Store Layout, Design and Visual

Merchandising - Principles &

Optimization
Learning Objectives

•List the elements of a store’s environment and

define.
•Discuss the steps involved in planning the store.
•Describe how various types of fixtures, merchandise
presentation methods and techniques, and the
psychology of merchandise presentation are used
to increase the productivity of the sales floor.
•Describe why store design is so important to a
store’s success.
•Explain the role of visual communications in a retail
store.
l

2
Introduction to Store Layout Management
•Store Image is the overall perception the customer has
of the store’s environment.
•L.L. Bean offers relaxed, classic apparel styles to its
customers. To help convey this image
 L.L. Bean’s catalogue and
Advertising reinforces their image.
 For cataloge customers, the catalog is
 the store environment.
•
•
•
• 3
Store Image

•By incorporating a
café as an integral
part of Barnes &
Noble bookstores, a
very relaxing and
casual ambiance is
created.

4
Introduction to Store Layout Management

•Space Productivity represents how effectively the

retailer utilizes its space and is usually measured by
sales per square foot of selling space or gross
margin Rs per square foot of selling space.
•Elements of the Store Environment
•Objectives of the Store Environment
•

5
Elements That Compose the Store Environment

Visual Communications
• Retail Identity Store Planning
Space Allocation
Graphics Layout
POS Signage Circulation
•

Store Image
And
Productivity

Store Design Merchandising

Exterior Design Fixture Selection
Ambiance Merchandise Presentation
Lighting Visual Merchandising

6
Retailing Truism

•The more
merchandise
customers are
exposed to, the more
they tend to buy.


7
Objectives of the Store Environment

•Tasks to create desired store image and increase

space productivity:
•Get customers into the store (market image).
•Convert them into customers buying merchandise
once inside the store (space productivity).
•Do this in the most efficient manner possible.
•Reduce Shrinkage
 Represents merchandise that cannot be accounted
for due to theft, loss, or damage.
•
8
Allocating Space

•Types of space needed:

•Back room
•Office and other functional spaces
•Aisles, services areas, and other nonselling areas of
the main sales floor
•Wall merchandise space
•Floor merchandise space



9
Allocating Space

l Warehouse clubs are able

to take advantage not only
of the width and depth of
the store, but also the
height, by using large
“warehouse racks”
l Space Productivity Index is
a ratio that compares the
percentage of the store’s
total gross margin that a
particular merchandise
category generates to its
percentage of total store
selling space used. 10
Merchandise Productivity Analysis

11
Positively influencing purchase
behavior

üAllow a transition zone

üPlace high-margin merchandise to the right of the
entrance
üMake merchandise accessible
üUse signs, fixtures, displays to draw customers
üAvoid the “butt-brush” effect
üVary the tempo of music to achieve goals
üArrange shelved merchandise strategically
Ref: Paco Underhill, Why We Buy: The Science of
Shopping
ü
Tradeoffs in Store Design

•Ease of locating merchandise for

planned purchases
•Aesthetics, space to shop
comfortably
•Relaxed environment

•Exploration of store,
impulse purchases
•Productivity of space
•Energy, excitement
Circulation: Grid Layout

14
Circulation

Grid Layout is a type of store layout in which counters

and fixtures are placed in long rows or “runs,” usually
at right angles, throughout the store.
Advantages

lLow cost
Disadvantages
lCustomer familiarity •Plain and uninteresting
lMerchandise exposure
• Limited browsing
•Stimulation of rushed shopping
lEase of cleaning behavior
lSimplified security
•Limited creativity in decor
lPossibility of self-service

15
Grid Layout
 Racetrack Layout
Major and minor loops with multiple entrances &
multiple sight lines,
lines draws shopper around the
store, encourages exploration, impulse buying

Location of departments)
departments men’s vs. women’s
impulse goods – near entrances, to the right, escalators, point-of-sale
demand/destination – upper floors, back corners; complementary –
adjacent
Display areas)
areas – bulk-of-stock + feature areas (walls, promotional areas, point- of-
sale areas, feature fixtures, windows)
Fixtures–
Fixtures feature fixtures – four-way, free-standing/mannequins, glass cases
+ gondolas, rounders & straight racks for bulk-of-stock & sale merchandise
Circulation

Free-Flow Layout is a type of store layout in which

l

fixtures and merchandise are grouped into free-

flowing patterns on the sales floor.
lAdvantages

lAllowance for browsing

•Disadvantages
and wandering freely
•Loitering encouraged
•Possible confusion
lIncreased impulse
•Cost
Waste of floor space
purchases •Difficulty of cleaning
•
lVisual appeal

lFlexibility

18
Free-Form (Boutique)
Layout + Aesthetically
pleasing, relaxing,
Storage,
Storage,Receiving,
Receiving,Marking
Marking asymmetrical, invites
browsing
- Less efficient, more
costly, more sales

Hats and Handbags

assistance needed,
more theft
Stockings

Tops
Accessorie

Checkout
Fixtures
•Bulk-of-stock
Bulk-of-stock -
straight racks,
s
Casual Wear

gondolas,
rounders (very

Tops
flexible)

Skirts and Dresses

Pants

Clearance •Feature
Feature – glass
Items cases, 4-way, free-
standing, custom-
built fixtures
Feature
Jeans

Feature areas
Windows, walls,
feature fixtures,
point-of-sale
Circulation: Loop Layout

20
Circulation
LO 2
l Loop Layout is a type of store layout in which a
major customer aisle begins at the entrance, loops
through the store, usually in the shape of a circle,
square, ar rectangle, and then returns the customer
the front of the store.
lAdvantages
lExposes customers to the greatest amount of
merchandise


21
Location of Merchandise -
Planograms (map – photos, drawings,
computer generated)

•vertical merchandising-
merchandising eye movement - left to right & down
•high margin merchandise - 15% below horizontal (51” - 53” & 56” - 58”)
•not alphabetical, “flank” new & private label with popular national
brands
Atmospherics
Inform; draw attention,
highlight merchandise,
dramatize, decorate
Sign
s Lighting
Color
Warm versus cool Pop merchandise, set
colors – attract/ a mood, downplay
hurry vs. relax; unsightly areas,
show accurate color
value vs. prestige Store Atmosphere
Scent Music
Easily changed - match
Most direct demographics,
effect on influence shopping
emotions and mood & crowd control
memory
Visual Merchandising

•Visual Merchandising
 Is the artistic display of merchandise and theatrical
props used as scene-setting decoration in the store.


24
Visual Merchandising is:

lShowing merchandise with the end purpose of making

a sale.
lPresenting an image of who/what the shopper can be
when using the merchandise displayed.
lMaking the shopper a “stopper” and a walk-in rather
than a walk -by.
lKeeping the interior presentation the same as what is
promised on the outside/in the window.
lA combination of skills including creativity, order,
artistic knowledge and understanding of store design.
Planning Fixtures and Merchandise Presentation

l On-Shelf Merchandising
 Is the display of merchandise on counters, racks,
shelves, and fixtures throughout the store.

26
Visual Merchandising

•Here’s sampling of the

techniques stores use
to generate those
sales: Get’m coming
and going.
Escalators are a focal
point of many stores.
That makes them
ideal locations for
promotional signs
and for impulse items
like perfume.


27
Visual Merchandising

•Lead them to
temptation.
Department-store
design incorporates a
gauntlet of goodies to
stimulate impulse
buys. Cosmetics, a
store’s most
profitable department,
should always be at
the main entrance to
the store.


28
Design Elements
lColor
lTexture
lLine
l
Color
lThe big attraction point
lColor psychology implications
lColor Schemes
–Analogous
–Complementary
–Split-Complementary
–Contrasting
–Monochromatic
–Neutral
–
Color Examples
Texture
lDefinition:surface treatment or
“feel” of merchandise
lImportant for backgrounds too
lMasculine/feminine
lRough/smooth
lNeutral
lWeight, Balance
Texture Examples
Line
lVertical
lHorizontal
lCurved
lDiagonal
lCan be used to bring initial attention to a
display by catching the eye or to sustain
attention within a display by moving the
eye around.
Line Examples
Design Principles
lBalance
lProportion
lRhythm/Repetition
lDominance/Emphasis
lContrast
lHarmony
Balance
lSymmetric
–Formal balance
lAsymmetric
–Informal balance
lRelates to weight,
texture, color
Proportion
lRelationship of
size, scale or
“weight” of
elements and
between elements.
lOften used to
create emphasis
and capture
attention.
lDon’t take size for
granted.
Rhythm/Repetition
lSelf-contained
movement within a
display.
lCreates path for
the eye.
–Dominant -->
subordinate
lLine
lRepeating motif
establishes
dominance and
movement.
Dominance/Emphasis
lObject which draws
the eye first.
–Focal point
lDirects viewers eye
(rhythm).
lCan be dominant
due to size, weight,
color, contrast, line
or repetition.
Contrast
lShowing a sharp
difference between
objects.
lEffective use = eye
“feels” object.
lAchieved through
texture, color, size,
directional
placement.
Harmony
lThe careful combination of principles
or elements to create a unified
whole.
lConsider storewide presentation or
image too.
Planning Fixtures and Merchandise Presentation

•Fixture Types
•Merchandise Presentation Planning
•Selecting Fixtures and Merchandise Presentation
Methods
•Visual Merchandising

43
Merchandise Presentation Planning

•Methods of Merchandise Presentation:

•

•Shelving
•Hanging
•Pegging
•Folding
•Stacking
•Dumping


44
Merchandise Presentation Planning

•Psychological Factors to Consider When

Merchandising Stores:
•

•Value/fashion image
•Angles and sightlines
•Vertical color blocking

45
45-Degree Customer Sightline

46
Vertical Color Blocking

47
Fixtures

lAccept, hold, stock and show

merchandise.
lUsed in window displays, on top of
counters, within floor arrangements.
lContribute to store brand image and
ambiance.
lExpected to last a long time.
Capacity Fixtures

lHold large
quantities
lShows a single
style in depth of
selection.
lUsually the largest
fixtures in the
store.
lUsually placed in
back of store.
Straight Rack
Four-Way Feature Rack and Round Rack

51
Rounder
Four-Way
Gondola
Feature Fixtures

lUsed to highlight
categories.
lHold fewer items.
lBest used as lead-
in fixtures.
lAlso interspersed
throughout store
to add variety.
Signature Fixtures

lOne-of-a-Kind units.
lPositioned at store or department
entrance.
lReflects brand image
lDesigned specifically for the store to
catch shoppers’ interest.
Ways to Display
lWindow Displays
lInterior Displays
lWall Assortment Displays
lFocal Point/Aisle End Displays
Window Displays
lClosed Back Window
lOpen Back Window
lStraight Front Window
lAngled Front Window
lArcade Front Window
lCorner Window
Window
Examples
 Other Display Methods
lInteriorWindows--create a scene
inside the store by grouping
mannequins, props etc.
lWall Cabinets--create “windows” by
showing merchandise on top.
lEnd of Aisle--displays assortment of
merchandise together for sale.
l
Display Examples
Display Types
lOne Item Display
lLine of Goods Display
lRelated Merchandise Display
lVariety or Assortment Display
Display Types
Examples
Display Settings

lRealistic
lEnvironmental
lVignette/Semirealistic
lFantasy
lAbstract
Display
Settings
Thank You !
 HBA Space Allocation by Mass Merchandisers

Total U.S. and by geographic region LO 2

Selected HBA categories
Average linear feet per store handling...

Total U.S. Eastern Central Southern Pacific

Headache/pain remedies 49.6 30.5 47.8 61.1 59.8

Vitamins 64.5 34.0 57.6 90.2 71.0
Contact lens solution 53.4 33.5 47.4 70.3 59.2
Diet aids 23.2 14.3 25.2 26.0 28.4
Pregnancy test kits 5.0 2.4 4.2 6.6 8.6
Laxatives 24.8 10.6 21.3 35.7 32.6
Contraceptives-male 11.8 7.2 9.9 12.8 26.8
Sanitary napkins 91.2 77.8 93.7 100.8 73.6
Tampons 26.3 24.8 26.4 26.0 31.4
Source: Neilsen Marketing Research 67
Shrinkage Prevention
LO 2
l One of the most important considerations when
planning the layout is visibility of the merchandise.

68
Visual Merchandising
LO 3
•Its all in the display.
When an item, such
as a watch or a scarf,
is displayed in a glass
case, it implies
luxury. An item in a
glass case with a lot
of space around it
implies real luxury.

69
Question to Ponder

•How do fixtures and merchandise presentation

interact to influence consumers in different types of
retailers?
l

70
Store Design
LO 4
•Ambience
 Is the overall feeling or mood projected by a store
through its aesthetic appeal to human senses.
l

71
Store Design
LO 4
•Storefront Design
•Interior Design
•Lighting Design
•Sounds and Smells: Total Sensory Marketing

72
Lighting Design
LO 4
•Crate & Barrel makes
effective use of
lighting to highlight
and feature
merchandise on
display.

73
Total Sensory Marketing
LO 4
•Crabtree & Evelyn
makes effective use
of fragrances and
odors to generate
smells that reinforce
its store ambiance.

74
Visual Communications
LO 5
•Name, Logo, and Retail Identity
•Institutional Signage
•Directional, Departmental, and Category Signage
•Point-of-Sale (POS) Signage
•Lifestyle Graphics

75
Directional, Departmental, and Category Signage

LO 5
•Directional and Departmental Signage are large
signs that are usually placed fairly high, so they can
be seen throughout the store.
•Category Signage are smaller than directional and
departmental signage and are intended to be seen
from a shorter distance; they are located on or
close to the fixture itself where the merchandise is
displayed.


76
Departmental Signage
LO 5
l Departmental signage
serve as the highest
level of organization
in an overall signage
program. These
signs are usually
large and placed fairly
high to they can be
seen throughout the
store.


77
Category Signage
LO 5
l Category signage
helps consumers
negotiate throughout
the store to find the
product categories
they are looking for.
The size of category
signage varies widely
from a lettering that is
a few feet in height to
merely inches.



78
Point-of-Sale (POS) Signage
LO 5
•Point-of-Sale Signage
 Is relatively small signage that is placed very close
to the merchandise and is intended to give details
about specific items.

79
Point-of-Sale (POS) Signage
LO 5
•POS signage for
clearance and sale
items tend to be in
red to draw a
consumer’s attention.


80
Lifestyle Graphics
LO 5
l The Limited uses
lifestyle graphics to
convey the image of
the product to the
consumer. Here the
Limited conveys the
casual nature of one
apparel line.


81
Visual Merchandising
LO 3
•Suggestion positioning.
Once the customer has
already purchased one
item, it’s easier to sell an
additional item. Thus
apparel retailers
strategically place
impulse buys like hair
bows and costume jewelry
by the cashier the same
way supermarket
checkouts display candy
and magazines.


82
 HBA Space Allocation by Mass Merchandisers

Total U.S. and by geographic region LO 2

Selected HBA categories
Average linear feet per store handling...

Total U.S. Eastern Central Southern Pacific

Creme rinse/conditioner 58.2 45.0 59.0 59.6 86.7
Deodorant 107.6 82.9 103.4 130.0 93.5
Face cream/lotion 21.9 18.2 20.7 24.8 24.9
Hand/body lotion 44.1 27.2 44.0 54.5 43.4
Hair colorings 57.7 52.6 51.4 66.2 61.1
Hair spray-women’s 69.2 39.8 55.5 102.5 59.0
Men’s toiletries 28.5 11.3 23.3 44.2 28.5
Oral antiseptics/rinses 55.3 36.6 49.4 76.0 39.5
Shampoo 82.3 63.5 80.5 95.8 81.3
Source: Neilsen Marketing Research
83
 HBA Space Allocation by Mass Merchandisers

Total U.S. and by geographic region LO 2

Selected HBA categories
Average linear feet per store handling...

Total U.S. Eastern Central Southern Pacific

Shaving creams 24.7 24.4 24.3 24.5 27.8

Suntan Lotion 45.7 37.0 38.0 59.9 41.4
Toothpaste 71.5 58.9 60.3 87.0 87.6
Acne remedies 31.3 16.3 29.7 39.7 42.6
Antacids 31.3 16.3 29.7 39.7 42.6
Cold remedies-adult 34.3 25.5 30.3 41.8 42.9
Cough syrup/tablets 13.0 9.9 11.9 15.2 16.7
Nasal spray/drops 7.1 4.0 6.6 9.6 6.0

Source: Neilsen Marketing Research

84
Visual Merchandising
LO 3
•Color is king.
Retailers believe
consumers are more
apt to buy clothes
that appear in full size
and color
assortments.

85
 Space Planning
Considerations
lHigh traffic & highly visible areas
–Entrances, escalators, check-out area, end aisles,
feature areas
üProfitability of merchandise
§Private brand, higher margin categories
üCustomer buying considerations
§Impulse products near front
§Demand/destination areas in back, off the beaten path
üPhysical characteristics of product
§Bulky vs. small/easily stolen
üComplementary products should be adjacent
üSales rate
§Display more units of fast-selling merchandise (tonnage
merchandising