Dr. Ron Lembke

 Design maximizes product exposure to customers, profitability per square foot  Decision variables  Store flow pattern  Allocation of (shelf) space to products  Types  Grid design  Free-flow design Video

Office Carts Check- out Grocery Store MeatBread Milk

Feature Display Table Trans. Counter Apparel Store

 “Prisoner” aisles make you enter store in a particular route, and pass by certain displays  Often contain less profitable (for the store) brands  “Decompression Zone” people walk past first rows of items before settling into shopping mode.

 Bakery, coffee shop, restaurant spread aromas by entrance to stimulate taste buds  Siren song of the Starbucks (Safeway)  Food samplers throughout store do same

 Frequently purchased items at far sides of stores so you have to go through entire store (produce or meat).  Profitable sections like produce placed where you keep running into them  Colorful, fresh produce affects opinions about store Milk Meat Produce Bread

 People follow perimeter pattern  Sale items on end – everyone sees  Half of a store’s profit comes from items on the perimeter  Breakfast cereal brings in the most dollars per square foot  Manufacturer incentives increase profitability of soft drinks  “Anchors” at ends of a section: milk and butter at opposite ends of dairy case

 Major items in middle of aisles so you have to walk down into middle of aisle (Cereal, peanut butter)  ‘Power items’ on both sides of aisle so you have to look at both sides Cereal Peanut Butter

 End caps for high- visibility sale items  Large quantities of inventory serve as “psychic stock”  If there is a lot of it, it must be on sale  Stimulates sales © 1995 Corel Corp.

 Eliminate cross- over aisles?  less wasted floor space,  you have to look at more items,  the more time you spend in the store, the more you buy.  Who wants to read signs?

Shelves: 3.5x3.25 = sq in. Store: 9*5.5 = 49.5 = 23% of store

 Computerized tool for shelf-space management  Generated from store’s scanner data on sales  Often supplied by manufacturer  Example: P&G 2 ft. 5 facings VO-5 SUAVE VO-5 PERT VO-5

 Companies prefer to be at eye-level or at child- reaching level  Close to leading brands or high-draw items: snack foods next to the peanut butter or across from the cereal:  Lots of kids visit the area

 Manufacturer pays retailer to get a product into a store  35,000 new grocery products per year  Grocery stores often stock 30,000 items  Impossible to evaluate all new products to choose the best new ones  Slotting fees guarantee grocer profits on a product, help balance risk of trying unknown product.  Grocery is a narrow margin business, slotting fees can represent a significant revenue source.

 Senate Small Business Committee held hearings on them in  Industry refused to cooperate with GAO.  Growers of produce (not just brand names) now getting involved and complaining.  Small businesses claim they can’t afford the big payments big companies can make.  Advocates say small companies can “put their money where their mouths are” just like anyone else

 Retail layout types: grid, free-flowing  Customer flow and most-frequently purchased items important considerations  Human factors extremely important in retail layouts  Buyer psychology, stimulate taste and smell  No backtracking,  Shelf position, as well as placement within store