Chapter 17 – Store Layout, Design, and Visual Merchandising
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CHAPTER 17
STORE LAYOUT, DESIGN, AND VISUAL MERCHANDISING
ANNOTATED OUTLINE
INSTRUCTOR NOTES
• Recognizing the significant impact of store
I. Store Design Objectives
• When designing or redesigning a store,
managers must meet five objectives.
See PPT 17-3
Pick a store the students know and have them
evaluate the store based on these objectives.
A. Store Design and Retail Strategy
• To meet the first objective, retail managers
must define the target customer and then
See PPT 17-4
For examples of retail store design strategies used
B. Influence on Consumer Buying Behavior
• To meet the second design objective of
influencing customer buying decisions,
retailers concentrate on store layout and
space planning issues.
• The store design should: attract consumers
to the store, enable them to easily locate
merchandise of interest, keep them in the
Chapter 17 – Store Layout, Design, and Visual Merchandising
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families have, they are spending less time
planning shopping trips and making more
purchase decisions in stores.
C. Flexibility
• Store planners attempt to design stores with
maximum flexibility. Flexibility can take
D. Cost
• The fourth design objective to consider is
the costs associated with each store design
element versus the value received in terms
of higher sales and profits.
• When considering the atmospheric issues of
store design, retailers must weigh the costs
along with the strategy and customer
attraction issues.
See PPT 17-9
E. Legal Considerations-Americans with
Disabilities Act
• A critical objective in any store design or
redesign decision is to be in compliance
Ask students to identify a store that would be
inaccessible to a disabled person.
Chapter 17 – Store Layout, Design, and Visual Merchandising
that was build before 1993. Stores built
after 1993 must be fully accessible.
• Accessibility answers are not clear or easy;
they are being considered on a case-by-case
basis in federal courts around the United
States.
F. Design Trade-Offs
• A store design rarely achieves all of the
design objectives described above.
Managers need to make trade-offs
among them.
• One more trade-off is the balance
between giving customers adequate
space in which to shop and productively
using the space for merchandise.
See PPT 17-12
Ask students how often the design of a store
influences their decision to shop at a particular
store?
II. Store Design
See PPT 17-13
A. Layouts
• One method of encouraging customer
exploration is to present them with a layout
that facilitates a specific traffic pattern.
See PPT 17-14
Chapter 17 – Store Layout, Design, and Visual Merchandising
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1. Grid Layout
• The grid layout is best illustrated by most
grocery and drug store operations. It
contains long gondolas of merchandise and
aisles in a repetitive pattern.
• One problem with the grid layout is that
customers typically aren’t exposed to all of
the merchandise in the store.
See PPT 17-15 for a description and
illustration of the grid layout
purchasing.
2. Racetrack Layout
• The racetrack layout (also known as a
loop) is a type of store design that provides
a major aisle to facilitate customer traffic,
with access to the store’s multiple entrances.
This aisle loops through the store, providing
access to all the departments.
See PPT 17-16
Ask students to give examples of different
stores that have a “racetrack” design. What
are the advantages and disadvantages?
3. Free-Form Layout
• A free-form layout (also known as
boutique layout) arranges fixtures and
aisles asymmetrically. It is successfully
used primarily in smaller specialty stores or
within the departments of larger stores.
See PPT 17-18 for a description and
illustration of the free-form layout
Ask students why upscale specialty stores
Chapter 17 – Store Layout, Design, and Visual Merchandising
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B. Signage and Graphics
• Signage and graphics help customers locate
specific products and departments, provide
product information, and suggest items or
special purchases.
• Describe special offers to entice customers
into the store
• Provide price and other information about a
product at the point-of-sale
Ask students to discuss ways to enhance the
effectiveness of a retailer’s signage. Can a
retailer have too many signs?
1. Digital Signage
• Many retailers are beginning to replace
traditional signage with digital signage
systems.
See PPT 17-21
Ask students to develop a list of the benefits of
C. Feature Areas
• Feature areas are areas within a store
See PPT 17-22
Ask students how often feature areas draw them
Chapter 17 – Store Layout, Design, and Visual Merchandising
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designed to get the customer’s attention.
into a retailer?
1. Entrances
• The entry area is often referred to as the
decompression zone because customers are
making an adjustment to a new
2. Freestanding Displays
• Freestanding displays and mannequins
located on aisles are designed primarily to
3. 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.
4. End Caps
• End caps are displays located at the end of
the aisle.
5. Promotional Aisle or Area
• A promotional aisle or area is an aisle or
area used to display merchandise that is
Chapter 17 – Store Layout, Design, and Visual Merchandising
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being promoted.
6. Walls
• Since retail space is often scarce and
7. Windows
• Although window displays are clearly
external to the store, they can be an
important component of the store layout.
8. Fitting Rooms
• Today, retailers are recognizing the
importance of fitting rooms as the crucial
space in which customers decide whether to
make a purchase.
III. Space Management
• The space within stores and on the stores’
shelves and fixtures is a scarce resource.
Space management thus involves: (1) the
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allocation of store space to merchandise
categories and (2) the location of
departments or merchandise categories in
the store.
• Retailers consider four factors when
A. Space Allocated to Merchandise Categories
1. Space Productivity
• A simple rule of thumb for allocating space
is to allocate on the basis of merchandise
sales.
• A more sophisticated productivity measure,
such as gross margin per square foot would
consider the profits generated by the
merchandise, not just the sales.
2. Inventory Turnover
• Inventory affects space allocation in two
ways.
Chapter 17 – Store Layout, Design, and Visual Merchandising
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3. Impact on Store Sales
• Retailers need to consider the allocation
4. Display Considerations
• Finally, the physical limitations of the store
and its fixtures will necessarily affect space
allocation.
B. Location of Merchandise Categories and
Design Elements
• The location of merchandise categories
plays a role in how customers navigate
through the store.
• 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.
See PPT 17-26
1. Impulse Merchandise
• Impulse merchandise includes products
that customers purchase without prior plans,
like fragrances, cosmetics and magazines.
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• They are almost always located near the
front of the store where they are seen by
everyone and may actually draw people into
the store.
2. Demand Merchandise
• Children’s, expensive specialty goods, and
furniture departments as well as customer-
Ask students where they would expect to find
3. Special Merchandise
• Some merchandise categories, for instance
expensive, fragile items or highly personal
4. Adjacencies
• Retailers often cluster complementary
products together to facilitate multiple
purchases.
Ask a student what he/she purchased on their
last trip to a drug store. Assuming other
customers purchase a similar market basket,
the store could group these categories
together.
C. Location of Merchandise within
a Category: The Use of Planograms
1. Planogram
• A planogram is a diagram created from
A sample planogram is shown in PPT 17-27
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photographs, computer output or artists’
renderings that illustrates exactly where
every SKU should be placed.
2. Videotaping Consumers
• Some retailers are utilizing consulting firms
to videotape consumers as they move
through the store. These videos can be used
to improve layouts and planograms by
identifying the causes of slow-selling
merchandise, such as poor shelf placement.
3. Virtual Store Software
• Another tool used to determine the best
place to put merchandise and test
consumers’ responses to merchandise
placement is virtual store software.
IV. Visual Merchandising
See PPT 17-29
A. Fixtures
See PPT 17-30
Chapter 17 – Store Layout, Design, and Visual Merchandising
of a store and encourage traffic flow.
• Fixtures come in an infinite variety of
styles, colors, sizes, and textures, but only a
few basic types are commonly used.
• A rounder (also known as a bulk 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.
See PPT 17-33
B. Presentation Techniques
See PPT 17-35
1. Idea-Oriented Presentation
• Some retailers successfully use an idea-
oriented presentation – a method of
presenting merchandise based on a specific
idea or image of the store.
See PPT 17-36
2. Style/Item Presentation