Store Layout,

CHAPTER 17 Design, and

Visual
Merchandising
STORE DESIGN OBJECTIVES
Some store design objectives are to
(1) implement the retailer’s strategy,
(2) build loyalty by providing a rewarding shopping experience,
(3) increase sales on a visit,
(4) control costs, and
(5) meet legal requirements.
IMPLEMENT THE RETAIL
STRATEGY
The primary objective for store design is to implement the
retailer’s strategy.
The design must be consistent with and reinforce the retailer’s
strategy by
1. meeting the needs of the target market and
2. building a sustainable competitive advantage.
For example, Starbucks’ store designs are inspired by the Italian
coffee bars that not only have great coffee, but also serve as a
place to meet friends, socialize, and relax.
Soft lighting, wood tables, comfortable seating, free wi-fi, and
clean bathrooms make Starbucks a place where people just want to
hang out and have a good cup of coffee.
BUILD LOYALTY
When customers consistently have rewarding experiences, they
are motivated to visit repeatedly and develop loyalty toward the
retailer
Store design provides utilitarian benefits when it enables
customers to locate and purchase products in an efficient and
timely manner with minimum hassle.
Store design provides hedonic benefits by offering customers an
entertaining and enjoyable shopping experience.
Of course, few retailers can offer only utilitarian or hedonic
benefits. Most need to use both routes to ensure customer
loyalty.
INCREASE SALES ON VISITS
A third design objective is to increase the sales made to customers
on any particular 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.
Because most consumers spend very little time and thought on
shopping and selecting items in supermarkets, these purchase
decisions are greatly influenced by what products customers see
during their visit.
What they see in turn 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 purchase
CONTROL COSTS TO
INCREASE PROFITS
The fourth design objective is to control the cost of implementing
the store design and maintaining the store’s appearance.
Store designs can also affect labor costs and inventory shrinkage.
Some stores are organized into isolated departments, which
provides an intimate, comfortable shopping experience that can
result in more sales.
However, the design prevents sales associates from observing and
covering adjacent departments, which makes it necessary to have
at least one sales associate permanently stationed in each
department to provide customer service and prevent shoplifting
CONTROL COSTS TO
INCREASE PROFITS
Another design consideration related to controlling cost is
flexibility.
Retailing is a very dynamic business. Competitors enter a market
and cause existing retailers to change the mix of merchandise
offered.
As the merchandise mix changes, so must the space allocated to
merchandise categories and the layout of the store. Thus, store
designers attempt to design stores with maximum flexibility
The key to providing this flexibility often lies in innovative fixture
and wall systems that portion off the textbook area.
Fixtures refer to the equipment used to display merchandise.
LEGAL CONSIDERATIONS
All store design and redesign decisions must comply with the legal
rules and regulations where they operate.
Store designs need to be in accordance with disability act as well
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
DESIGN TRADE-OFFS
Few store designs can achieve all of these objectives, so any store design
involves trade-offs among the objectives.
Retailers often make trade-offs between stimulating impulse purchases
and making it easy to buy products.
For example, supermarkets place milk, a commonly purchased item, at
the back of the store to make customers walk through the entire store,
thus stimulating more impulse purchases. Realizing that some customers
may want to buy only milk, Walgreens places its milk at the front of the
store, enabling it to compete head-to-head with convenience stores.
The trade-off between making it easy to find merchandise and providing
an interesting shopping experience is determined by the customer’s
shopping needs
DESIGN TRADE-OFFS
Another trade-off is the balance between giving customers
adequate space in which to shop and productively using this scarce
resource for merchandise.
Customers are attracted to stores with wide aisles and fixtures
whose primary purpose is to display rather than hold the
merchandise.
Also, shoppers do not like it when a store is so cramped
STORE DESIGN ELEMENTS
Three elements in the design of stores are the
(1) layout,
(2) signage, and
(3) feature areas
LAYOUTS
Retailers use three general types of store layout design: grid, racetrack,
and free form. Each of these layouts has advantages and disadvantages.
Grid Layout
The grid layout, illustrated in Exhibit 17–1, 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 they make
their purchases as quickly as possible.
Most supermarkets and full-line discount stores use the grid layout
LAYOUTS
The grid layout is also cost-efficient.
There’s less wasted space with the grid layout than with other
layouts because the aisles are all the same width and designed to
be just wide enough to accommodate shoppers and their carts
One limitation of the grid layout, from the retailer’s perspective, is
that customers typically aren’t exposed to all the merchandise in
the store because, due to the height of the shelves, they see only
products displayed in the aisle they are in. Thus the layout does not
encourage unplanned purchases.
LAYOUTS
Racetrack Layout
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.
It facilitates the goal of getting customers to see the merchandise available
in multiple departments and thus encourages unplanned purchasing. As
customers go around the racetrack, their eyes are forced to take different
viewing angles rather than looking down one aisle, as in the grid design. Low
fixtures are used so that customers can see merchandise beyond the
products displayed on the racetrack.
The racetrack usually is wider than other aisles and defined by a change in
flooring surface or color. For instance, the aisle flooring might be marblelike
tile, whereas the department floors vary in material, texture, and color,
depending on the desired ambience.
LAYOUTS
Free-Form Layout
A free-form layout, also known as boutique layout, arranges fixtures
and aisles in an asymmetric pattern (Exhibit 17–4).
It provides an intimate, relaxing environment that facilitates shopping
and browsing. It appears most commonly in specialty stores or as
departments within department stores.
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 aren’t naturally drawn around the
store or department, and personal selling becomes more important to
encourage customers to explore merchandise offered in the store
SIGNAGE AND GRAPHICS
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 store’s image.
Signage is used to identify the location of merchandise categories
within a store and the types of products offered in the category.
The signs are hung typically from the ceiling to enhance their
visibility
Some different types of signs are:
• Call-to-action signage. Placed in strategic locations in the store
can convey how, where, and why to engage with the retailer via QR
codes on customers’ cellphones, via e-mail, short-message
SIGNAGE AND GRAPHICS
• Category signage. Used within a particular department or sector of the
store to identify types of products offered. They are usually located near
the goods to which they refer.
• Promotional signage. Describes special offers and found within the
store or displayed in windows to entice the customer into the store. For
instance, value apparel stores for young women often display large
posters in their windows of models wearing new or sale items.
• Point-of-sale signage. Point-of-sale signs are placed near the
merchandise they refer to so that customers know its price and other
detailed information. Some of this information may already be on product
labels or packaging.
Walmart uses this sort of signage effectively to show customers when the
price of an item has been “rolled back.”
SIGNAGE AND GRAPHICS
Digital Signage
Many retailers are replacing traditional signage with digital
signage systems.
Digital signage includes signs whose visual content is delivered
electronically through a centrally managed and controlled network,
distributed to servers in stores, and displayed on flat-panel screens.
The content delivered can range from entertaining video clips to
simple price displays.
Digital signage provides a number of benefits over traditional
static-print signage. Due to their dynamic nature, digital signs are
more effective in attracting the attention of customers and helping
them recall the messages displayed.
SIGNAGE AND GRAPHICS
Because the content is delivered digitally, it can easily be tailored
to a store’s market and remain consistent in every store, displayed
at the right time and right place
FEATURE AREAS
Feature areas are the areas within a store that are designed to get
customers’ attention.
They include windows, entrances, freestanding displays,
mannequins, end caps, promotional aisles or areas, walls, dressing
rooms, and cash wraps.
Windows
Window displays draw customers into the store and provide a
visual message about the type of merchandise offered in the store
and the type of image the store wants to portray.
Research suggests that storefront window displays are an effective
tool for building the store image, particularly with new customers
who are unfamiliar with the store
FEATURE AREAS
Entrances
The first impression caused by the entry area affects the customer’s
image of the store.
Department stores typically have the cosmetics and fragrance categories
at the main entrance, while grocery stores have fresh produce because
these categories are visually appealing and create a sense of excitement.
While the entry area plays a prominent role in creating an image, the first
10 feet of the store are often referred to as the “decompression zone,”
because customers are making an adjustment to the new environment:
escaping from the noisy street or mall, taking off their sunglasses, closing
their umbrellas, and developing a visual impression of the entire store.
FEATURE AREAS
Customers are not prepared to evaluate merchandise or make
purchase decisions in the decompression zone, so retailers try to
keep this area free of merchandise, displays, and signage
Mannequins
A mannequin is a life-size representation of the human, used for
displaying apparel.
They can help personify a brand, push customers to enter their
stores, and perhaps even offer an ideal image that encourages
shoppers to buy a little something extra that looks great on display.
FEATURE AREAS
End Caps
End caps are displays located at the end of an aisle in stores using a
grid layout. Due to the high visibility of end caps, sales of a product
increase dramatically when that merchandise is featured on an end cap.
Thus, retailers use end caps for highermargin, impulse, and sale
merchandise. In the supermarket industry, vendors often negotiate for
their products to be on end-cap displays when they are offering special
promotional prices
Promotional Aisle or Area
A promotional aisle or promotional area is a space used to display
merchandise that is being promoted.
FEATURE AREAS
Walls
Because retail floor space is often limited, many retailers increase
their ability to store extra stock, display merchandise, and creatively
present a message by utilizing wall space.
Merchandise can be stored on shelving and racks and coordinated
with displays, photographs, or graphics featuring the merchandise.
Dressing Rooms
Are critical spaces, where customers often decide whether to
purchase an item.
Large, clean, and comfortable dressing rooms put customers in the
mood to buy.
FEATURE AREAS
Virtual dressing rooms are becoming more important and
interesting to online shoppers.
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.
Because many customers go to these areas and wait in line to
make a purchase, retailers often use them to display impulse
purchase items.
For example, in supermarkets, batteries, candy, gum, and
magazines are often shelved at the checkout counter.
SPACE MANAGEMENT
The space within stores and on the stores’ shelves and fixtures is a
scarce resource. Space management involves key resource
decisions:
(1) the allocation of store space to merchandise categories and
brands,
(2) the location of departments or merchandise categories in the
store, and
(3) the size of the store.
SPACE ALLOCATED TO
MERCHANDISE CATEGORIES
Some factors that retailers consider when deciding how much floor
or shelf space to allocate to merchandise categories and brands are
(1) the productivity of the allocated space,
(2) the merchandise’s inventory turnover,
(3) the impact on overall store sales, and
 (4) the display needs for the merchandise.
SPACE PRODUCTIVITY
A simple rule of thumb for allocating space is to allocate on the basis of
the merchandise’s sales.
For example, if artificial plants represent percent of the total expected
sales for a hobby and craft retailer, then percent of the store’s space is
allocated to artificial plants.
Two commonly used measures of space productivity are sales per square
foot and sales per linear foot.
Apparel retailers that display most of their merchandise on freestanding
fixtures typically measure space productivity as sales per square foot.
In supermarkets, most merchandise is displayed on shelves. Because the
shelves have approximately the same width, only the length, or the linear
dimension sales per linear foot, is used to assess space productivity
INVENTORY TURNOVER
Inventory turnover affects space allocations
Merchandise categories with higher inventory turnover merit more
space than merchandise categories with lower inventory turnover.
Merchandise displayed on the shelf is depleted more quickly for
items with high inventory turnover.
More space needs to be allocated to this fast-selling merchandise
to minimize the need to restock the shelf frequently and reduce
stockouts.
Many retailers, however, compensate for high inventory turnover
items by assigning them more frequent deliveries so they don’t
take up so much space.
DISPLAY CONSIDERATIONS
The physical limitations of the store and its fixtures affect space
allocation.
Of course, store planners must provide enough merchandise to fill
an entire fixture dedicated to a particular item.
But in addition, a retailer might decide it wants to use a
merchandise display to enhance its image
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
The location of merchandise categories also plays a role in how
customers navigate the store.
Demand/destination merchandise :refers to products that customers
have decided to buy before entering the store.
As customers enter the store and pass through the decompression zone,
they are welcomed with introductory displays, including graphics.
Once through the decompression zone, they often turn right (in Western
cultures) and observe the prices and quality of the first items they
encounter. This area, referred to as the “strike zone,” is critical, because it
creates the customer’s first impression of the store’s offering.
Thus, retailers display some of their most compelling merchandise in the
strike zone.
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
Impulse Merchandise: The prime store locations for selling
merchandise are heavily trafficked areas such as 10 feet beyond
the entrance on the right side of the store and areas near
escalators and cash wraps.
Thus, impulse products, or products that are purchased without
planning, such as fragrances and cosmetics in department stores
and magazines in supermarkets, are almost always located near
the front of the store, where they’re seen by everyone and may
actually draw people into the store.
Demand merchandise and promotional merchandise: are often
placed in the back left-hand corner of the store.
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
Placing high-demand merchandise in this location pulls customers
through the store, increasing the visibility of other products along
the way.
So supermarkets typically put items almost everyone buys— milk,
eggs, butter, and bread—in the back left-hand corner.
Special Merchandise: Some merchandise categories involve a
buying process that is best accomplished in a lightly trafficked area.
Categories that require large amounts of floor space, like furniture,
are often located in less desirable locations.
Some categories, like curtains, need significant wall space,
whereas others, like shoes, require easily accessible storage rooms
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
Category Adjacencies: Retailers often put complementary
categories next to each other to encourage unplanned purchases.
Thus at the end of the cereal aisle, grocery shoppers often find an
end cap filled with fresh bananas, and audio cables tend to hang on
a display near the section featuring sound systems in an electronics
store.
Such displays help encourage cross selling
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
Some tools that retailers use to make decisions on the positioning of
items in a category are planograms, virtual-store software, and
videotapes of consumers as they move through the store.
Planograms: A planogram is a diagram that shows how and where
specific SKUs should be placed on retail shelves or displays to
increase customer purchases.
The locations can be illustrated using photographs, computer
output, or artists’ renderings.
In developing the planogram, the retailer needs to make the
category visually appealing, consider the manner in which customers
shop (or the manner in which it would like customers to shop), and
work to achieve its strategic and financial objectives
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
Virtual-Store Simulation: are another tool used to determine the effects of
placing merchandise in different areas of a store and evaluating the profit
potential for new items.
In these simulations, customers sit in front of computer screens that
depict a store aisle. Retina-tracking devices record the eye movements of
the customers.
Videotaping Consumers Another research method used to assess
customer reactions to planograms involves tracking customers in actual
store environments.
Thus, retailers can unobtrusively track the amount of time people spend
in front of a shelf, which products they touch or pick up, the products they
return to shelves, and finally what they add to their carts to purchase.
LOCATION OF MERCHANDISE
CATEGORIES AND DESIGN
ELEMENTS
The data gathered can be used to improve layouts and planograms
because they can identify causes of slow-selling merchandise, such as
poor shelf placement.
Determining Store Size
A key space management decision is deciding how big the store should
be.
With increase in online formats stores have marginally reduced their
area
Customers face reduced selection, decreased comfort, and little
entertainment. Smaller formats mean there is no room for communal
dressing rooms, entertaining digital displays, or wide aisles that
facilitate browsing.
VISUAL MERCHANDISING
Visual merchandising is the presentation of a store and its
merchandise in ways that will attract the attention of potential
customers.
FIXTURES
The primary purposes of fixtures are to efficiently hold and display
merchandise. At the same time, they define areas of a store and
direct traffic flow.
Fixtures work in concert with other design elements, such as floor
coverings and lighting, as well as the overall image of the store.
For instance, in stores designed to convey a sense of tradition or
history, customers automatically expect to see lots of wood rather
than plastic or metal fixtures. Wood mixed with metal, acrylic, or
stone changes the traditional orientation.
Apparel retailers utilize the straight-rack, rounder, and fourway
fixtures, while the principle fixture for most other retailers is the
gondola.
FIXTURES
A rounder, also known as a bulk fixture 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 crossbars
that sit perpendicularly on a pedestal. This fixture holds a large amount
of merchandise and allows the customer to view the entire garment. The
four-way is harder to maintain properly than is the rounder or straight
rack, however.
A gondola is an island type of self-service counter with tiers of shelves,
bins, or pegs. Because they are extremely versatile, they are used
extensively, but not exclusively, in grocery and discount stores to display
everything from canned foods to baseball gloves. Gondolas are also
found displaying towels, sheets, and housewares in department stores.
PRESENTATION TECHNIQUES
Some presentation techniques are idea-oriented, item and size, color,
price lining, vertical merchandising, tonnage merchandising, and
frontage presentation.
Idea-Oriented Presentation
A method of presenting merchandise based on a specific idea or the
image of the store. Individual items are grouped to show customers how
the items could be used and combined.
Item and Size Presentation
Probably the most common technique of organizing stock is by style or
item. Discount stores, grocery stores, hardware stores, and drugstores
employ this method for nearly every category of merchandise, as do
many apparel retailers.
PRESENTATION TECHNIQUES
Color Presentation
A bold merchandising technique is organizing by color. For
instance, Ralph Lauren stores often have entire collections in one
color hue, all merchandised together.
Price Lining
Price lining occurs when retailers offer a limited number of
predetermined price points and/or price categories within another
classification that are merchandised together. This approach helps
customers easily find merchandise at the price they wish to pay
For instance, men’s dress shirts may be organized into three
groups selling for $49, $69, and $99
PRESENTATION TECHNIQUES
Vertical Merchandising
In this approach, 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.
Stores can effectively organize merchandise to follow the eye’s
natural movement. Retailers take advantage of this tendency in
several ways. Many grocery stores put national brands at eye level
and store brands on lower shelves because customers scan from
eye level down.
PRESENTATION TECHNIQUES
Tonnage Merchandising
As the name implies, tonnage merchandising is a display technique in
which large quantities of merchandise are displayed together.
Tonnage merchandising is therefore used to enhance and reinforce a
store’s price image. Using this display concept, the merchandise itself is
the display.
Frontal Presentation
A method of displaying merchandise in which the retailer exposes as
much of the product as possible to catch the customer’s eye.
Book manufacturers, for instance, make great efforts to create eye-
catching covers
CREATING AN APPEALING
STORE ATMOSPHERE
Atmospherics refers to the design of an environment by
stimulation of the five senses.
Many retailers have discovered the subtle benefits of developing
atmospherics that complement other aspects of the store design
and the merchandise. Therefore, they use lighting, colors, music,
scent, and even flavors to stimulate customers’ perceptual and
emotional responses and ultimately affect their purchase behavior.
Lighting
Lighting can highlight merchandise and capture a mood or feeling
that enhances the store’s image.
Retailers also are exploring ways to save energy with
technologically advanced lighting
LIGHTING
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. It also allows the retailer to focus
spotlights on special featured areas and items.
Mood Creation
Retailers use lighting to set the mood for their customers.
Ralph Lauren stores and boutiques in department stores use low
levels of light to coordinate with their overall ambience of
resembling a townhouse.
LIGHTING
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 ecologically friendly.
One obvious source of energy consumption is the lighting in a
store, which makes up approximately one-third of a large store’s
energy costs.
COLOR
The creative use of color can enhance a retailer’s image and help
create a mood.
Warm colors (red, gold, and yellow) produce emotional, vibrant,
hot, and active responses.
MUSIC
Music can either add to or detract from a retailer’s total
atmospheric package.
 Most shoppers notice music playing in stores, and nearly half of
them say they will leave if they do not like the selections being
played
Fortunately, unlike other atmospheric elements though, music can
be easily changed.
SCENT
Smell has a large impact on a customer’s mood and emotions. In
conjunction with music, it can increase customers’ excitement and
satisfaction with the shopping experience.
Customers in scented stores think they spent less time in the store
than do those in unscented stores.
Scents thus can improve customers’ subjective shopping
experience by making them feel that they are spending less time
examining merchandise, waiting for sales help, or checking out.
TASTE
It is a little more difficult to appeal subtly to consumers’ taste
buds.
However, many department stores are reintroducing an old-
fashioned offering to appeal to shoppers: the store restaurant.
The option to grab a bite without leaving the store encourages
customers to linger longer and enjoy their shopping experience
more.