EXECUTIVE SUMMARY

Store layout and visual merchandising are factors that contribute to the uniqueness of a store.
The exterior and interior of a store convey several messages about the store to the consumers.
The building that houses retail store, (whether new or old) and the exterior design of the store are
important aspects of the design of the store. Marquees, walkways, entrances, doors, display
windows, the height and size of the building, colors and materials used, and theft prevention are
some of the key factors to be kept in mind while developing a store's exterior.

Managing space is the first and foremost concern of almost every retailer, when it comes to
designing the store's interior. Space is always an expensive and scarce resource. Retailers always
try to maximize the return on sales per square foot. Planning a layout for the store's interior is the
first step in designing the store's interior.

STORE LAYOUT
A store layout is the design in which a store's interior is set up. Store layout is well thought out to
provide the best exposure possible. It is designed to create an attractive image for consumers. It
describes the overall look and feel of the interior of a retail store, including the placement of
fixtures and products within the store. It is an important part of implementing retail store
strategy. Effective layouts are designed to expose customers to the most products possible give
amount of floor space available.
A well-planned retail store layout allows a retailer to maximize the sales for each square foot of
the allocated selling space within the store. Store layouts generally show the size and location of
each department, any permanent structures, fixture locations and customer traffic patterns. Each
floor plan and store layout will depend on the type of products sold, the building location and
how much the business can afford to put into the overall store design.

Elements of the Store Environment

The successful retailer will place a heavy emphasis on designing their physical facilities so as to
enhance the retailers overall image and increase its productivity. The elements that should be
considered are
:a. Visual Communications Retail identity, graphics, and POS signage
.b. Store Planning Space allocation, layout, and circulation.
c. Store Design Exterior design, ambiance, and lighting.
d. Merchandising Fixture selection, merchandise presentation, and visual merchandise in

OBJECTIVES:
The two primary objectives of creating the desired store image and increasing space productivity
correspond to the general mission of all retailers, which is to get consumers into the store (traffic)
and influence them to buy merchandise once inside (conversion rate) while operating in the most
efficient manner possible (operating efficiency). The store planner must constantly balance these
objectives, as they are sometimes at odds.
1. Developing a Store Image - the ability to create and change image through the store
environment becomes more important every day as consumers time poverty increases.
2.

Increasing Space Productivity - a goal summarized in a simple but powerful truismof

retailing: The more merchandise customers are exposed to, the more they tend to buy.
To enhance space productivity, retailers must incorporate planning, merchandising, and
design strategies that minimize shrinkage (the loss of merchandise through theft, loss, and
damage)

STORE PLANNING:
Store Planning. Store planning is the development of floor plans, which indicate where
merchandise and customer service departments are located, how customers circulate through the
store, and how much space is dedicated to each department
Allocating Space - the starting point of store planning is determining how the available store
space will be allocated to various departments, based on mathematical calculations of there turns
generated by different types of merchandise.
1. Types of Space Needed - there are five basic types of space in a store:
a. The back room includes the receiving area to process arriving inventories and the stockroom to
store surplus merchandise.
b. Offices and other functional spaces include a break room for associates, a training room,
offices for the store manager and assistant managers, a cash office, bathroom facilities for both
customers and employees, and perhaps other areas.
c. The amount of space dedicated to aisles, service areas, and other non selling areas can be
significant, perhaps 15 percent or more of the entire space. While the store planner always
attempts to minimize the amount of non selling space, customer service is an equally important
part of a store and should not be short-changed.
d. The floor merchandise space holds many types of fixtures used to display merchandise
.e. The walls are one of the most important elements of a retail store. They serve as fixtures
holding tremendous amounts of merchandise, as well as serving as a visual backdrop for the
merchandise on the floor.

2. Space Allocation Planning - to determine the most productive allocation of space, the store
planner must analyze the productivity and profitability of various categories of merchandise.
There are two situations where this is evident: planning a new store and revising the space
allocation of an existing store.

a. Improving Space Productivity in Existing Stores - When a retailer has been in business for
some time, it can develop a sales history on which to evaluate merchandise performance, refine
space allocations, and enhance space productivity. Various quantitative measures, such as the
space productivity index, can be used to develop a more productive space allocation.
b. Space Allocation for a New Store - When a retailer is creating a new store format, it bases
space allocation on industry standards, previous experience with similar formats, or more
frequently, the space required to carry the number of items specified by the buyers

TYPES OF STORE LAYOUT:

Free flow layout: These stores do not really have a fixed arrangements, the irregular pattern
leads to greater flexibility for both fixtures and shoppers. However if too many fixtures are used
it can create an overcrowded effect. Some fashion store chains use a free flow layout, inorder to
create an image of the lifestyle that corresponds to the garments being sold.

ADVANTAGES

Allowance for browsing and wandering freely

Increased impulse purchases
Visual appeal
Flexibility

DISADVANTAGES

Loitering encouraged
Possible confusion
Waste of floor space
Cost
Difficulty of cleaning

LOOP LAYOUT

Loop Layout is also known as Racetrack layout. It is a type of store layout in which a major
customer aisle begins at the entrance, loops through the store, usually in the shape of a circle,
square, or rectangle, and then returns the customer the front of the store.

Advantages
It guides customer round a large area
It exposes large amounts of merchandise
Disadvantages
Customers cannot focus on intended purchase
Need for internal walls/island screens

GRID LAYOUT

These tend to have defined aisles and space for products. A customer tends to move around in an
ordered way e.g like a supermarket or convenience
store. Signs are often overhead to help customers know where the products are. They will also
use end of aisles and special displays to encourage impulse purchasing

Advantages

Low cost
Customer familiarity
Merchandise exposure
Ease of cleaning
Simplified security
Possibility of self-service

Disadvantages

Plain and uninteresting

Limited browsing
Stimulation of rushed shopping behavior
Limited creativity in decor

Spine Layout:
Spine Layout is a type of store layout in which a single main aisle
runs from the front to the back of the store, transporting customers in both
directions, and where on either side of this spine, merchandise departments

using either a free-flow or grid pattern branch off toward the back aisle walls.

Advantage
Retailer can utilize the benefits of free flow,grid and loop
systems.
Disadvantage

 Retailer may need to vary the shape of central walk way &
increase expenditure on fixtures & fittings

RETAIL LOCATION
A retailer has to choose among alternate types of retail locations available. It may locate in an
isolated place and pull the customer to the store on its own strength, such as a small grocery store
or paan shop in a colony which attracts the customers staying close by. Typically a store location
may be:
1. Freestanding /Isolated store
2. Part of Business District/Centres (Unplanned Business Districts)
3. Part of a Shopping Centre (Planned Shopping Centres)

1. Freestanding /Isolated store

Advantages:
Convenience
High traffic and visibility
Modest occupancy cost

 Separation from competition

Few restrictions

DISADVANTAGES
No foot traffic
No drawing power

CENTRAL BUSINESS DISTRICTS

A central business district (CBD) is the commercial and business centre of a city.
central business district located away from its commercial or cultural city centre or downtown.
The CBD usually has an urban density higher than the surrounding districts of the city, and is
often the location of the tallest buildings in the city.

ADVANTAGES
Hub for public transportation
Draws people into areas during business hours
Pedestrian traffic
Residents

DISADVANTAGES
High security required
Shoplifting
Parking is poor
Evenings and weekends are slow

SHOPPING CENTERS

A shopping center is a group of retail and other commercial establishments that is

planned, developed, owned and managed as a single property, typically with on-site
parking provided. The center's size and orientation are generally determined by the
market characteristics of the trade area served by the center.

Shopping Center Management Controls:

Parking
Security
Parking lot lighting
Outdoor signage

 Advertising
Special events for customers

ADVANTAGES
Convenient locations
Easy parking
Low occupancy costs
DISADVANTAGES
Limited trade area
Lack of entertainment
No protection from weather

TRADE AREA
A stores trade area, also called its catchment, can be likened to its sphere of influence. It
measures how far its customer base extends.. In fact, if all infinitesimal probabilities be included
in defining the trade area, it would include the entire globe, and even the universe if the one in a
trillion trillion probability of a spaceship landing in front of that Pune store be also considered.
Hence, a trade area definition is restricted to a bulk fraction of the (literally) universe of
customers that a store attracts. Typically, this varies from 60-80%.
Why a retailer needs to know its trade area is asking why a politician needs to know the
constituents of the district he contests elections from. Just like a politician cannot change the
demographics of his constituents, a store cannot change the demographic facts of its site. It
might choose to ignore it only in a totalitarian state where supplies and competition are both
artificially kept scarce. It might shape the habits of its customer base, slowly and incrementally,
but thats another story, and merely nuanced adjustments to a set reality shaped by
metanarratives of geography, history and sociology.
To be successful, a retailer has to become the store that its community needs and a successful
trade area analysis defines exactly what this community is and what it needs, explicitly and
implicitly.
Trade area analysis provides the foundation for:

Understanding the geographic extent and characteristics of store patronage.

Spatially assessing performance.
Performing competitive analysis.
Evaluating market penetration and market gap analysis.
Target marketing.
Merchandising.
Identifying/quantifying effects of cannibalization.

Developing and exploiting demographic profiles.

PLANNING FIXTURES AND MERCHANDISE PRESENTATION

In the "theater" of retailing, there are two basictypes of merchandise presentation: visual
merchandising displays which are analogous to the propswhich set scenes and serve as
backdrops; and on-shelf merchandising which represents the stars of the performance.
A. Fixture Types fall into three basic categories:
1. Hardline Fixtures. The workhorse fixture in most hardline departments is the gondola.
The gondola can hold a wide variety of merchandise -- in fact, virtually all hard lines -by means of hardware hung from the vertical spine. Tables, large bins, and flat-base
decks are used to display bulk quantities of merchandise when the retailer wants to make
a high-value statement
.
2. Soft line Fixtures. A large array of fixtures have been developed to accommodate the
special needs of soft lines, which often are hung on hangers. The four-way feature rack
and the round rack are two of the fixtures most heavily used today. The round rack is
known as a bulk or capacity fixture, and the four-way rack is considered a feature fixture,
because it presents merchandise in a manner, which features certain characteristics of the
merchandise (such as color, shape, or style).
3. Wall Fixtures. The last type of fixture are those designed to be hung on the wall. To
make a plain wall merchandisable, it is usually covered with a vertical skin that is fitted
with vertical columns of notches similar to that on the gondola, into which a variety of
hardware can be inserted. Shelves, peg hooks, bins, baskets, and even hanger bars can be
fitted into wall systems

B. Merchandise Presentation Planning - With all the various types of fixtures available, there
endless variety of ways to merchandise product.
1. The methods of merchandise presentation include the following:

a. Shelving - The majority of merchandise is placed on shelves that are inserted into gondolas or
wall systems. Shelving is a flexible, easy-to-maintain merchandising method.
b. Hanging - Apparel on hangers can be hung from soft lines fixtures such as round racks and
four-way racks, or from bars installed on gondolas or wall systems.
c. Pegging - Small merchandise can be hung from peg hooks, which are small rods inserted into
gondolas or wall systems. Used in both soft lines and hard lines, pegging gives a neat, orderly
appearance, but can be labor intensive to display and maintain.
d. Folding - Higher-margin or large, unwieldy soft lines merchandise can be folded and then
stacked onto shelves or placed on tables. This can create a high-fashion image, such as when
bath towels are taken off peg hooks and neatly folded and stacked high up the wall.
e. Stacking - Large hardline merchandise can be stacked on shelves, the base decks of gondolas,
or "flats," which are platforms placed directly on the floor. Stacking is easily maintained and
gives an image of high volume and low price
.f. Dumping - Large quantities of small merchandise can be dumped in bins or baskets inserted
into gondolas or wall systems. This method can be used in soft lines (socks, wash cloths) or hard
lines (batteries, candy), and creates a high-volume, low-cost image.

2. Different merchandising methods can strongly influence our buying habits and cause us to
purchase more. There is a certain psychology of merchandise presentation.
a. Value/Fashion Image - One of merchandising's most important psychological effects is its
ability to foster an image in the customer's mind of how trendy, exclusive, pricey, or value
oriented the merchandise is.

b. Angles and Sightlines - Research has shown that as customers move through a retail store,
they view the store at approximately 45 degree angles from the path of travel, so merchandise
placed at 45 degree angles to the aisle has better visibility .
c. Vertical Color Blocking - To be most effective, merchandise should be displayed in vertical
bands of color wherever possible, so that customers are exposed to a greater number of SKUs.

c. Selecting the Proper Fixture and Merchandise Presentation Methods

In selecting which fixtures and merchandising methods to use, a good guideline is to match the
fixture to the merchandise, not the merchandise to the fixture. This means you should only use
fixtures that are sensitive to the nature of the merchandise, but all too often, retailers are forced
to put merchandise on the wrong fixture.

d. Visual Merchandising is the artistic display of merchandise and theatrical props used asscenesetting decoration in the store. Visuals don't always include merchandise - they may just be
interesting displays of items somehow related to the merchandise offering or to amood the
retailer wishes to create

STORE DESIGN
Store Design - encompasses both the exterior and the interior of the store. There are literally
hundreds of details in a store's design, and all must work together to create the desired store
ambiance, which is the overall feeling or mood projected by a store through its aesthetic appeal
to the human senses.

A. Storefront Design. If the retail store can be compared to a book, then the storefront or store
exterior is like the book cover. It must be noticeable, easily identified by passing motorists or
mall shoppers, memorable, clearly identify the name and general market positioning of thestore,
and give some hint as to the merchandise inside.
B. Interior Design can be broken into architectural elements and design finishes, and
encompasses floorcoverings, walls, and ceilings
.C. Lighting is one of the most important, though often overlooked, elements in a successful
store design. Retailers learned that different types and levels of lighting can have a significant
impact on sales
.D. Sounds and Smells :Total Sensory Marketing. Research has shown that senses other than
sight can be very important. Many retailers are beginning to engineer the sounds and smells in
their stores

VISUAL COMMUNICATION
Visual communications includes in-store signage and graphics. When carefully
balanced with personal service, visual communications, with its reliability and low
cost, can create an effective selling environment and is therefore an important tool
in the store designer 'stool box.

A. Name, Logo, and Retail Identity. The first and most visible element in a
comprehensive visual communications program is the retailer's identity, composed
of the store name, logo mark, and supporting visual elements. The name and logo
must be catchy, memorable, and most of all, reflective of the retailer's
merchandising mission.
B. Institutional Signage. Once inside the store, the first level of visual
communications is known as institutional signage, or signage that describes the
merchandising mission, customer service policies, and other messages on behalf of
the retail institution.
C. Directional, Departmental, and Category Signage serve as the next level of
organizational signage. These signs help guide the shopper through the shopping
trip and assist in locating specific departments of interest.