Chapter 18 Retail management

Space Allocation for Products: there are 2 BASIC APPROACHES USED TO DETERMINE SPACE NEEDED FOR A CATEGORY:

1) Model stock approach- determines floor space necessary to carry and display a proper merchandise assortment. Apparel stores and shoe stores 2) Sales-productivity ratio- assigns floor space on the basis of sales or profit per foot. Highly profitable product categories get large chunks of space, marginally profitable categories get less. Food stores, bookstores use this technique

Product Grouping: There are 4 MAIN TYPES OF PRODUCT GROUPING USED

1. Functional product groupings: display merchandise by common end use. A men's clothing store might group shirts, ties, cuff links, and tie pins, shoes, shoe trees, shoe polish. 2. purchase motivation product groupings: appeal to consumers urge to buy products and the amount of time he or she is willing to spend on shopping. A person with a lot of time to shop will visit upper levels, a disinterested person with less time might only look at the first level, that's why there are impulse products and quick purchases. 3. market segment product groupings: place together various items that appeal to a given target market. Women's apparel store divides products into juniors, misses, and ladies 4. storability product groupings: may be used for products needing special handling. Supermarket has freezer, refrigerator.

The lowest cost display is a _______ display

Cut case

A curving traffic pattern would most likely be used by _______.

Department

The straight traffic pattern is most widely used by ______.

Discount

A visual or graphical representation of the space for selling, merchandise, personnel, and customers as well as for specific product categories is referred to as_____.

Planogram

• Wish Lists:

a technique that expands upon the long standing concept of a wedding registry can be used with any products or events. Enables customers to prepare shopping lists for gift items they'd like to receive from a particular store or shopping center.

• Dump Bins

case that holds piles of sale clothing, marked down books, or other products. Open assortments of roughly handled items. Project low price image

Ensemble Displays

complete product bundle, ensemble is presented, rather than showing merchandise is separate categories like shoe department, pants department. Mannequin dressed in a whole outfit helps customers envision an entire product bundle.

• Experiential Merchandising

convert shopping from a passive activity into a more interactive one, by better engaging customers

Theme-Setting Displays

depicts a product offering in a thematic manner and sets a specific mood. Retailers often vary their displays to reflect seasons or special events. Such as for valentines days, seeks to attract and make shopping more fun.

Assortment Displays

exhibits a wide range of merchandise. Open assortment- customer is encouraged to feel, look at and or try products. Used with Greeting cards, books, magazines, fruit, candy, cosmetics. Closed assortment- customer is encouraged to look at merchandise but not touch it or try it on. Computer software, CD's, DVDs

• Case Displays:

exhibits heavier, bulkier items than racks hold. Dvd sets, books, sweaters use these.

• Cut Cases:

inexpensive display that leaves merchandise in original carton, Supermarkets and discount stores use cut cases. Project low price image

Interior

once customers are in the store, various elements affect their perceptions. a. Dead areas- awkward spaces where normal displays cannot be setup. b. 90% of specialty apparel stores have carpet, 70% of home centers have concrete floors, 2/3 of big box stores have vinyl c. Slow tempo music is supermarkets encourages people to move slowly d. People will shop longer with wide aisles

curving/free-flowing/free-form traffic flow

places displays and aisles in a free flowing pattern a. advantages- friendly atmosphere, shoppers don't feel rushed and will browse longer, people are encouraged to walk through the store in any direction or pattern, impulse or unplanned purchases are enhanced. b. Disadvantages- possible customer confusion, wasted floor space, difficulties in inventory control, high labor intensity, potential loitering, displays cost more.

straight (gridiron) traffic flow

places displays and aisles in a rectangular or gridiron pattern. Often used by food retailers, discount stores, drugstores, hardware a. advantages- efficient atmosphere, more floor space for product displays, people can shop quickly, inventory control and security are simplified, self-service is easy so reduces labor costs. b. Disadvantages- impersonal atmosphere, more limited browsing, rushed shopping behavior

• Rack Displays

primarily functional use- to neatly hang or present products. Often used by apparel retailers, housewares, must be maintained or it will clutter

POP Displays

provides shoppers with information, adds to store atmosphere, and serves a substantial promotional roles. It is persuasive, it is a silent salesperson, it is flexible, it enhances the overall shopping experience.

Atmosphere

refers to the stores physical characteristics that project an image and draw customers. Often influences people's shopping enjoyment and time spent browsing, willingness to converse with personnel, tendency to spend more than originally planned, likelihood of future patronage Page 461

• Enhanced Shopping Experience:

retailer does everything possible to minimize annoyances and to make the shopping trip pleasant.

The largest percentage of most retail facilities is comprised of ____ space.

selling

Exterior

store location, storefront- total physical exterior of the store itself, includes marquee, entrances, windows, lighting, construction materials, and other factors. With its storefront, a retailer can present a conservative, trendy, upscale, discount or other image. a. Marquee- sign that displays the store's name. (Golden arches)

• Solutions selling:

takes a customer-centered approach and presents solutions rather than products. Goes a step beyond cross-merchandising. Like grouping by price during the holidays which provides a solution for budget shopper

Store Layout

total amount of floor space to allot to selling merchandise, personnel and customers. Without allocation the retailer would have no idea of the space abailable for displays signs restrooms. a. Planogram (visual graphic): representation of the space for selling, merchandise, personnel, and customers as well as product categories. There are four broad areas to consider when looking at space allocation: b. 1)selling space: used for dispalys of merchandise, interactions between salespeople and customers, demonstrations. Self-service retailers apportion most space to selling c. 2)merchandise space: used to stock nondisplayed items. At a traditional shoe store, this area takes up a large percentage of total space. d. 3) personnel space: set aside for employees to change clothes, to take lunch and coffee breaks, and for restrooms. e. 4)customer space: contributes to shopping mood. Can include a lounge , benches and or chairs, dressing rooms, rest rooms, a restaurant, nursery, parking, wide aisles, discounters are more apt to skimp on these areas. Page 467

• Co-branding

two or more well-known retailers situate under the same roof or at one website to share costs, stimulate consumers to visit more often and attract people shopping together who have different preferences