8.space management

Space Management**Unit 3 Supply Chain Management

Unit 3 Supply Chain Management

Use floor space effectively Optimise short- and long-term returns on investment into retail space Provide a logical, convenient and inspiring product-customer interfaceMake right selection of products availableCommunication of retailers brand identity *


THE SPACE MANAGEMENT PROCESS

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Stage 1

Measuring Space

The total amount of space should be measurable. In store terms this would be physical space, the width, length and height should be taken into account. In non-store terms this would be the target number of pages in a catalogue or on a website.

Stage 2

Dividing the space into selling areas

At this stage the process is concerned with dividing the total retail space into selling areas, usually defined by product category or department. The space devoted will normally be determined by historical of forecasted category/ department performance and will be expressed as a total spatial measure (for example number of square metres). Sometimes the space will be allocated on the basis of the number of fixtures that will be given to each category.

Stage 3

Determine the layout

At this stage product adjacencies will be decided, and the location of the selling areas will be determined. Individual outlet characteristics will influence this stage of the planning process; for example location of entrances, set walkways around the store, lift and escalators, pillars and divisions all need to be taken into consideration in a store plan. In a catalogue the product categories that are going to go at the front of the book need to be decided. The relationships between one product category and another also have to be considered when determining the layout.

Stage 4

Determine the space allocation of product lines

This involves the allocation of space on individual fixtures to each product line or stock keeping unit. The availability and characteristics of fixtures, individual product performances, product features and characteristics and the compatibility of products will all have a bearing on these decisions. Many retailers use sophisticated computerised space allocations systems in this stage.

Stage 4

Determine the space allocation of product lines

This involves the allocation of space on individual fixtures to each product line or stock keeping unit. The availability and characteristics of fixtures, individual product performances, product features and characteristics and the compatibility of products will all have a bearing on these decisions. Many retailers use sophisticated computerised space allocations systems in this stage.

STAGE 1: MEASURING RETAIL SPACE*


Figure 8.1 Measuring retail space using square feets/metres



Figure 8.2 Using linear measurement for space



Figure 8.3 Using cubic measurement for retail space

Sales volume and profitability can be measured in relation to the amount of space used to generate themThis provides productivity measures, e.g.sales per square feet/metreprofit per square feet/metresales per cubic metre*


Allocation of space to product department or categoryUsually based on previous performance indication, typically salesSome products require disproportionately large area (e.g. furniture) others can withstand disproportionately smaller area (e.g. jewellery)Category life-cycle may influence amount of space *


The Decompression Zone - It takes a shopper 5-15 paces to refocus and adjust to store lighting and downshift from walking-speed to shopping-speedThe Invariant Right - US shoppers turn right 75% of the timeThe Butt-Brush Theory The likelihood of a female shopper to be converted from browser to shopper is indirectly proportional to the likelihood of being disturbed

Shoppers going to the right as they enter the store*


Airport travelers drifting toward their gate will always find the fast-food restaurants on their left and the gift shops on their rightwomen's product that requires extensive examination should never be placed in a narrow aisle Invariant Right is a function of the fact that we "absorb and digest information in the left part of the brain" and "assimilate and logically use this information in the right half," the result being that we scan the store from left to right and then fix on an object to the right "essentially at a 45 degree angle from the point that we enter." "Men tend to be more impulse-driven than women in grocery stores *


Converting numerical data into a workable outlet layout, considering inflexible elements:entrances, walkways, checkouts Consider space qualityConsider logical flow through products and complementary categories*


PRODUCT ADJACENCIES*


Product Groups in a baby equipment retailer

Feeding

Baby Care

Bath Time

Clothes

Travel

Nursery

bottles

nappies

baby baths

sleepwear

prams

cots

sterilizers

wipes

soaps/liquids

daywear

pushchairs

bedding

formula milk

change mats

towels

shoes

strollers

toys

bottle warmers

travel bags

toys

outerwear

car seats

furniture

travel cots

Products, like categories are often allocated space on the basis of sales.Advantage: product is less likely to sell outDisadvantage: may not be profitable Different sales figures have advantages and disadvantages historical salesmarket share projected sales*


Capture cross-selling opportunitiesDVD players next to Monster CablesTVs next to video game hardware or TivoMP3 players next to ComputersDual-merchandise high margin convenience items in high traffic areas throughout the storeBlank tapes, batteries, and paper suppliesConnectors and cablesIncrease the size of the customers shopping basket *


SeasonalityProduct characteristics: size, weight, hazards, chilled and frozen, fragile, expensive, contaminationCustomer characteristicsmobilityFixture limitation

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Inputs: Product informationcosts, sales, dimensions, complementary products Fixture informationspecific requirements of product (e.g. shelf level), dimensions, number availableProduct manager knowledge/experiencespace and cross elasticity, stock holding objective, life-cycle stage OutputPlanogram or visual display map

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Advantages:optimises space productivity maintains consistent corporate identityallows retailers to experiment with visual displayhelps to achieve efficient assortment moving towards store specific planogramsDisadvantages:costsnot appropriate for small retailers or where displays are frequently changed (e.g. independent fashion retailer)*


Many would argue that space planning and allocation and category management go hand in hand.Space planning systems help retailers to fine tune category assortment and analyse product and category performancePlanograms by category ensure stores are implementing category plans Consumer behaviour (decision sequence) can be accounted for within the space allocation plans*


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8.space management

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