Principles of Retailing Assignment / Group Work

Semester 2, 2021

“Plan your store layout from a customer point of view (not your own!)”
Miriam simon.

Store layout is a significant factor driving consumer response in retailing. Store layout has its
own way to influence customer’s shopping. It is characterized by increasing competition and
more sophisticated, customers have gigantic expectations related to their consumption
experiences (Griffith, 2005).

 Write an essay on the Impact of retail Store design & layout on customer mind.
 form a group of MAX 4 students BUT not less than 3 students.
1- Write your literature review on the previous topic (800 words)
2- Use a case of a known retailer (600- 800 words)
3- Apply the wheel of retailing on this same retailer (max 200 words)
4- Prepare for your presentations

 Deadline: 4th of APRIL 2021 through E-learning

 All group members should present in the presentation
Although the retail industry is transforming as technology continues to shape the
consumer landscape, the primary goals of a sound retail strategy have not changed:
Deliver value in the supply chain and create a unique customer experience. The
rebirth of retail stores — after years of digital disruption and economic challenges —
is possible if retailers can successfully contend for their consumers’ attention, and in
return, earn their business. One way to do this is to design a digital and physical
retail environment that captures the overtaxed attention of consumers today.

In this article, you’ll learn about how retail customers predictably behave, why this
behavior matters, and how you can influence it with a thought out store layout
design. Use the navigation guide on the left to find a collection of essential retail floor
plans and discover the pros and cons of each. If you’re ready to plan and design
your store, jump ahead to the tips and best practices from professional retail
designers, and browse through the design resources to help you imagine and create
a new environment that captures your customer’s attention. 

 Customer Flow: This is the pattern of behavior and way that a customer

navigates through a store. Understanding customer flow and the common
patterns that emerge when customers interact with merchandise based on the
store layout is critical to retail management strategy. Physical retailers are
able to track this using analytics software and data from in-store video and the
wifi signal from smartphones. For example, solution providers like RetailNext
provide shopper analytics software for retailers to understand flow and
optimize the customer experience based on in-store video recordings. The
technology also exists to track the digital customer flow and online shopping
behavior. Using “cookies” and other software, online retailers can track
customer behavior, including how customers interact with their website.  

While the exterior retail store layout includes exterior store design and customer
flow, it also includes the following factors:

 Geographic location of the retail store (real estate)

 Size of the building and length of the walkways accessible from the entrance
and exit
 Use of furniture and exterior space for people to gather and interact
 Style of architecture of the retail building
 Color of paint and choice of exterior building materials 
 Design of the physical entrance and exterior window displays

The objective of retail store design is to positively impact customer experience and
create value, which is the primary goal of retailers in the supply chain.
https://www.smartsheet.com/store-layout

Top Store Layout Design Strategies that Impact the Customer Experience

Moving merchandise from the end of the supply chain to the customer is a retailer's
primary function. Successful retailers do so by creating value and delivering a
differentiated customer experience. How customers experience your merchandise is
determined by how your store is designed to guide them to interact with it. A retail
management strategy that successfully leverages store design to drive customer
flow and create unique experiences is a big part of your overall retail brand. It is a
proven method for producing the kind of value that keeps retailers competitive and
profitable.

Allison Walzer, Sr. Retail Channel Marketing Manager at Microsoft, believes store
design is a direct reflection of your brand and a vital part of staying competitive with
e-commerce trends.

“One of the main challenges for stores is how they will stand out from competitors
and a busy [retail] marketplace,” says Walzer. “How do they create the convenience
and experience to drive customers to come into the store?”

“Store design really has to stand out from the pack right now,” she says. “It’s crucial
for brick- and-mortar stores to create experiences that encourage people to visit stores.”

Zone Merchandising Strategy 

Customers also respond to where products are placed. A zone merchandising

strategy combines visual merchandising with your store layout design to highlight
high-margin merchandise or merchandise you want featured. Creating zones using
walls, merchandise displays, and signage develops semi-separate areas.
Merchandise displays are set up as speed bumps to keep the customer in the zone
and slow them from leaving the area. 

Lighting Strategy

Proper lighting is more than just making sure the customer can see and interact with
the merchandise. When done well, light can help structure and influence the
customer’s mood while shopping. 

Store planners and designers use lighting solutions to highlight or downplay specific
areas of the store to draw in customers and create an environment that works in
sync with the retail brand and the merchandise offered. Lighting specialists provide
expertise in the appropriate types of lighting for specific store layouts, based on
natural light exposure, and can recommend solutions that suit budgets and
environmentally conscious business models.
Signage Strategy

Signs serve multiple purposes for retailers. They are the graphic representation of
the retailer's brand and merchandise. Signs provide product information for specific
merchandise, help customers navigate the store layout efficiently, and create the
desired price perception. Retailers should keep signs fresh and updated based on
the merchandise offered, the season, or specific promotions. Keep in-store signs and
messaging consistent with the brand voice and use standard fonts and colors that
are easy to identify and read with your lighting. 

Display Strategy 

Careful selection of the type and placement of displays is crucial to the overall retail
strategy of using space management and store design to influence customer flow
and in-store behavior. Also, treat displays as flexible, cost-effective investments and
ask your product manufacturers and suppliers about providing low-cost options
specific to their products and brands.

Communal Design Strategy 

Concentrate on how to create community and engagement with store design. “What
makes a consumer want to come and repeatedly spend time in a retail store in the
digital age will be based on the feeling you get when you are shopping,” says
Walzer. “Create a rapport with the customer, pull in elements from the community as
part of the design inspiration. If there is a local artist or ceramist or musician, use
those pieces in the stores.” Walzer mentions the Seattle-Tacoma International
Airport showcasing Sub Pop artists and Pearl Jam artwork as an example. “[They]
are currently doing a great job. It’s creating pride for residents and a sense of joy for
travelers, who are also customers that purchase Sub Pop gear at the store.”  

Retailer Reason: To make sure customers who are only looking to buy
staples like milk and bread also have to pass by lots of other goods that
have higher margins. The hope is they will purchase more items than they
came into the store to buy (note: in some cases heat at the entrance of the
store may also be a consideration). 
Consumer Issue: We all occasionally need to go to the store simply
because we’re out of bread or milk. Why do they make us run the gauntlet
through sets of drill bits and fun-size chocolates to get there?
There’s a small newsagents type store next to my local supermarket and I
recently asked the owner what his main revenue drivers were. Despite their
location and higher prices, both milk and bread were in the top 5 highest-
grossing items. This suggests to me that the supermarket is missing a trick
in creating an effective customer journey.
A good example of the successful application of this process is the
Korean automobile manufacturer Hyundai.  Long a major
industrial giant in its native South Korea, Hyundai was founded in
1947 as a construction company before eventually expanding and
branching out to become its country’s largest automobile
manufacturer.  The Hyundai Group, the conglomerate that
founded that Hyundai Motor Company during the mid-1960s,
entered the highly competitive U.S. automotive market in 1986,
offering inexpensive, mostly low-end cars.  As it established itself
in the United States, it rapidly introduced higher-end automobiles
that remained economically competitive.  Today, the Hyundai
Motor Company is a major presence in the U.S.

https://www.enotes.com/homework-help/explain-wheel-retailing-
theory-cite-two-examples-465377

Japanese automobile manufacturers made similar transitions in

the U.S. market, although under slightly different circumstances. 
Prior to the energy crisis of the late 1970s, Japanese
automobiles, mainly Datsun (later changed to Nissan), Toyota
and Honda were all cheaply made and inexpensive subcompact
cars competing for the low-end American market, which was
dominated by large family cars produced by the so-called Big
Three, Chrysler, General Motors and Ford.  The dramatic (by U.S.
standards) rise in gasoline prices during the late 1970s and early
1980s suddenly created a market for smaller, more fuel-efficient
cars.  The Japanese quickly and efficiently responded to the
changed American market with vastly improved products.  As the
energy crisis dissipated and American tastes returned to larger
cars, the Japanese companies kept pace with their own larger –
and more expensive – options.  By the mid-1980s, they were
introducing their own lines of luxury automobiles under different
names, for example, Honda introduced the Acura line, while
Nissan introduced its Infiniti brand and Toyota kept pace with its
Lexus line of luxury cars.

There are also unsuccessful examples of retailers attempting to

ride the “wheel of retailing.”  K-Mart has made a number of
attempts at breaking out of its reputation as a low-end chain by
attempting to market more upscale lines of clothing.  Most
recently, J.C. Penny’s has attempted to refine its image and
appeal to more affluent consumers by changing its stores’ interior
design and calling itself “JCP.”  Whether JCP will prove a
successful transition remains to be seen, as the broader
macroeconomic climate remains tenuous.
Fred Bloggs – opens a new restaurant in a temporary location. He calls it Bloggs
Meals and offers a number of limited items at very low prices. As soon as the
construction of the premises is completed, Fred begins introducing greater variety
and offers several new services, including free home delivery, as well as bed and
breakfast.

As Bloggs Meals builds up a brand image and becomes more established, Fred

begins to raise prices on his earlier items. He does this to recover the fixed costs
rapidly so that he may have an early break-even.

However, a couple of years later, a new restaurant enters the scene and begins to
offer the same items as Bloggs Meals, but at very low prices. In order not to lose
customers, Fred will have to reduce his prices back to what they were earlier.

Fred has moved right round the ‘wheel of retailing’.

https://marketbusinessnews.com/financial-glossary/wheel-retailing-definition-
meaning/

https://www.smartsheet.com/store-layout

https://www.slideshare.net/AshishChate/impact-of-retail-store-design-and-layout-on-
consumer-1#:~:text=The%20layout%20of%20a%20retail,and%20more%20positive
%20consumer%20outcomes.

https://servicedock.com/3-ways-store-layout-decisions-impact-on-customer-
experience/

https://ir.dut.ac.za/bitstream/10321/467/1/Tlapana_2009.pdf

https://ukdiss.com/examples/competition-in-the-world.php