Strategies

1. Traffic building Consumer drawn to store/category Hi share, lo margin, frequent purch. Trial and Entry/Turf Protector Consumer enters store for initial shopping exp. Freq. purchased, intensely preferred, featured by target competitor (maintain mkt. share) Transaction building Consumer spends more in the category or market basket Larger transaction size Strategies

2. Excitement creation Sense of theater/urgency/opportunity New products, seasonal, rapidly growing Cash generating Consumer shifts purchases to more profitable products Hi margins, hi loyalty, hi ring, not price sensitive Image creator Category builds consumer’s image of store Reinforce store theme or topical subject Strategies

3. Pasta Category

4. Case Study - Toothpaste

5. Tactics – Traffic building • Aggressive pricing on loyalty products/low margins • Media on frequently purchased items • Prominent space

6. In Class #4 – list names • Select product category • Carbonated beverages • Ice cream • Cereal • Salad dressing • Beer • Salty snacks • Develop strategy for category products

7. ___________ Category

8. Space Management Overview Exceeding customer expectations through merchandising excellence

9. Training Objectives • Understand why Space Management is important • Identify the key responsibilities of Space Management • Describe the primary tools used by Space Management • Explain the goals of Space Management At the end of this session you should be able to:

10. So, exactly what “Space” are we talking about?

11. Space is the medium that we use to: • Display and promote our products Racks and Shelves Gondolas and Endcaps

12. Space is the medium that we use to: • Communicate the brand Interactive Displays Creative Signage

13. The Best Buy Experience

14. A multitude of inputs Many departments have input on how the store should look & shop • Store Planning • Implementation of prototype standards • Strategic Marketing • Brand management • Retail Operation • Efficientprocesses and programs for the company • Buying • Buys product • Inventory • Manages inventory stock levels • Space Planning • Space allocation and evaluation • Visual Merchandising • Develops fixtures, graphics, interactives • Communication • Internal communication, public and community relations

15. So, who develops and communicates the merchandise plan for this valuable space?

16. Space Management Mission To provide product placement that compels our customers to purchase complete solutions.

17. Space Management Goals • Enhance the Best Buy brand by improving our customer’s shopping experience. • Provide Retail with easy-to-execute Maps and Planograms • Analyze category and item effectiveness to determine the optimal use of space • Provide customized maps and planograms to support market specific assortments

18. Key Responsibilities • Where do the categories go? • Where do the products go?

19. Key Responsibilities • What is the best use of the space? Hmm… Not a lot of free space here!

20. Space Management Organizational Structure SR. VP John Thompson Director of Space Management - Heather Elliott-Kirsch Merchandise Layout Team Planogram Team Space Planning Team

21. Merchandise Layout Store maps are created using AutoCAD Each small block is an individual “section”

22. “Educated” Layout Each and every store needs to be designed with the following criteria in mind: • Financial Objectives • Revenues, Turns, Margins, etc. • Operational Objectives • Aisle Width, # of Registers, LP Desks, Stock Capacity, etc. • Aesthetic Objectives • Best Buy Branding, Clear Sight Lines, Fun Interactives, etc.

23. What is a Planogram? Planograms are created using Intercept

24. How to read a Planogram Signage Displays Boxstock Product Listing Fixture Placement

25. New Planogram? • When section performance is down • New products are added to assortment • Major trends indicate changes • Competition demands • Seasonal space needs • Other categories need space • Modification of store plans/fixtures

26. Space Planning • Mission: • Providing Best Buy with Space Allocation and Evaluation Recommendations which Enable the most Effective use of Retail Space. • Square Foot Analysis (Store, Dept, Class, Subclass) • Store Capacity and Cubic Space • Store Overstock and Closeout Analysis • Adjacency Recommendations • Marginal Return on Space Analysis • Ad Hoc Retail Space Related Investigations

27. Benefits to Stores • Balance inventory • Reduce costly out of stocks • Eliminate wasteful overstocks • Cut instore inventory costs • Increase inventory turnover • Influence shopping behavior • Match mix with demand • Position products by retailer goals

28. Benefits to Stores • Improve customer service • Organize for shopping ease • Being instock fosters loyalty • Increase store efficiencies • Ensure optimum case packs • Cut backroom overstock • Speed reset times – planograms • Proper placement for new items/performance

29. Space Planning All the “Right” stuff Space Allocation The Right Space The Right Place Positioning The Right Neighbors Adjacency & Attachment

30. Positioning The Right Place

31. Adjacency The Right Neighbors

32. Opportunity Report