Profitable Times Newsletter

Layout & Design #1

This is the first of a two-part article on store layout and design. This installment will explore basic retail foundations, applicable to most retail environments, on which layout and design decisions are based. The second installment examines the application of these guiding principles to specific details in the store.

Chain of Decisions

As a first step to understanding the fundamentals it's important to review a chain of decisions that will help you apply these principles in the most effective manner.

The first step in this chain is to determine who are your customers? No retail decision should be made without clearly understanding the characteristics of your customers.

Second, you need to know what your customers buy. This is important so you can effectively merchandise what they are most interested in buying and use that 'hook' to introduce them to new products. What are the best selling products based on revenue, units sold, turnover and margin?

Third, what is the relative value of what your customers buy? How does each of your product categories compare to your other product categories in the cumulative impact of revenue generation, margin, turnover and space allocation? In broad brushstrokes, this is about making sure the product categories that generate the most revenue and have the highest margin of profitability are given adequate exposure in the store. In turn, those categories that do the poorest should be given less exposure.

If you have sold widgets for fifty years but they rank poorly in the cumulative measurements above it doesn't mean they must be eliminated as a product category. If they are retained however, at least you will make that decision with your eyes wide open as to the ramifications of their inclusion in your product mix.

Not until you intimately understand the above can you begin to determine the best way to showcase your products?

Goals of a Successful Layout

Before making layout and design decisions it is also important to understand the goals of a successful store layout.

  • Lingering
    In my mind, the number one goal is to get the customer to linger. The more time a customer spends in your retail presence the better the chance they will find something to buy. The length of lingering is equal to the cumulative impact of layout and design features, merchandising attractiveness, display interest and the general ambiance in the store. (The second installment details how to focus the lingering customer on the product.)

  • Impulse and Incremental Sales
    A second goal is to increase impulse and incremental sales. Everyone knows about impulse sales. They are usually the relatively small purchases made quickly and often in the closing moments of a transaction that enhances the purchase for the customer and increases the average sale for the store. Very often these impulse purchases are of high margin products and are influenced by location and staff pro-active selling skills.

    Incremental sales are of even more importance. Incremental sales are those purchases above and beyond the initial expenditure intended by the customer and results in increased average transactions. The idea is to generate additional dollars from the customer right now.

    In addition, incremental sales are important because they are a more efficient use of your resources. A bigger sale still only takes one transaction process and usually only slightly, if any, more time and effort.

  • Movement Throughout the Space
    The third goal of the application of layout and design principles is to move the customer throughout the entire retail space. Usually, the front one-third of a retail presence gets a disproportionate amount of activity. A well designed store draws the customer deep into the retail space and throughout the entire area exposing the customer to all product categories.

    Where the eye goes the feet will follow. The tallest fixtures should be toward the sides or back of your space. The more the customer sees when they first enter any area, the more likely they will go deeper into the space and find something they want to buy.

  • Sightlines
    The fourth layout and design goal is to create sight lines that help control shoplifting and enhance customer service. While one of the most effective tools against shoplifting is eye contact, the location of the checkout counter and the positioning and height of fixtures are a complimentary factor.

  • Enhancement of the Store
    The fifth goal is to make sure the layout and design enhances the overall experience in, and the image of, your store. It's nice to be different than your competition, but the differentiation should be rooted in a purpose.

The Retail Experience

Recently, 'retail' has become more of a service business. Most customers value the experience and the product equally. So, even if the product selection is wonderful, if the experience, including layout, customer service, lighting, foot-traffic pattern, parking convenience, product knowledge of the staff, efficiency of the checkout process, etc., is lacking, it denigrates the overall experience.

All this has an expanded importance because recently more and more decisions are being made on the floor of the store, at the time of purchase, not in advance of the buying trip. Thus, everything in the store impacts the buying decision.

In the second Layout and Design article the focus is on the reality that store design has more to do with sales than looks. While this does not mean the presentation can be unattractive and boring, it does help to prioritize and perhaps reduce the expenditure for fixture design and build-out.

Click here for the second Layout and Design article.

See the complete list of Profitable Times™ Newsletters.


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