
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.
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.
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.
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.
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
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.
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.
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.
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
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
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?
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.