Retail mangement presentation

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  • By Sarah Bauman
  • First discussion will be about store design objectives. Next, the elements of store design are discussed. Then the decisions about how much space to allocate to different merchandise categories and departments and where they should be located in the store. Concluding with how retailers use color, lighting, and music to enhance the customers shopping experience.
  • There are five store design objectives Implement the retailers strategy Build loyalty by providing a rewarding shopping experience Increase sales on a visit Control costs Meet legal requirements
  • The primary store design objective is to implement the retailers strategy. The design must be consistent with and reinforce the retailers strategy by meeting the needs of the target market and building a sustainable competitive advantage. Example: McDonalds
  • When customers consistently have rewarding experiences when patronizing a retailers store and/or Web site, they are motivated to visit the store Web site repeatedly and develop loyalty toward the retailer. Store design plays an important role in making shopping experiences rewarding. Customers seek two types of benefits when shopping-utilitarian and hedonic benefits.
  • Store design provides utilitarian benefits when it enables customers to locate and purchase products in an efficient and timely manner with minimum hassle. Utilitarian benefits are becoming increasingly important 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 shopping. Example: Whole Food stores
  • Store design provides hedonic benefits by offering customers an entertaining and enjoyable shopping experience. This shopping experience encourages customers to spend more time in a store because the visit itself is rewarding. Example: Cabelas
  • A third design objective is to increase sales made to customers on a visit. Store design has a substantial effect on which products customers buy, how long they stay in the store, and how much they spend during a visit. Since so little time and thought is spent shopping and selecting items in supermarkets, the purchase decisions are greatly influenced by what products customers see during their visit.
  • What they see is affected by the store layout and how the merchandise is presented. Thus retailers attempt to design their stores in a manner that motivates unplanned purchases.
  • The fourth design objective is to control the cost of implementing the store design and maintaining the stores appearance. The store design can also affect labor costs and inventory shrinkage. Some stores are organized into departments that are isolated from each other. This design provides an intimate and comfortable shopping experience that can result in more sales.
  • However, the design prevents sales associates from observing and covering adjacent departments. Another design consideration related to controlling cost is flexibility. As the merchandise mix changes, so must the space and the layout of the store. Store designers attempt to design stores with maximum flexibility. Flexibility affects the ability to physically modify, move, and store components and the costs of doing so.
  • Store design or redesign decisions 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 activities of state and local governments. It affects store design because the act calls for reasonable access to merchandise and services in retail stores built before 1993.
  • Stores built after 1993 must be fully accessible. The act also states that retailers should not have to incure 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 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.
  • 1) Provide 32-inch-wide pathways in the main aisle, to bathrooms, dressing rooms, elevators and most fixtures 2) Lower most cash wraps and fixtures so they can be reached by a person in a wheelchair 3) Make bathrooms and dressing rooms fully accessible
  • Three elements in the design of stores are Layout Signage Feature areas
  • Retailers use three general types of store layout designs: Grid Racetrack Free form
  • The grid layout has parallel aisles with merchandise on shelves on both sides of the aisles. Cash registers are located at the entrances/exits of the stores. The grid layout is well suited for customers who are primarily interested in the utilitarian benefits offered by the store. They want to easily locate products they want to buy, and make their purchases as quickly as possible.
  • The grid layout is also cost efficient. Theres less wasted space because the aisles are all the same width. Finally, because the fixtures are generally standardized, the cost of fixtures is low. One limitation, from the retailers perspective, is the customers typically arent exposed to all the merchandise in the store due to the height of the shelves. Thus the layout does not encourage unplanned purchases.
  • The racetrack layout, also known as a loop, is a store layout that provides a major aisle that loops around the store to guide customer traffic around different departments within the store. Cash register stations are typically located in each department bordering the racetrack. The racetrack layout facilitates the goal of getting customers to see the merchandise available in multiple departments and thus encourages unplanned purchases.
  • Low fixtures are used so that customers can see merchandise beyond the products displayed on the racetrack. To lead customers, the racetrack is wider than other aisles and defined by a change in flooring surface or color. Since many department store customers seek hedonic benefits, they typically spend more time shopping at department stores, and the more time they spend, the more they buy.
  • A free-form layout, also known as boutique layout, arranges fixtures and aisles in an asymmetric pattern. It provides an intimate, relaxing environment that facilitates shopping and browsing. However, creating this pleasing shopping environment is costly because there is no well-defined traffic pattern, as there is in the racetrack and grid layouts.
  • Customers arent naturally drawn around the store, and personal selling becomes more important to encourage customers to explore merchandise offered in the store. In addition, the layout reduces the amount of merchandise that can be displayed.
  • Signage and graphics help customers locate specific products and departments, provide product information, and suggest items or special purchases. Graphics, such as photo panels, can reinforce a stores image. Signage is used to identify the location of merchandise categories within a store and types of products offered in the category. Frequently, icons rather than words are used to facilitate communication with customers speaking different languages.
  • Smaller signs are used to identify sale items and provide more information about specific products. Finally, retailers may use images, such as pictures of people and places, to create moods that encourage customers to buy products.
  • 1. Category Signage used within a particular department or sector of the store, category signs are usually smaller than directional signs. Their purpose is to identify types of products offered; they are usually located near the goods to which they prefer.
  • 2. Promotional Signage This signage describes special offers and may be displayed in windows to entice the customer into the store. For example, value apparel stores for young women often display large posters in their windows of models wearing the items on special offer.
  • 3. Point-of-sale S