122fcStore Layout RMM

8/7/2019 122fcStore Layout RMM

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AMITY BUSINESS SCHOOL

Pooja Sehgal TabeckRMM

Store Layout



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Store Design Objectives• Consistent with retailers image and

strategy

• Positive influence on customer satisfaction and purchase behavior

• Cost effective• Flexible

• Meet needs of disabled



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Store Layout Management

• Store Image is the overall perception thecustomer has of the store’s environment.

• Space Productivity represents how effectivelythe retailer utilizes its space and is usually

measured by sales per square foot of sellingspace or gross margin dollars per square footof selling space.





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Store Planning

• Allocating Space

• Circulation• Shrinkage Prevention



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Store Planning

• Microretailing - Occurs when a chain storeretailer operating over a wide geographic area,usually nationally, tailors its merchandise and

services in each store to the needs of theimmediate trading area.

• Stack-outs - Pallets of merchandise set out onthe floor in front of the main shelves.

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Consumer Behavior – Supermarket Style

Most Customers are not only right handed but also right headed

Stock national brand right of store brands so that consumer goes across

store brand to get the national brand

Display higher gross margin product on right side of the aisles

Put bakery product on right so as to make the customer hungry.

Supermarkets know hungry customer is the best customer

Most customers think neatness counts

‘Dump Displays’ are haphazard displays they give cheap looks

Great Bargain

Handwritten signs create the impression of recently lowered prices



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Most Customer are likely to focus on large central

display

Follow 25-25-50 rule

Of all endcaps 25% should have advertised sale

merchandise (that the customer will seek out)

Other 25% should be unadvertised sale items (that

causes customer to remain alert when looking at an

endcap)

Remaining 50% should be regular priced seasonal or impulse merchandise

Retailers tend to violate above rule when mfr. offer

rent for their displays



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Allocating

Space Starting point for developing a

floorplan is analysing how the

available store space measured

in square footage, should be

allocated for different

departments



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Types of space needed

Five Types: 1) Back Room 2) Office and other personal space 3)Aisles,

Service Areas 4) Wall Merchandise Space 5)Floor Merchandise space

Back Room:

Back Room is required to receive, process and hold inventory

This space varies with the type of retailer (50% in Department store,

10% in Specialty and Convenience store)

SCM practices with JIT has brought down back room space

Warehouse Clubs have only receiving areas but no back roomCartons of excess inventory is kept at higher levels (84”)

Retailer thus pays same rent for the sq. footage but use heights thus

using cubic footage

This stocking method interestingly creates low-cost image of the store



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Offices and other Functional Spaces

This includes break room, training/meeting room, cabin, bathroom facilities

This space gets lesser priority

Aisles, Service Areas and other Nonselling areas

Main aisles should be broad and should lead to smaller aisles like

herringbone structure

These aisles should be wide enough upto 15 ft.

Other non-merchandised area are dressing rooms, layaway areas, service

desks

Productivity – Merchandised area or non-merchandised area (Trade off ?)Floor Merchandise Space

Here, many different types of fixtures are used to display wide variety of

merchandise

Its just not to cram the largest amount but to place so that consumer canunderstand and sho



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Wall Merchandise Space

They serve as fixtures; holding tremendous amount of merchandise

Provide visual backdrop to the floor merchandise

Space Allocation Planning

20% of the inventory is not looked by the customer This stresses to know the productivity and profitability of all

merchandise

Two reasons for the space planning – 1)Revising the space allocation of

existing store OR planning a new store

One such measure is Space Productivity index

% age of total gross margin dollars for a particular merchandise

%age of space required by that merchandise=



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If the index is below 1 than category is underperforming

For Apparels the index is highest, for furniture- least (lesson?)

Underperforming categories sometimes have to be continued

Space Allocations for a new Store

In the absence of past data, space allocation is based on industry standards

Robert Kahn to Sam Walton – Store profitability is not the function of

adding more merchandise displays, but

Sales per square foot = f (Number of Customers) x (The length of time

they spend on the storeWal Mart then built ten 85,000 sq. ft. store and ten 1,15,000 sq. ft. store

Larger stores produced higher sales per square foot

Parking space was always full, showing shoppers were spending more

time



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Comfortable space should be there for the customers to pass through

the aisles

Myth: If customer is sitting down, he is not shopping.

Put at least one bench for the customer to rest

Put a water stand in the corner



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Space Planning Considerations

• High traffic & highly visible areas

– Entrances, escalators, check-out area, end aisles, feature areas

Profitability of merchandise

Private brand, higher margin categories

Customer buying considerations

Impulse products near front

Demand/destination areas in back, off the beaten path

Physical characteristics of product

Bulky vs. small/easily stolen Complementary products should be adjacent

Sales rate

Display more units of fast-selling merchandise (tonnagemerchandising



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Types of Store Layouts

• Grid• Racetrack

• Free Form

• Spine Layout



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Grid Layout

Long gondolas in repetitive pattern.

• Easy to locate merchandise

• Does not encourage customers to explore store

– Limited site lines to merchandise

• Allows more merchandise to be displayed

• Cost efficient

Used in grocery, discount, and drug stores.

Why?

122fcStore Layout RMM

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