Retail Management

1. Retail Management Module 13: Introduction to Retailing

2. Store Design

3. Design and the Shopping Experience Store layouts: • Grid: maximizes space, allows for use of walls, corners • Drugstores • Drawback: interfere with customer line of site • Angular: best used for high-end products and minimal inventory • Jewelry or high-end clothing stores • Geometric: if Millennials are target customers • Department stores • Racetrack, forced path, mixed • Racetrack: follow path around store, returning to front • Forced path: doesn’t allow for customer-driven decisions • Mixed: allow you to borrow from all layouts (Target)

4. Design and Sales IKEA Case Study in Leveraging Store Layout

5. Design and Costs Angular: • Helps control inventory costs • Allows for display of minimal amount of merchandise Diagonal: • Allows for maximum amount of merchandise • Allows for easy monitoring of shoplifting or theft Grid: • Allow for maximized promotions • Manufacturers “sponsor” promotions with additional cash, paying for premium and therefore saving the price

7. Customer Shopping Behaviors Customers can only buy what they see; if the layout doesn’t encourage them to move past what you have on display they aren’t going to buy itShoppers enter and almost always turn right, avoid upper and lower floors, hate narrow aisles, need to orient prior

8. Store Layout Designs • Grid layout: • Pros: easy to categorize products, customers are used to layout • Cons: boring, shortcuts possible, line of sight is limited • Racetrack or Loop layouts: • Pros: great shopping experience, easier to execute promotions, encourages browsing • Cons: harder to run in and pick up something quickly, not good for turnover stores • Mixed, free flow layouts: • Pros: ideal for stores with smaller amounts, easy to create shopping experience • Cons: less space, easier to confuse customers

9. Product Layout • Three rules of visual merchandising: • Make it visible • Make it tangible and accessible • Give customers good choices • Bundled grouping: allows for items to be presented together so they can be purchased together • Don’t always come in form of fully finished rooms • Complementary grouping: sell different items that go together, but sold adjacently • Prop groupings: mannequins created to show clothing

10. Rewarding Shopping Experiences

11. Store Exterior • Endcaps: found in grid layout stores, at end of square aisle fixtures • Short set of tables or cardboard shelving • Used to promote single brand in store, or season • Window displays: made up of items carried in store, viewed by passers-by • Goal is to get people outside the store, inside and shopping • Promotional aisles: trick is that items usually do not feature items normally carried • Common in stores with weekly/monthly ad sent to homes • Shelf talkers that say “New Product” or “Sale!”

12. Store Exterior (cont.) • Shippers/manufacturer displays: provided to draw extra attention to a product • Dump bins: meant to give impression that an item has been deeply discounted • Nothing fragile or high quality • Flip-flops on sale for start of summer, DVD bins • Point of sale/purchase: last effort to sell something more to shopper • Gums and mints sold at checkouts • Retailers find new ways every day to display merchandise, but many aren’t well-known or researched

13. Presentation Techniques • End caps: • Eye-catching • Drawback: difficult to see • Window displays: • Artistic, expressive • Drawback: doesn’t work for all retailers • In-aisle promotions: • Drawback: not as visible • Shippers: • Colorful, eye-catching • Drawback: cheap display • Dump bins: • Discounted items, some effort put in to locate item • Drawback: implies discount, but not always quality • Point of sale/purchase: • Get shoppers with last items they didn’t think of • Not many drawbacks, except for moms not wanting their children to get candy or gum

14. Store Interior Design Flooring: makes statement (carpet, tile, wood) • Tile: allows retailer to bring in brand colors • Wood: outdoorsy or natural message • Cement: economical, stylish, versatile Lighting: warm, cool, natural, fluorescent • General/ambient: main source of light • Warm: more intimate, special shopping experience • Task: more intense light • Accent: creative drawing attention • Decorative: adds atmosphere

15. Store Interior Design (cont.) Walls and ceiling colors: • Colors influence emotions • Blue = calming, green = freshness, white = cleanliness, pink = energetic, purple = creative, orange = hunger, yellow = happy • Mean different things in different cultures • Younger audience: bold colors, older audience: muted Other elements: • Furniture/fixtures: industrial • Fitting rooms • Decorative items

16. Atmosphere in Web Retailing

17. Characteristics of Retailing Websites Shoppers react to environment, layout, and product displayAppealing website is about shoppability • Easy of use • Hi-resolution photos • Mobile-formatted site • Free shipping • User reviews • Secure payment options • Eye-catching and visually attractive

18. Online Store Design Layout, traffic flow, & environment are important • Appealing landing page: comparative to front of store • Enticing product pages: top menu shows items from store • Can narrow down search results (size, material, color, price, etc.) • Bundled displays aim for increased sales conversions • Visual display techniques leveraged when crafting retail website, meaning more profit for retailer

19. User Experience • Users expect a site will: • Load quickly, be easy to navigate, have good photos/search features, have concise but excellent product descriptions, offer live chat or instant customer service, have quick/secure checkout • Recognizing that shopping is becoming “omnichannel”, meaning multichannel approach • Voice-activated shopping experiences: Pet supply chains • Subscription shopping: make it easy to offer monthly or weekly interactions with customers that surprise/delight

20. Pros and Cons of an Online Store Brick-and-mortar • Advantages: shopper can have entirely immersive shopping experience, where you control everything • Disadvantages: shoppers are short on time and stingy about where they spend it Online • Advantages: trends favor e-commerce, and you don’t need large sales staff or have “store hours” • Disadvantages: attention span, can damage your margin if there is free shipping

21. Pros and Cons of an Online Store (cont.) • Advantage of having both brick-and-mortar and online store, is ability to appeal to your customer through both channels • Allow you to appeal to larger variety of shopping by offering them different ways to shop merchandise • Some customers will resist purchasing items online, others stick to online shopping • Website can act as window display • Disadvantage of both: area of retail that’s adjusting to online trends, and retailers find themselves in position where they have to shrink their store footprint

22. Quick Review Brick-and-mortar stores are different than online stores, but both work to maximize salesLuckily, shoppers are predictable from the way they walk through a store, what they like or don’t like, etc.Customer makes 80% of purchasing decisions in storeVisual merchandising is retailer’s tool to influence customer and make more sales, meaning more margin and profit