Business Development Chapter 16 Internet Customers Try On Clothing And Accessories

Chapter 16 – Store Layout, Design, and Visual Merchandising

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CHAPTER 16

STORE LAYOUT, DESIGN, AND VISUAL MERCHANDISING

ANNOTATED OUTLINE

INSTRUCTOR NOTES

• Recognizing the significant impact of store

environment on shopping behavior,

retailers have devoted considerable

resources to their store design and

merchandise presentation.

A. 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

meeting the needs of the target market

and building a sustainable competitive

advantage.

See PPT 16-4

For examples of retail store design strategies used

abroad, see PPT 16–5 and 16-6

Chapter 16 – Store Layout, Design, and Visual Merchandising

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• Store design provides hedonic benefits by

offering customers an entertaining and

enjoyable shopping experience.

D. 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.

See PPT 16-9

Discuss with students design elements of a luxury

store as compared to a discount store and how the

E. Meet Legal Considerations—Americans with

Disabilities Act

• A critical objective in any store design or

redesign decision is to be in compliance

with the 1990 Americans with Disabilities

Act (ADA).

Ask students to identify a store that would be

inaccessible to a disabled person.

See PPT 16–10

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F. Design Trade-Offs

• A store design rarely achieves all of the

design objectives described above.

Managers need to make trade-offs among

them.

See PPT 16-12

Ask students how often the design of a store

influences their decision to shop there.

II. Store Design Elements

• Four elements in the design of stores are

the (1) layout, (2) signage and graphics,

(3) feature areas, and (4) store exteriors.

Each of these elements is discussed in this

section.

LO 16-2 List the advantages and disadvantages

of alternative store layouts.

See PPT 16-13

Ask students what stores seem to draw them

around to view more merchandise than they

expected to. Ask them if a store layout ever makes

them feel too crowded.

A. Layouts

1. Grid Layout

• The grid layout is best illustrated by most

grocery and drug store operations. It

See PPT 16-15 for a description and illustration of

the grid layout

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contains 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 also cost-efficient

because space productivity is enhanced

and fixtures are standardized.

• One problem with the grid layout is that

customers typically aren’t exposed to a lot

Ask students what is the best type of store for a

grid design and why.

2. Racetrack Layout

• The racetrack layout (also known as a

loop layout) is a type of store design that

provides a major aisle to facilitate

customer traffic, with access to the store’s

See PPT 16–16

Ask students to give examples of different stores

3. Free-Form Layout

• A free-form layout (also known as

boutique layout) arranges fixtures and

See PPT 16-18 for a description and illustration of

the free-form layout

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aisles asymmetrically. It is successfully

used primarily in specialty stores or within

the departments of larger stores.

• In this relaxed environment, customers

feel like they are in someone’s home,

Ask students why upscale specialty stores often

use a free-form design.

B. Signage and Graphics

• Signage and graphics inside the store help

customers locate specific products and

departments, provide product

information, and suggest items or special

purchases.

Ask students to discuss ways to enhance the

effectiveness of a retailer’s signage. Can a retailer

have too many signs?

See PPT 16-19 and 16–20

1. Digital Signage

• Many retailers are beginning to replace

traditional signage with digital signage

systems.

See PPT 16–21

Ask students to develop a list of the benefits of

digital signage. Do students even pay attention to

Chapter 16 – Store Layout, Design, and Visual Merchandising

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• Digital signage provides a number of

benefits over traditional signage for the

C. Feature Areas

• Feature areas are the areas within a store

designed to get the customer’s attention.

See PPT 16–22

Ask students how often feature areas draw them

into a retailer.

1. Freestanding Displays

• Freestanding displays are fixtures that are

located on aisles and designed primarily to

attract customers’ attention and bring

2. Mannequins

• A mannequin is a life-sized representation

of the human body, used for displaying

apparel.

3. End Caps

• End caps are displays located at the end of

4. Promotional Aisle or Area

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5. Walls

• Because retail space is often limited, many

6. Dressing Rooms

• Today, retailers are recognizing the

importance of dressing rooms as the

critical space in which customers decide

whether to make a purchase.

• Virtual dressing rooms are becoming more

important and interesting to online

shoppers. People cannot try on clothes

displayed on a website, but the spread of

7. Cash Wraps

• Cash wraps, also known as point-of–

purchase (POP) counters or checkout

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D. Store Exteriors

• The exterior includes not just the physical

store (e.g., windows, entrances) but also

1. Windows

• Window displays draw customers into the

store and provide a visual message about

2. Entrances

• The entryway also is critical because it

determines whether consumers believe

they can and should enter and affects the

3. Exterior Singage and Store Design

• The signs that appear on the exterior are

Chapter 16 – Store Layout, Design, and Visual Merchandising

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4. Parking

• Regardless of the design and image they

5. Landscaping

• Like so many retail decisions, whether,

how much, and what kind of landscaping a

Space management involves key resource

III. Space Management

• The space within stores and on the stores’

shelves and fixtures is a scarce resource.

LO 16-3 Describe how to assign store floor

space to merchandise departments and

categories.

A. Space Allocated to Merchandise Categories

• Retailers consider three factors when

deciding how much floor or shelf space to

See PPT 16-23

1. Space Productivity

• A simple rule of thumb for allocating

Chapter 16 – Store Layout, Design, and Visual Merchandising

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space is to allocate on the basis of

merchandise sales.

2. Inventory Turnover

• Inventory turnover affects space

allocation in two ways.

• First, both inventory turnover and gross

margin contribute to GMROI.

3. Display Considerations

• The physical limitations of the store and

its fixtures affect space allocation.

Ask students to consider situations in which the

retailer might strategically want to “over–allocate”

space to certain merchandise categories.

B. Location of Merchandise Categories

See PPT 16-26

Chapter 16 – Store Layout, Design, and Visual Merchandising

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• By strategically placing impulse and

demand/destination merchandise

(products that customers have decided to

buy before entering the store) throughout

• Next, customers often turn right into the

area referred to as the strike zone, a

critical area because it creates the

customers’ first impressions of the

retailer.

1. Impulse Merchandise

• Impulse merchandise includes products

that customers purchase without prior

plans, like fragrances, cosmetics, and

magazines.

• They are almost always located near the

2. Demand and Promotional Merchandise

• Demand merchandise and promotional

Chapter 16 – Store Layout, Design, and Visual Merchandising

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3. Special Merchandise

• Some merchandise categories, for

instance expensive, fragile items or highly

4. Category Adjacencies

• Retailers often put complementary

categories next to each other to

Ask a student what he/she purchased on their last

trip to a drug store. Assuming other customers

5. Location of Merchandise within a