CHAPTER 17 STORE LAYOUT, DESIGN, AND VISUAL MERCHANDISING ANNOTATED OUTLINE INSTRUCTOR NOTES • Recognizing the significant impact of store environment on shopping behavior on shopping behavior, retailers have devoted considerable resources to their store design and merchandise presentation. I. Store Design Objectives • When designing or redesigning a store, managers must meet five objectives. See PPT 17-3 Pick a store the students know and have them evaluate the store based on these objectives. A. Store Design and Retail 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. See PPT 17-4 For examples of retail store design strategies used abroad, see PPT 17-5 and 17-6 B. Influence on Consumer Buying Behavior • To meet the second design objective of influencing customer buying decisions, retailers concentrate on store layout and space planning issues. • The store design should: attract consumers to the store, enable them to easily locate merchandise of interest, keep them in the store for a long time, motivate them to make unplanned impulse purchases, and provide them with a satisfying shopping experience. • Customers' purchasing behavior is also influenced, both positively and negatively, by the store's atmosphere. • The influence of store design on buying behavior is increasing with the rise in two-income and single head-of-household families. Due to the limited time these families have, they are spending less time planning shopping trips and making more purchase decisions in stores. C. Flexibility • 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. • Fixtures are the equipment used to display merchandise. D. Cost See PPT 17-9 • The fourth design objective to consider is 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. E. Legal Considerations-Americans with Disabilities Act • A critical objective in any store design or redesign decision is to be in compliance with the 1990 Americans with Disabilities Act (ADA). • Besides providing for a nondiscriminatory work environment for the disabled, the 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-by-case Ask students to identify a store that would be inaccessible to a disabled person. See PPT 17-10 basis in federal courts around the United States. F. Design Trade-Offs • A store design rarely achieves all of the design objectives described above. Managers need to make trade-offs among them. • One common trade-off is between stimulating impulse purchases and making it easy to buy products. • Another trade-off occurs between making the shopping environment interesting and entertaining and making merchandise easy for customers to find. • One more trade-off is the balance between giving customers adequate space in which to shop and productively using the space for merchandise. See PPT 17-12 Ask students how often the design of a store influences their decision to shop at a particular store? II. Store Design • To design a good store layout, store designers must balance many objectives--objectives that often conflict. See PPT 17-13 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. A. Layouts • One method of encouraging customer exploration is to present them with a layout that facilitates a specific traffic pattern. • Another method of helping customers to move through the See PPT 17-14 store is to provide interesting design elements. • Today’s modern retailers use three general types of store layout design: grid, racetrack, and free- form. 1. Grid Layout • 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. • One problem with the grid layout is that customers typically aren’t exposed to all of the merchandise in the store. See PPT 17-15 for a description and illustration of the grid layout Ask students what is the best types of stores for a grid design and why. 2. Racetrack Layout • 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 See PPT 17-16 Ask students to give examples of different stores that have a "racetrack" design. What are the advantages and disadvantages? through the store, providing access to all the departments. • The racetrack design encourages impulse purchasing. 3. Free-Form Layout • 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 occurrence of theft, and the sacrifice of storage and display space. See PPT 17-18 for a description and illustration of the free-form layout Ask students why upscale specialty stores often use a free-form design. B. Signage and Graphics • Signage and graphics help customers locate specific products and departments, provide product information, and suggest items or special purchases. • Additionally, graphics, such as photo panels, can enhance the store’s image. • Retailer’s visual communications are used to: Ask students to discuss ways to enhance the effectiveness of a retailer’s signage. Can a retailer have too many signs? See PPT 17-19 and 17-20 • Identify the location of merchandise • Identify the types of products offered within a category • Describe special offers to entice customers into the store • Provide price and other information about a product at the point-of-sale • Create moods that encourage customers to buy products • Suggestions for effectively using signage are discussed on page 517. 1. Digital Signage • Many retailers are beginning to replace traditional signage with digital signage systems. • Digital signage is signs whose visual content is delivered digitally through a centrally managed and controlled network and displayed on a television monitor or flat-panel screen. The content delivered can range from entertainment to price information. • Digital signage provides a number of benefits over traditional signage for the retailer. See PPT 17-21 Ask students to develop a list of the benefits of digital signage. Do students even pay attention to digital signs? C. Feature Areas See PPT 17-22 • Feature areas are areas within a store designed to get the customer's attention. Ask students how often feature areas draw them into a retailer? 1. Entrances • The entry area is often referred to as the decompression zone because customers are making an adjustment to a new environment. This area provides the retailer its first opportunity to create a visual impression. 2. Freestanding Displays • Freestanding displays 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 department. 3. Cash Wraps • Cash wraps, also known as point-of-purchase (POP) counters or checkout areas, are places in the store 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. 4. 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. 5. Promotional Aisle or Area • A promotional aisle or area is an aisle or area used to display merchandise that is being promoted. 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. 7. 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. 8. Fitting Rooms • Today, retailers are recognizing the importance of fitting rooms as the crucial space in which customers decide whether to make a purchase. • Fitting rooms must be large, clean and comfortable. A fitting room that makes a person feel good also makes that shopper more likely to get in the mood to buy something. • Many fitting rooms today are equipped with technology that enhances the buying experience. Shoppers can check in-stock items and view accessory options. Some also offer customers the capability of e- mailing friends a photo of the outfit they are considering or viewing the outfit on a “virtual” model. III. Space Management • The space within stores and on the stores’ shelves and fixtures is a scarce resource. Space management thus involves: (1) the allocation of store space to merchandise categories and (2) the location of departments or merchandise categories in the store. A. Space Allocated to Merchandise Categories See PPT 17-23 • Retailers consider four factors when deciding how much floor or shelf space to allocate to merchandise categories and brands. 1. Space Productivity • A simple rule of thumb for allocating space is to allocate on the basis of merchandise sales. • In practice, retailers should allocate space to a merchandise category based on its effect on the profitability of the entire store. • Two commonly used measures of space productivity are: sales per square foot (for retailers that display most of their merchandise on freestanding fixtures) and sales per linear foot (for retailers displaying most merchandise on shelves). • A more sophisticated productivity measure, such as gross margin per square foot would consider the profits generated by the merchandise, not just the sales. 2. Inventory Turnover • Inventory affects space allocation in two ways. • First, both inventory turnover and gross margin contribute to GMROI. Merchandise categories with higher inventory turnover merit more space than merchandise categories with lower inventory turnover. • Second, the merchandise displayed on the shelf is depleted quicker for fast selling items with high inventory turnover so more space needs to be allocated to fast selling merchandise. 3. Impact on Store Sales • Retailers need to consider the allocation impact on the entire store. The objective of space management is to maximize the productivity of the store, not just a particular merchandise category or department. Ask students to consider situations in which the retailer might strategically want to “over-allocate” space to certain merchandise categories. 4. Display Considerations • Finally, the physical limitations of the store and its fixtures will necessarily affect space allocation. B. Location of Merchandise Categories and Design Elements • The location of merchandise categories plays a role in how customers navigate through the store. • By strategically placing impulse and demand/destination merchandise (products that customers have decided to buy before entering the store) throughout the store, retailers increase the chances that customers will shop the entire store and that their attention will be focused on the See PPT 17-26 merchandise that the retailer is most interested in selling. • The retailer’s entry area is often referred to as the decompression zone because customers are making an adjustment to the new environment. • Next, customers often turn right into the area referred to as the strike zone, a critical area because it creates the customers’ first impressions of the retailer. • From here, the most heavily trafficked and viewed area is the right-hand side of the store. 1. Impulse Merchandise • Impulse merchandise includes 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. 2. Demand Merchandise • Children's, expensive specialty goods, and furniture departments as well as customer-service areas like beauty salons, credit offices, and photography studios are usually located off the beaten Ask students where they would expect to find the travel and/or beauty salon (in an out-of-the-way location). path – in corners and on upper floors. • 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. 3. Special Merchandise • Some merchandise categories, for instance expensive, fragile items or highly personal items like lingerie, involve a buying process that is best accomplished in a lightly trafficked area. • Categories like furniture and appliances that require large portions of floor space are often located in less desirable areas. 4. Adjacencies • Retailers often cluster complementary products together to facilitate multiple purchases. Ask a student what he/she purchased on their last trip to a drug store. Assuming other customers purchase a similar market basket, the store could group these categories together. C. Location of Merchandise within a Category: The Use of Planograms • To determine where merchandise should be located within a department, retailers of all types generate maps known as planograms. 1. Planogram • 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. A sample planogram is shown in PPT 17-27 2. Videotaping Consumers • Some retailers are utilizing consulting firms to videotape consumers as they move through the store. These videos can be used to improve layouts and planograms by identifying the causes of slow-selling merchandise, such as poor shelf placement. • The videos allow retailers to learn where customers pause or move quickly. This information can help retailers decide whether the current layout is working or needing revision. 3. Virtual Store Software • Another tool used to determine the best place to put merchandise and test consumers’ responses to merchandise placement is virtual store software. IV. Visual Merchandising • Visual merchandising is the presentation of a store and its merchandise in ways that will attract the attention of potential customers. See PPT 17-29 A. 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 17-30 See PPT 17-31 See PPT 17-32 See PPT 17-33 • 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. • 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. • Gondolas are extremely versatile and used extensively in grocery and discount stores to display everything from canned foods to baseball gloves. See PPT 17-34 B. Presentation Techniques See PPT 17-35 1. Idea-Oriented Presentation • Some retailers successfully use an idea-oriented 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. See PPT 17-36 2. Style/Item Presentation • Organizing stock by style or item is probably the most common presentation technique. • Arranging items by size is a common method of organizing many types of merchandise, from nuts and bolts to apparel. 3. Color Presentation • This is a bold merchandising technique where products, especially seasonal fashion goods, are displayed at the same place. 4. 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. 5. 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. 6. 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. 7. 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. V. Atmospherics • 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. See PPT 17-37 A. Lighting • 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. See PPT 17-38 1. Highlighting 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. Mood Creation • 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 Harbor 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. Energy Efficient Lighting • As the price of energy soars and retailers and their customers become more energy conscious, retailers are looking for ways to cut their energy costs and be more ecological. • Retailers are switching from incandescent lighting to more energy efficient fluorescent lights. B. 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. See PPT 17-39 Have students choose two very different stores, like a men’s and a women’s clothing store, and compare the color schemes. C. Music • Music can either add or detract from a retailer's total atmospheric package. • Unlike other atmospheric elements, however, music can be easily changed. • Research has shown that the presence of music positively affects customers' attitudes toward the store. See PPT 17-40 Ask students if they are aware of stores that use music to their advantage/disadvantage. • 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. D. 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. See PPT 17-41 Ask students if they notice a scent in a store. Would they notice a pleasant scent or a foul scent more? E. How Exciting Should a Store Be? • The impact of the store’s environment depends on the customer’s shopping goals. The two basic shopping goals are task completion and recreation. • When customers are shopping to complete a task that they view as inherently unrewarding, they See PPT 17-42 want to be in a soothing and calming environment. • When customers are shopping for fun, they want to be in an exciting and engaging atmosphere. • This means retailers must consider the typical shopping goals for their customers when designing their store environments. VI. Web Site Design • Retailers should also consider design elements when creating their web sites. See PPT 17-43 and 17-44 Ask students to describe retail web sites they consider to be well and poorly designed. A. Simplicity Matters • It is not necessary to mention all merchandise available at the site on each page. It is better to present a limited selection tailored to the customer’s needs and then provide links to related merchandise and alternative assortments. B. Getting Around • The web site design should incorporate many local links internal to the site to help customers navigate easily. C. Let Them See It • The design should incorporate realistic colors and sharpness. D. Blend the Web Site with the Store • The design should visually reassure customers that they are going to have the same experience on the web site that they expect from the retailer’ stores. E. Prioritize • The site should be designed to advise the customer and guide them to the most important or promising choices, while ensuring their freedom to go anywhere that they please. F. Type of Layout • The design should strike a balance between keeping customers’ interests and providing them with a comfort level based on convention. G. Type of Layout • Physical stores recognize the peril of long checkout lines and take steps to alleviate the problem. • For Internet retailers, the problem of abandoned shopping carts is even more acute. Estimates indicate that as many as half of all online customers abandon their purchases during the checkout process. • Tips to lessen the abandoned cart problem include: • Making the process seem clear and simple • Closing off the checkout process • Making the process navigable with no threat of lost information • Reinforcing trust in the checkout process VII. Summary • Some objectives for a store design are to: (1) implement the retailer’s strategy, (2) influence customer buying behavior, (3) provide flexibility, (4) control design and maintenance costs, and (5) meet legal requirements. Typically a store cannot achieve all of these objectives, so managers make trade-offs among objectives such as providing convenience versus encouraging exploration. • Although a retailer’s Web site is different than its physical store, in many but not all cases, good design principles that apply to a physical store space can also be applied to a Web site. ANSWERS TO “GET OUT AND DO ITS” 2. INTERNET EXERCISE Go to the home page of CoolHunters (www.thecoolhunter.net). Look at examples posted in their retail subpage. How can this information of latest trends assist with store layout, design, and visual merchandising? The images on The Cool Hunter’s website change frequently. However, students will likely find images of retailers from around the globe that are creating unique retail environments by either repurposing items in unique ways or changing the customer experience. One example, posted in September, 2013 is of Mini M grocery in France. This grocery outlet uses pops of color to create happier feelings for customers. The grocer also stocks fewer items so the grocery store feels more open and less cluttered. These trends can be used by other retailers as a guide for how to improve the layout of their stores and respond to changing customer trends. 3. INTERNET EXERCISE VMSD is the leading resource for retail designers and store display professionals, serving the retail industry since 1869 (then called Display World). Go to their web page at http://vmsd.com and develop a list of three or four items that describes the latest trends in visual merchandising. Some items in the current trend watch: - Stores designed by famous architects - Digital technology has changed store designers’ tools, from pencils and T-squares to computer software and digital renderings - Lighting to help establish traffic patterns, mood and environment - Mannequins are a communication tool to sell the retailer’s brand and reinforce the store’s identity 4. INTERNET EXERCISE Go to the homepage for Envirosell (http://www.envirosell.com). How does this marketing research consulting firm support retailers by collecting consumer information to assist with store layout, design, and visual merchandising? From the company website: Observational Research - Real Time Observations: researchers “track” shoppers, recording specific behavior and pathways throughout the store/aisle/sections. - Videotaping: As a complement or a stand-alone methodology, video is used to capture behavior in and around the research area. Attitudinal Research - Shopper Interviews: immediately after shopping, respondents are intercepted. - Videotaped Shop-Along Interviews: researchers accompany shoppers, probe for and record immediate reactions. - Sales Associate Interviews: associates are interviewed (anonymously) and asked to share their insights, frustrations, and wish lists. - Focus Group PDT: within a traditional focus group, shoppers are led through a detailed Purchase Decision Tree to assess the actual thought process and influences of purchase planning. - Web-Based Interviews: key demographics and segmentations participate in online surveys. Customer Experience Analysis - In-Store Consulting: qualitative assessment in context of Envirosell’s 25 year knowledge base. - Competitor Store Audits: comparing and contrasting competitors through the Envirosell lens. - Mystery Shopping: trained researchers experience and measure any customer service process. - Ideation Sessions: using data collected via a client’s study and the collective Envirosell historical experiences, researchers lead sessions to kick off “next step” ideation and implementation. - Website analysis: in a one-on-one setting, on-line shoppers are “tracked” to capture real time use of sites and attitudes/perceptions throughout the process. 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 measure a local discount store’s floor plan and space productivity. Look back at Chapter 6 and decide which analytical tools and ratios you would use to assess the situation. 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. 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? How does this impact the types of fixtures used to display merchandise? Describe why some stores are more suited for a particular type of layout than others. The types of design used in the layout for a retail store are grid, racetrack, 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 racetrack 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. 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. 5. As an architect for retail space, you are responsible for Americans with Disabilities Act compliance. How would you make sure that a store’s retail layout meets both accessibility requirements and enables the company to reach profitability objectives? Students should become familiar with the report “Maintaining accessible features in retail establishments” at: http://www.ada.gov/business/retail_access.pdf. Store designs or redesigns decision must comply with the 1990 Americans with Disabilities Act (ADA). This law protects people with disabilities from discrimination in employment, transportation, public accommodations, telecommunications, and the activities of state and local government. It affects store design because the act calls for “reasonable access” to merchandise and services in retail stores that were built before 1993. Stores built after 1993 must be fully accessible. The Act also states that retailers should not have to incur “undue burdens” to comply with ADA requirements. Although retailers are concerned about the needs of their disabled customers, they are also worried that making merchandise completely accessible to people in a wheelchair or a motorized cart will result in less space available to display merchandise and thus reduce sales. However, providing for wider aisles and more space around fixtures can result in a more pleasant shopping experience for able-bodied as well as disabled customers. The ADA does not clearly define critical terms such as “reasonable access,” “fully accessible,” or “undue burden.” So the actual ADA requirements are being defined through a series of court cases in which disabled plaintiffs have filed class-action suits against retailers. Based on these court cases, retailers are typically required to (1) provide 32-inch-wide pathways in the main aisle, to bathrooms, dressing rooms, and elevators, and around most fixtures; (2) lower most cash wraps (checkout stations) and fixtures so they can be reached by a person in a wheelchair; and (3) make bathrooms and dressing rooms fully accessible. These accessibility requirements are somewhat relaxed for retailers in very small spaces and during peak sales periods such as the Christmas holidays. 6. What are the advantages and disadvantages of offering virtual dressing rooms from the retailers’ perspective? Virtual dressing rooms are advantageous for retailers because they provide additional services for customers including: size recommendations, body scanners, and fit adjustments. This ensures that the customer is being exposed to options of merchandise that best fit his/her needs. For many retailers, this will increase sales and also reduce the risk of returned merchandise. However, a major disadvantage, aside from the costs of the equipment, includes alienating some customers. Some customers might not be familiar with the technology and some customers might not agree with the fit or size recommendations. 7. Complete the table below to describe how different retail formats could use each of the following areas to enhance the store’s image and atmosphere. Area Drug Store Clothing Store Music Store Restaurant Entrance Walls Windows Merchandise Displays Cash Wrap Student responses will vary. This could be a good class or team discussion topic. 8. Re-read Retailing View 17.2, “Walmart Goes Green and Lowers Its Energy Costs”. Which environmental practices discussed do you think will be implemented by other retailers? Explain your response. Other stores will likely adopt most if not all of these environmentally friendly practices to lower costs and stay competitive: - More energy efficient stores - Reduce the amount of energy and natural resources required to operate and maintain a store - Reduce the amount of raw materials needed to construct a facility - Use, when appropriate, renewable materials to construct and maintain a facility - Wind turbine on top of a store to produces energy - Rainwater harvesting and treatment system - Grass varieties for landscaping that do not need irrigation or mowing - Energy efficient lighting, etc… 9. Reread Reailing View 17.3, “A Hedonic Maze Filled with Utilitarian Products.” What do you think about IKEA’s layout? Does it provide them with a competitive advantage? Explain your answer. Students’ answers will vary. Some students love IKEA because of the low costs and the feeling of satisfaction they get after they find the perfect item. However, other students may not like IKEA because of the confusion and the feeling of being trapped in the store. IKEA has increased its profits, especially in the United States, year over year. Clearly, IKEA is doing something that is a competitive advantage. The layout, combined with the low prices, might encourage customers to buy items they don’t need, especially because the item is, “only a few dollars.” Ask students to discuss their thoughts on the layout. Do they believe IKEA would be as successful with a different layout? 10. How can signage and graphics help both customers and retailers? Consider the following types of retail formats that you likely have visited in the past: discount store, department store, office super store, and a card and gift store. Describe which retail formats have implemented the best practices for coordinating signs and graphics with each store’s image and which formats should improve this aspect of their store layout, design, and visual merchandising. Students’ answers will vary based on their own experiences with various types of retailers. It is likely they will report larger, chain store retailers having more coordinated signage and graphics than smaller, independent stores. Talk about specific colors, designs, and styles of graphics that students have found to match particularly well with the retailer’s image such as Target’s bull’s eye. This is a good time to review the roles of signage and graphics including: helping customers to locate specific merchandise and departments, providing product information, and suggesting items and special purchases. In addition, note that graphics can add personality and beauty to the store’s image. Chapter 17 – Store Management Can employers hire on the basis of looks for retail sales positions? Yes, hiring for looks is an acceptable business practice versus No, hiring for looks is an acceptable business practice Format/Procedure • Break into 6 teams, 3 on each side of the issue. • Teams will have 10 minutes to prepare Opening Statements. • 5 minute Opening Statements from each side. State your position and give supporting arguments. • Teams will have 5 minutes to prepare for the Rebuttal. • 5 minute Rebuttals from each side. Respond to the opposition's Opening Statement. • Teams will have 5 minutes to prepare Concluding Statements. Incorporate the strongest points made in the Opening Statements and Rebuttals. This is a Summary and not a second Rebuttal. • 5 minute Concluding Statements from each side. • Individually answer the question: Where do you stand on this issue and why? Group Assignment In-Class Debate Yes No Opening 1 2 Rebuttal 3 4 Concluding 5 6 Take aways on debating • Begin by stating the side of the issue that you are discussing and then give supporting examples to illustrate • Summarize what was said before leaving the podium • Strengthen arguments by using “facts” such as direct quotes from article • Pose questions to the opposition to illustrate the weaknesses in their arguments Store Management – In-class Assignment Hiring for Looks Can employers hire on the basis of looks for retail sales positions? A. Opening statements Yes, hiring for looks is an ethical business practice No, hiring for looks is an unethical business practice. Can employers hire on the basis of looks for retail sales positions? B. Rebuttal Yes, hiring for looks is an ethical business practice No, hiring for looks is an unethical business practice. Can employers hire on the basis of looks for retail sales positions? C. Concluding statements Yes, hiring for looks is an ethical business practice No, hiring for looks is an unethical business practice. Can employers hire on the basis of looks for retail sales positions? Rank the three best presentations not including your own presentation 1= best Yes Opening Statement _______________ No Opening Statement _____________ Yes Rebuttal ______________ No Rebuttal ______________ Yes Concluding Statement ____________ No Concluding Statement ____________ Solution Manual for Retailing Management Michael Levy, Barton A. Weitz, Dhruv Grewal 9780078028991
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