Chapter 18 Store Layout, Design, and Visual Merchandising Copyright © 2009 by The McGraw-Hill Companies, Inc. All rights reserved.McGraw-Hill/Irwin

1-2 The Retail Format (Retail Mix) Customer Service Store Design and Display Merchandise Assortment Communication Mix LocationPricing Retail Mix

18-3 Store Design Objectives ■When designing a store, the retailer should consider several factors. Store Design and Retail Market Strategy Influence on Consumer Buying Behavior Cost

Walmart Interior 18-4

Tiffany’s Interior 18-5

18-6 Store Design ■Layouts ■Signage and Graphics ■Feature Area

18-7 Store Layouts ■A store layout is the design in which a store’s interior is set up. May encourage customers to follow a specific traffic pattern May encourage customers to wander around and explore different parts of the store. ■Types of Store Layouts Grid Racetrack Free Form

18-8 Grid Layout – contains long gondolas of merchandise and aisles in a repetitive pattern ■Used in grocery, discount, and drug stores: Why? ■Easy to locate merchandise ■Allows more merchandise to be displayed ■Cost efficient ■Is not particularly aesthetically pleasing

18-9 Racetrack Layout (Loop) ■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. ■Used in department stores. Why? ■Draws customers around the store ■Provide different viewing angles and encourage exploration and impulse buying

18-10 JCPenney Racetrack Layout

18-11 Example of Race Track Layout PhotoLink/Getty Images

18-12 Free-Form (Boutique) Layout ■Fixtures and aisles arranged asymmetrically ■Provides an intimate, relaxing environment that facilitates shopping and browsing ■Used in specialty stores ■Pleasant relaxing ambiance ■Inefficient use of space ■More susceptible to shoplifting – salespeople can not view adjacent spaces.

18-13 Example of Free-Form Layout

18-14 Signage and Graphics ■What is the purpose of signage and graphics? ■Category Signage – helps customers locate specific product categories and departments ■Promotional Signage – informs customers of special promotions within the store ■Point of sale – is located near specific merchandise and provides price and other product information ■Photo panels – creates moods that encourage customers to shop and enhances the store’s image

Walmart Category Signage 18-15

Lowes Category Signage 18-16

18-17 H & M Photo Panels

18-18 Feature Areas Areas within a store designed to get the customers’ attention Feature areas Entrances – decompression zone Freestanding displays Promotional aisles Walls Displays Window Displays Fitting rooms Cash wraps (POP counters, checkout areas) PhotoLink/Getty Images

Free Standing Display 18-19

Free Standing Display 18-20

Free Standing Display 18-21

Wall Display 18-22

18-23 Window Display F ifty percent of women get their ideas for clothes from store displays or window shopping

18-24 Space Management ■The space within stores is a scarce resource. ■Space management involves: ■The allocation of store space to merchandise categories and brands ■The location of departments or merchandise categories in the store

18-25 Allocation of Store Space ■Sales per square foot – a simple rule of thumb is to allocate space on the basis of merchandise sales. ■Gross margin per square foot – allocate space to merchandise categories based on effects on the profitability of the entire store.

18-26 Location of Merchandise Categories ■Plays a role in how customers navigate through the store ■Demand/Destination merchandise – place off the beaten path – in corners, on upper floors. Why? ■Impulse merchandise – place near heavily trafficked areas or front of the store. Why? ■Adjacencies – cluster complimentary merchandise next to each other

18-27 Prime Locations for Merchandise ■Highly trafficked areas Store entrances Near checkout counter ■Highly visible areas End aisle Displays

18-28 Location of Merchandise within a Category: The Use of Planograms ■Planogram: a diagram that shows how and where specific SKUs should be placed on retail shelves or displays to increase customer purchases ■Supermarkets and drug stores place private-label brands to the right of national brands – shoppers read from left to right (higher priced national brands first and see the lower-priced private-label item)

18-29 Learning customers’ movements and decision-making ■Videotaping Consumers Learn customers’ movements, where they pause or move quickly, or where there is congestion Evaluate the layout, merchandise placement, promotion ■Tracking Shopping Carts

Visual Merchandising ■Is concerned with the presentation of merchandise in a way that will attract the attention of potential customers. ■Fixtures – Primary purposes are to efficiently hold and display merchandise, define areas of the store, and encourage traffic flow ■Fixtures come in a variety of colors, styles, and sizes

18-31 Visual Merchandising: Fixtures A.Straight rack B.Rounder (bulk fixture, capacity fixture) C.Four-way fixture (feature fixture) D.Gondolas

18-32 Gondolas ■Versatile ■Grocery and discount stores ■Some department stores ■Hard to view apparel as they are folded Royalty-Free/CORBIS

18-33 Merchandise Presentation Tips ■Display in a way that is consistent with the store’s image. ■Consider the nature of the product ■Consider the nature of the product’s packaging. ■Use idea oriented presentation ■Use price lining presentation ■View the store through the customer’s eyes

18-34 Store Atmospherics Color Scent Music Lighting Store Atmosphere The design of an environment through visual communications, lighting, colors, music, and scent to stimulate customers’ perceptual and emotional responses and ultimately to affect their purchase behavior

18-35 Lighting Lighting can be used to: ■Highlight certain merchandise ■Create a mood ■Downplay less attractive features of the store The McGraw-Hill Companies, Inc./Lars A. Niki, photographer

18-36

McDonalds 18-37

18-38 Color ■Warm colors (red, gold, yellow) attract customers and gain attention, but can be distracting and over stimulating ■Cool colors (white, blue, green) have a peaceful, gentle, calming effect The McGraw-Hill Companies, Inc./Lars Niki, photographer

18-39 Music ■Affects the pace of store traffic and is useful in creating a store image. ■A mix of classical or soothing music encourage shoppers to slow down, relax, and take a good look at the merchandise thus to stay longer and purchase more ■J.C. Penney – different music at different times of the day Jazzy music in the morning for older shoppers Adult contemporary music in the afternoon for year old shoppers ■U.S. firm Muzak supplies 400,000 shops, restaurants, and hotels with songs tailored to reflect their identityMuzak

18-40 Scent ■Has a positive impact on impulse buying behavior and customer satisfaction ■Pleasant scents are key ingredients in creating conditions that get consumers in the buying mood. ■A store should smell like it is supposed to smell The McGraw-Hill Companies, Inc./Gary He, photographer