space management of a store

Visual Space Management (VSM)

Maximizing and optimizing return on retail space is one of the more crucial challenges faced

by retailers today. A solution can be to exploit Information Visualization (InfoVis) tools that

dynamically and visually explore merchandising changes over time based on a store�s

layout plan. By integrating relevant retail data sources with department store floor plans, a

visual data exploration platform could provide better enterprise-wide decision making thus

improving performance for retail space management.

Our research objective is to develop a Visual Space Management (VSM) tool that evaluates

how InfoVis technologies can be used to optimize retail space layout and individual store

department performance. VSM allows retailers to aggregate their complex temporal data

through a broad range of visual analytics tools that interactive can evaluate chain, cluster or

store-by-store performance based on seasonal sales and identify opportunities from visual

and cost perspectives. Our integrated VSM knowledge discovery framework is able to detect,

visualize and communicate temporal and multivariate spatial patterns.

Our development will follow the Visual Analytics mantra (http://nvac.pnl.gov/agenda.stm)

and use visual techniques to synthesize information and derive insights from dynamic,

ambiguous, and often conflicting data; detect the expected and discover the unexpected;

provide timely, defensible, and understandable assessments; and most important

communicate assessment effectively for action.

VSM fuses merchandising, store planning, sales, operational cost and inventory data into 2D

or 3D visualization floor plans to explore store-specific merchandising information. The 3D

store layout view in figure 1 provides information about the store's performance by

department and sub-department (department = Outdoor; sub-department = Camping,

Climbing or Walking). Each department is represented by a cube where its colour symbolizes

http://servus.itn.liu.se/projects/VSM/images/Idea.png

attribute 1 (sales margin) and height attribute 2 (sales). Transparency allows the user to see

through hidden departments and more important the sub-departments inside the cube.

With user interaction, we can closely examine each individual department data element for

a precise interpretation. For example, interactive analysis allow the store manager to gain

insights into key retail issues such as cross-store performance, actual vs. optimal layout

differences, optimal layout effect on seasonal sales and staff costs.

Figure 1: Visual user interface for VSM; (1) overview map, (2) 2D and 3D store layout, (3)department parallel coordinates, (4) product bar chart and (5) time axis view.

VSM consists of several coordinated and linked views (figure 1), each of which performs a

specific task and supports interaction to explore data and patterns from different

perspectives and at different detail levels. The linked views include:

1. A map view showing the location of the stores in Sweden;

2. A 2D and 3D store department floor plan view gives an overview of the store layout and

visualizes selected data about individual department�s performance;

3. A parallel coordinate (PC) graph serves as a visual inquire tool for selecting attributes to be

explored and provide easier identi�fication of multivariate relationships;

http://servus.itn.liu.se/projects/VSM/images/VisualLayout.png

4. The bar chart view shows the sales data for individual departments or sub-departments;

5. A time axis show seasonal performance (temporal trends) for each department � by moving

a time slider, all views are dynamically updated to reflect the selected time.

PC serves as a visual inquire tool to explore space-time and multivariate department data at

different levels. (A) shows a global view of the performance of a selected department

�Outdoor�. This highlighted line (A) crosses 8 axes in the PC, where each axis represents

an attribute (area, employees, sales etc) for that department. Dynamic range sliders (figure

2) are used for both direct manipulation queries and condi�tioning that constrains the

dependent attribute data displayed to those meeting specified parameters on all retail

attributes.

Figure 2: Parallel Coordinates view � the two dotted lines in green represent the average and median values for all stores and allows a space-time and multivariate attribute comparison of the performance for a selected department with similar departments in other stores. In this snapshot, the user has assigned a condition that constrains the number of employees to 3 and above for departments to be explored.

Layered Component Architecture

A keystone in the VSM project is the component thinking to facilitate evaluation of research

results in integrated prototypes and deployment of promising components in diverse retail

application areas. Instead of making large general-purpose applications, our development

framework (GeoAnalytics Visualization � GAV) is based on individual encapsulated objects

and customization using Microsoft�s .NET Framework, C# and DirectX as the development

platform. Generic low-level basic and functional visual space management components,

each one performing a specific task in the overall process, are put together into high-level

application components such as VSM. The layered component architecture enables broad

applicability, customization, scalability, reusability of components and shortens the

de�velopment process when customizing applications.

http://servus.itn.liu.se/projects/VSM/images/PC.png

Example of applied components in VSM are: parallel coordinates, overview map, 2D and 3D

explorative space visualization, 2D bar chart colour legend, data model and filter

components, excel data input, etc. Components obtained from this collection can be

combined into larger assemblies, such as the VSM prototype, using a variety of

interconnection mechanisms (Visual Studio .NET). Our goal is to accelerate the transition of

successful applied research into practice by evaluating our VSM components in operational

retail environments. Practical testing in close collaboration with end users proves the

validity, usability and attractiveness of each individual component.

Conceptual Data Methodology

VSM is based on an internal object-oriented database. This database contains class

structures with classes for stores, time-season, department, sub-departments and products.

The objects are created when data is read from an Excel document. Objects are immediately

assigned into in the hierarchical structure and can easily be associated with a specific

department or sub-department. Information from the database are distributed to the linked

and coordinated components through the Central Data Processor (figure 3) at the same

time, thus making sure that all views are updated dynamically and synchronised.

http://servus.itn.liu.se/projects/VSM/images/DataProcessing.png

Figure 3: VSM is based on an internal object-oriented database. Data is distributed to all view components dynamically and at the same time from the VSM data central process.

Figure 4: VSM is based on a hierarchical data structure which makes it easy to add new departments or products to the internal database. The architecture allows connection to an external SQL database.

Summary

Our ongoing applied research efforts focus on such questions as:

Investigate how parallel coordinate can serve as an information inquiry panel in the integrated VSM;

Synergy of visual representation and visual user interfaces; Support interaction to explore space-time and multivariate patterns from different

perspectives and at different detail levels; Dynamically linked, coordinated and resizable views where data also can be analysed from

different perspectives; How to provide interactive performance that can support visual analytic reasoning; Design based on cognitive and perceptual principles; Maximize pixel screen area for visualization;

VSM is a visual exploration tool for store manager. Efficient overview and control of existing

and planned merchandising patterns and floor plans which trigger fact-based space layout

decision and a higher return per square foot are some of the benefits that VSM could

provide. The strengths and weaknesses of each individual store can dynamically be explored

and compared to enterprise performance by store management providing knowledge for

decision support. Our collaborative visualization technology could also provide a network

link for local store managers to work in concert with the central planning function, and

ensure that local variations from proposed plans can be reviewed and analysed on a joined

interactive basis.

Contact

http://servus.itn.liu.se/projects/VSM/images/DataStructure.png

Mikael Jern

Related links

NVIS ITN LiTH

SAP Retail Space Management Interface

Use

In retail stores, space management can play a critical role:

It helps avoid stockouts and thereby lost sales.

It helps boost sales revenues. For example, grocery articles displayed on end caps and promotional merchandise near a department store mall entrance are more likely to capture the attention of shoppers than articles buried away in a side aisle or in the back of the store. You want to monitor prices, sales volumes, and margins so as to place your most profitable articles in high-traffic, high visibility areas.

There are several "planogram" software packages available that manage store merchandise placement. They determine the optimum location for articles within shelves and calculate the appropriate amount of space to be allotted to the articles, based on a number of factors such as sales volume, margins, manufacturer, article type, and so on. Now you can integrate these external programs with R/3, with data flow in both directions.

You can use this ALE Business Process in the following variants:

Variant 1: Space Management for Information Only

Variant 2: New Placement for an Article

Variant 3: Moving an Article to a New Location

Variant 4: Manual Shelf Space Maintenance

Variant 5: Discontinuing an Article

SAP Retail uses the following layout dimensions when modelling shelf space:

Shelf compartment (vertical placement within a rack, e.g., top shelf, bottom shelf)

Horizontal placement within the shelf

Facing (the amount of space taken up by a single article along the front of the shelf)

Front (vertical spacing)

http://help.sap.com/saphelp_46b/helpdata/en/d3/d39106d46511d1a344080009d732d6/frameset.htm

A shelf is made up of layout modules, which contain an array of articles that can be displayed in the same area (for example, laundry detergents). Thus, a layout module may contain more articles than are currently on the shelf at the moment.

There are two kinds of layout modules:

General modules: layout modules which can be used for several different stores. In this case, you need to define a reference store for which the article data within the layout module is fairly representative.

Store-specific modules: For store-specific optimization, layout modules are only valid for a specific store (for example, store X is always the reference site for layout module Y). This can cause the number of layout modules and planograms to increase significantly compared to using general modules.

Integration

There are several ways of exporting data from R/3 to an external space management program:

Executing the external space management program and exporting the key parameters

Function module shelf_space_opt_keydata_exp calls an external program exporting parameters you have specified on the command line. The external program exports these parameters and starts the space management program. (Further details are available in the function module documentation.)

Executing the external space management program without exporting the key parameters

Function module shelf_space_opt_program_exe calls the space management program and the corresponding planogram file (or, if a new shelf is to be created, then ws_execute calls only the program without any planogram file). (The call command must include the directory path where the space management program is installed.) If the layout module already exists and a planogram document has been assigned to it in the R/3 Document Management System, then the program displays this document. If there are several such documents, you can select from a list. (Further details are available in the function module documentation.)

Executing the external space management program and exporting the key parameters

Function module shelf_space_opt_ascii_gen calls an external program and exports the key parameters to a local ASCII file. The external program exports these parameters and starts the space management program. (Further details are available in the function module documentation.)

Exporting data into Microsoft Excel via OLE

Function module shelf_space_opt_MsExcel_exe starts Microsoft Excel and then exports data for the selected articles (including heading data) via OLE. (Further details are available in the function module documentation.)

These function modules serve only as templates for creating customer-specific function modules. So when you create your own function modules you must insert the actual directory paths.

The following table shows the data elements that can be transferred between R/3 and the external space management program:

Outbound data (R/3 to external system) Inbound data (external system to R/3)

Article number (from Article Master Data) Facing (linear shelf space allotted to the article)

Article short text Shelf

Unit of measure (e.g., 6-pack, 12-pack) Location within the shelf

EAN/UPC Maximum quantity

Article dimensions (size) Optimum quantity

Unit of measure for dimensions (e.g., inches, cm)

Article dimensions (size)

Merchandise category Front (vertical facing)

Inventory level Presentation quantity

Prices (cost and retail)

Sales volume

Sales revenue

Manufacturer

Flag for multiple placement (more than one shelf)

Article type

Number of multiple placements

Placement information (facing, front, shelf and location within the shelf)

Shelf quantities

Activities

For each existing layout module and for every subsequent new one you create, a version 0000 is automatically created. The layout version will be valid as of the current date. However, it will have a flag set to planned. When you are ready to trigger the posting BAPI, you must set this flag to released. You only set this flag once.

Currently, each layout module has only one version: 0000.

Each layout module has a specific starting date (the day it was created). The posting BAPI must always have the correct starting date for the layout module version 0000; otherwise, the system will generate an error message.

It is recommended that you make copies of your planogram file so that you don't overwrite your data when planning future changes. Consider using a naming convention that will help you remember the target for each plan; for example:

dairy0000.doc = your generic planogram for dairy products

dairy0199.doc = planogram for Q1 of 1999



Layout Workbench for Space Planning

SAP Retail contains a layout workbench which gives you an overview of the layout structure for a site. Within a given hierarchy, the system displays the layouts, layout modules, version and documents assigned to the version are displayed. From the layout workbench, you can:

Access all transactions involved in space management, including customizing transactions

Display documents assigned to the layout modules, along with the relevant external program (normally planogram files executed by space management programs), and to display the articles of a version.

Display all articles for a particular version, along with the status of the version (planned, active)

All functions relevant to listing control can be started from the layout workbench. In addition, you can control listing without linking to an external space management program.

Space Management for Information Only

Integration

Functions in the R/3 System

Assortment planning

Information System

Integrated article maintenance

Functions in the External Space Management Program

http://help.sap.com/saphelp_46b/helpdata/en/d3/d39109d46511d1a344080009d732d6/content.htm

Color modelling of a shelf, possibly with digital images of the individual articles

Possible highlighting of various parts of the shelf according to various key figures, such as sales volume, margin, etc.

Various reporting functions

Data Flow

There is no data exchange, since this variant is for information only. The external program is simply executed. If there is only one planogram file, it will be displayed. If there are several planogram files, you can select one from a list.

Prerequisites

Planograms modelled in the space management program according to the SAP layout concept

Modelling of the layout concept in R/3, with layout modules assigned to layouts and layouts assigned to stores

Creation of layout modules in R/3 and assignment of articles to them

Creation of a document in R/3 Document Management System, with a link to a planogram file which in turn is assigned to a layout module

New Placement for an Article

Integration



Assortment list

Workflow for space management



Importing data by calling the Read-BAPI or by extracting from Microsoft Excel


Various reporting functions Starting optimizing functions in the space management program based on key figures (such as

sales volume)

Executing the posting BAPI to export the optimized data to R/3

Data Flow

When there are placement changes to layout module data, the Assortment List function triggers a Workflow job. This selects all the relevant article data and starts the export with the function module specified in the space management profile for the relevant store (maintained in Customizing).

If you are not using Microsoft Excel, then the space management program calls the read BAPI Bapi_SiteLayMod_GetItems2 which imports the article data into the space management program.

The space management program performs any necessary optimization tasks and changes shelf contents and configuration as necessary.

The optimized article data is passed to interface's posting BAPI Bapi_SiteLayMod_Change which is then executed.

In this illustration:

1. First the external space management program is called. If there is only one planogram file, it is displayed. If there is more than one, you can select one from a list.

2. Bapi_SiteLayMod_GetItems2 is called. It reads the export data and transfers it to the external space management program.

3. Bapi_SiteLayMod_Change is called. It imports the data from the external space management program and posts it in R/3.

Additional BAPI Information

The read BAPI Bapi_SiteLayMod_GetItems2 can export data for one layout module to multiple sites (site groups, site hierarchies, or all sites) or to no sites. If you choose no sites, then only the master data will be exported.

The posting BAPI Bapi_SiteLayMod_Change has the following two indicators:

A flag specifying whether listing conditions are to be created in R/3 for each combination of site and article.

A flag that determines whether the system should check the assignment of layout modules to sites. Normally this should be set to yes. If not, then article movement data will be exported, even though the layout module (to which the articles are assigned) is not assigned to the site. This flag is also available for the read BAPI.

The posting BAPI also modifies the assignments of articles to the layout module version (that is, it can both add and delete articles).

Prerequisites




Creation of a document in R/3 Document Management System, with a link to a planogram file which in turn is assigned to a layout module.

In Customizing you must specify:

o Which information structures and which fields are to be used for goods movement data (such as quantities, revenue, and sales volume).

o Which data is to be selected for export.

o The selection period (timeframe) for determining movement data (daily, weekly, monthly).

o Which function module is to be used for data export. (The function modules serve only as templates for customer-specific modules, so you must insert the actual directory paths.)

o The specific local directory path where external programs such as the space management program are to be found.

Restrictions

The selection period in the information structure must be the same as that in Customizing.

It is important that SAP Retail be the master system and the space management program as the slave. This means that only data recognized by SAP Retail can be posted. New articles which do not yet exist in SAP Retail, or price changes not reflected in SAP Retail, will be ignored. If you attempt to delete non-existent articles, the system will write error messages to an application log.

It is not currently possible to take future layout module changes into account. Layout module changes will immediately affect the R/3 model, otherwise Workflow cannot be started. This can affect the contents of the assortment list. (Simple changes to the listing conditions, however, have no effect.)

The system only recognizes newly listed or discontinued articles by either:

o Placement changes to the relevant layout module, or

o Execution of the manual shelf space maintenance

Moving an Article to a New Location

Integration



Assortment list

Workflow for space management



Importing data by calling the Read-BAPI or by extracting from Microsoft Excel



Starting optimizing functions in the space management program based on key figures (such as sales volume)


Data Flow

When there are placement changes to layout module data, the Assortment List function triggers a Workflow job. This selects all the relevant article data and starts the export with the function module specified in the space management profile for the relevant store (maintained in Customizing).

If you are not using Microsoft Excel, then the space management program calls the read BAPI Bapi_SiteLayMod_GetItems2 which imports the article data into the space management program.

The space management program performs any necessary optimization tasks and changes shelf contents and configuration as necessary


Prerequisites





In Customizing you must specify:




o Which function module is to be used for data export. (The function modules serve only as templates for customer-specific function modules, so you must insert actual path names.)


Restrictions






o Execution of the manual shelf space maintenance program (Variant 4).o

Manual Shelf Space Maintenance

Integration


Report (transaction WPLG). Selection data includes: store or store group layout module, start date for the version, price calculation and listing check. In addition there are optional flags for:

o Listing check

o Layout check (checks the assignment of the layout modules to the stores)

o Selection of all stores to which the layout module is assigned

o No store selection (only master data is exported)

If you do not select the reference store but choose another site instead, then the system issues a warning. If you confirm warning, then the system uses article data from the layout module of the store you entered.



Importing data by calling the read BAPI or by extracting from Microsoft Excel



Starting optimizing functions in the space management program based on key figures (such as sales volume)


Data Flow

You enter the selection criteria for the report.

All relevant article data is read and either exported to Microsoft Excel via OLE, or else the external space management program is called.

If you are not using the export to Microsoft Excel , the space management program calls the read BAPI Bapi_SiteLayMod_GetItems2 which imports the article data into the space management program.

The space management program performs any necessary optimization tasks and changes shelf contents and configuration as necessary.


Prerequisites





In Customizing, additional fields for data selection must be filled out; for example,




o Which function module is to be used for data export. (The function modules serve only as templates for customer-specific function modules, so you must insert actual path names.)


Restrictions



It is not currently possible to take future layout module changes into account. Layout module changes will immediately affect the R/3 model, otherwise Workflow cannot be started. (Simple changes to the listing conditions, however, have no effect.)



o Execution of the manual shelf space maintenance program (Variant 4).

Discontinuing an Article


Integrated article maintenance Assortment list Workflow for space management


Color modelling of a shelf, possibly with digital images of the individual articles Importing data by calling the Read-BAPI or by extracting from Microsoft Excel Possible highlighting of various parts of the shelf according to various key figures, such as sales

volume, margin, etc. Starting optimizing functions in the space management program based on key figures (such as

sales volume) Executing the posting BAPI to export the optimized data to R/3

Data Flow

When there are placement changes to layout module data, the Assortment List function triggers a Workflow job. This selects all the relevant article data and exports it directly via OLE into Microsoft Excel or calls the space management program.

If you are not using Microsoft Excel, then the space management program calls the read BAPI Bapi_SiteLayMod_GetItems which imports the article data into the space management program.

The space management program performs any necessary optimization tasks and changes shelf contents and configuration as necessary



1. First the external space management program is called. If there is only one planogram file, it is displayed. If there is more than one, then no file is displayed.




The reading BAPI Bapi_SiteLayMod_GetItems2 can export data for one layout module to multiple sites (site groups, site hierarchies, or all sites) or to no sites. If you choose no sites, then only the master data will be exported.





Prerequisites

Shelves modelled according to the SAP layout concept Creation of layout modules in R/3. Creation of a document in R/3 Document Management System, with a link to a planogram file

which in turn is assigned to a layout module. In Customizing you must specify:


o Which data is to be selected for export.o The selection period (timeframe) for determining movement data (daily, weekly, monthly).o Which function module is to be used for data export.o The specific local directory path where external programs such as the space

management program are to be found. (The function modules serve only as templates for customer-specific function modules, so you must insert actual path names.)

Restrictions

The selection period in the information structure must be the same as that in Customizing. It is important that SAP Retail be the master system and the space management program as the

slave. This means that only data recognized by SAP Retail can be posted. New articles which do not yet exist in SAP Retail, or price changes not reflected in SAP Retail, will be ignored.



o Placement changes to the relevant layout module, oro Execution of the manual shelf space maintenance program (Variant 4).

Overview

SAS Retail Space Management uses powerful automation, optimization, graphics, workflow and analytics in an easy-to-use solution to foster better decisions faster. It aids collaboration across functional groups, allows management greater visibility into important business metrics and improves collaboration with vendor partners

Win the shelf and floor space battle with SAS®

Benefits

Increase revenue and inventory productivity.

o Determine optimal floor and shelf space allocations so that each store is stocked with an assortment that best meets customer demand.

o Achieve the best overall return on invested capital by driving top-line sales while maximizing returns on both inventory and shelf space investments.

More efficiently map assortments to planograms.

o Integrate space allocation with inventory, assortment planning and replenishment processes, facilitating higher levels of collaboration between display planners and merchants.

o Deploy planograms that incorporate best practice visual merchandising and presentation display techniques to enhance the customer's shopping experience.

Improve planogram performance visibility.

o Store planogram components in a relational database that supports a variety of cost, dimension and user-configurable attributes, enabling the retrieval of detailed information about each pegboard, shelf, beam, sign and SKU.

Enhance planogram content and change communications.

o Use distribution packages incorporate layout and spreadsheet views of planogram data that are configurable in terms of content and format.

o Deliver report packages to a network location or printer as PDF files. The solution's Store Layout Viewer lets users navigate and view changed planograms using a Web browser.

Features

Web browser-based client to access planograms and store layouts

Allows for improved collaboration because planograms and store layouts have typically been maintained on a desktop computer that was managed by a single, dedicated and skilled planogrammer or store designer.

Collaborative task flow

Structures the task flow by cross-functional teams to provide security, a multimedia documents reference source, an audit trail and immediate notification of responsible parties.

Planogram automation

Provides the ability to systematically create mass quantities of planograms using user-defined objectives and display requirements.

Spatial analysis without planograms

Enables spatial productivity to be measured for a homogenous merchandise hierarchy member assigned to specific space in the store layout.

A planogram is a diagram of fixtures and products that illustrates how and where retail products should be displayed, usually on a store shelf in order to increase customer purchases.[1][2] They may also be referred to as plano-grams, plan-o-grams, schematics (archaic) or POGs.

Overview

A planogram is often received before a product reaches a store, and is useful when a retailer wants

multiple store displays to have the same look and feel. Often a consumer packaged goods manufacturer

will release a new suggested planogram with their new product, to show how it relates to existing

products in said category. Today, planograms are used in a variety of retail areas. A planogram defines

which product is placed in which area of a shelving unit and with which quantity. The rules and theories

for the creation of a planogram are set under the term of merchandising.

It is primarily used in Retail sector.Fast-moving consumer goods organizations and supermarkets largely

use text and box based planograms that optimise shelf space, inventory turns, and profit margins. Apparel

brands and retailers are more focused on presentation and use pictorial planograms that illustrate "the

look" and also identify each product.

http://en.wikipedia.org/wiki/Archaism

http://en.wikipedia.org/wiki/Schematic

http://en.wikipedia.org/wiki/Planogram#cite_note-1

http://en.wikipedia.org/wiki/Planogram#cite_note-0

http://en.wikipedia.org/wiki/Diagram

[edit]Primary targets

Primary targets which should be achieved with planograms:

creation of an optimal visual product placement

creation of an optimal commercial product placement

In short, the primary targets can be summarised with a turnover and profit increase.

The visual product placement is supported from different theories:

horizontal product placement: To increase the concentration of a customer for a certain article, a

multiple horizontal placement side by side of one product is applied. Different researches found that a

minimum placement range between 15–30 cm of one single product is necessary to achieve an

increase in customer advertence (depending on the customer distance from the unit).

vertical product placement: A different stream with its follower is the vertical product placement. Here

one product is placed on more than one shelf level to achieve 15–30 cm placement space.

block placement: products which have something in common are placed in a block (brands). This can

be done side by side, on top of each other, centred, magnetised.

One can see the varieties of planogram results by simply visiting a local supermarket. Standing in front of

say, a frozen pizza section featuring the products of a single manufacturer, one can see how the variety

of products is displayed and how related products (such as pizza rolls) are treated in the overall product

display for a particular pizza manufacturer. Similarly, one can visit the boxed cold cereal aisle, which

comprises the various planogram strategies by the different cereal manufacturers. The ultimate

effectiveness of the planogram of course is always measured by sales volume.

Next to the visual placement the commercial placement is the other important pillar of a planogram. Here

the question has to be answered which products should be placed. Two factors for the decision-making

process can be differentiated.

Market share placement – margin placement

Market share placement means the placement of turnover bringers. Different market research

institutes like Nielsen, IMS are collecting turnover data of all kind of products and calculate from this

data the market share of a certain product in its market segment. With the help of this data products

can be selected which should appear in a shelving unit in a “A” location. A simple calculation of

turnover data from a single store is better than nothing for this purpose however it would be better to

use data from a group of stores.

The margin placement is influenced from the margin a product brings. The higher the margin is of a

product the better the location should be where it is placed.

[edit]Derivative targets

Derivative targets:

To communicate how to set the merchandise .

To ensure sufficient inventory levels on the shelf or display.

To use space effectively whether floor, page or virtual.

To facilitate communication of retailer’s brand identity.

To assist in the process of mapping a store Store mapping

Lesson 9

Store Planning, Design and Layout

Objective: After studying this lesson you will be able to understand: Store planning, Location planning, types of location, Store design retail mix, and the concept of space management in retail stores.

Structure:

9.1. Store planning

9.1.1. Location planning – types of locations

9.1.2. Site selection

9.2. Store design retailing mix

9.3. The space mix

9.4. Effective retail space management

9.4.1. Store layout: the circulation plan (the “silent guide”)

9.4.2. Floor space management

9.5. Summary

9.6. Key Terms

9.7. Questions

9.8. References

9.1. STORE PLANNING:

An important feature of Store Planning is Location Planning followed by Site Selection. It is the method of selecting the right location and an appropriate site for the store with the catchment’s definition for each store. The rollout plan defines the types of location selected on the basis of the retail format.

9.1.2. LOCATION PLANNING – TYPES OF LOCATIONS:

(A) High – Street Location characterized by

i). Very busy with high customer traffic.

ii). Has an array of retail stores in small sizes.

iii). Has stores that are generally found in clusters based on product categories.

iv). High real – estate rentals.

Examples: linking road in Bandra. Mumbai, Brigade Road in Bangalore.

(B) Destination / Free standing location characterized by

i).Does not have high footfall rate (customer traffic needs to be pulled in through the store’s marketing efforts or product/service/process differentiations).

ii).May not be a commercial retail area at all.

iii).Low real – estate rentals.

iv). May have large parking area.

Examples: Phoenix Mills Compound and Shoppers’ Stop in Mumbai.

(C) Shopping Centre /Mall Location characterized by

i). Has existing mall traffic.

ii). Has a clean environment.

iii).Has a designated parking area.

iv). Medium to high rental cost.

Examples: DLE Mall in Delhi, Spencer Plaza in Chennai, Crossroads in Mumbai.

Location Mapping: while planning the location strategy for the organization location mapping is crucial. It is also important to map the locations, so that extent of each store’s reach to the customers is well defined.

Location Parameters: It is necessary to define the store location identification variables in a format and see if the desired attributes are available.

9.1.3. SITE SELECTION:

Site selection in retailing refers to the type of building the retailer requires and its affordability. Retailers should decide whether they should own the property, lease the premises on rent or have a joint venture with the landlord. Site selection depends on the nature of the building, facade requirements, size requirements and costs. The size selection format is furnished below as a specimen.

Address of the store

Details of adjacent occupants north ,east west, south

Can the site be used commercially?

Name & address of the owner

Is the site free of encumbrance?

Are all relevant paid and Currently up to date?

Is the site free of any civil suit?

When was the building constructed?

Total number of floors

Other significant facilities nearby

Details of facilities space/ Parking space

Revenue details / rate per q.ft./Details of built-up carpet Space ratio/terms of contract (if JV or lease)

Fig: Detailed site Selection variables

9.2. STORE DESIGN RETAILING MIX:

The requirement of customers visiting a local shop differs from those who visit a specialty goods retail outlet or a department store. Each retailer strategically plan a mix of elements to match the behaviors of the customer. A mix of the following six elements meets the physical and emotional needs of the customer:

(1) Employee Type and density: The retailer employs sales force match the selling and image needs of his shop. A specialty shop like one of selling readymade garments will have a higher density of staff at about one per 100 sft. And the salesperson would be one who caters to the needs of the customer – speak the local language and look more homely (as the customers are mostly women). In contrast, in a large department store the density of staff would be one per 450 sft. They will be well educated and suitably dressed (in most cases in western clothes as these form a major part of the store offering).

(2) Merchandise Type and Density: The type of merchandise determines its density in the store. A supermarket is very dense and averages about 7,000 per prices per 100 sft whereas a large department store would have about 700 pieces per 100 sft. A designer – wear exclusive store, a boutique or a furniture retailer would have low density so as to make the merchandise appear

exclusive. The density of merchandise also determines the margins planned on the merchandise. The lower the density the higher the margins.

(3) Fixture Type and Density: The fixtures have to complement the value of the merchandise. A jeweler uses a lot of expensive woodwork and stones like marble and granite to add value to his merchandise, while a sportswear goods store uses more of metal and plastic. The density of fixtures is measured as the number of fixtures per 100 sft. of store space. This should complement the density of the merchandise as it has a big impact on the convenience of shopping.

(4) Sound Type and Density: Sound can be pleasant or unpleasant and can have a direct impact on the store atmosphere. adds to the intensity of the experience. An unpleasant sound like motor traffic or the roar of a plane, on the other hand, can have a negative effect. The category of the merchandise determines the type and density of sound. Soft instrumental music is usually used in jewellery and cosmetics, while the casuals and youth fashion wear segments are complemented by contemporary sound tracks from new bands. Department stores play music based on the category of merchandise.

(5) Odour Type and Density: Like sound, odour too has a positive or negative effect on the store atmosphere. Positive odours like that of fresh coffee beans or flowers add to the shopping experience in the men’s wear and cosmetics departments in a store. Negative odours like those of a musty carpet, cigarette smoke, etc. can drive the right way. The strength of the odour is also important and even the right odour if it is too strong can have a negative effect.

(6) Visual Type and Factors: These are a result of the overall store presentation – the interior design, display and visual merchandising. Elements like lighting and colour can be controlled to make customers buy more. Warm yellow shades of lights complement gold jewellery as they add richness. Natural shades (day light colours) are good for garments as they bring out the colour of the merchandise. Warm colours like bright red or yellow are said to increase the pulse rate in human beings and trigger impulse purchases. Softer colour like pastels keep the pulse rate comfortable and are used in merchandise backdrops that need a longer time for inspection and selection (like watches and jewellery).

9.3. THE SPACE MIX:

For the retailer space is money. The store has to be planned in such a way that it optimizes the selling area and minimizes the non-selling parts. The selling area is used to present the merchandise and the non-selling part is accounted for by circulation space, aisles, staircases, lifts, facilities, the back area, etc. The area mix in a typical department stores is: selling area about 65%, circulation area 15% and back area 20%.

In a ready-made garment retail store, planning the size of the selling space starts with a wardrobe audit where a sample size of the customer segment is intercepted and their wardrobe mix of garments and accessories mapped. This then determines the number of styles and the range width of the category. Then a business plan is made based on this integration with space.

The selling space is then configured in terms of size and location of goods based on the mix of staple, convenience and impulse merchandise.

Staple goods constitute about 55% of the store offering and are kept at the central and deeper ends of the store. This enhances visibility, since the customer has to pass through the entire store to reach them. The shirts and trousers section in department stores form the staple merchandise. Similarly, grains and sugar are the staples in a supermarket.

Convenience goods constitute about 30% of the store and are bought in multiple units. These need to be in convenient locations in the store to ensure conversions. Undergarments and white basic cotton T-shirts in a department store are convenience merchandise.

Impulse purchase merchandise – which usually constitutes about 20% of the store and has the highest rate of sale and is given maximum exposure in order to tempt the customer to buy them. Candies in a supermarket and socks and hair accessories in a fashion store are impulse purchase items and are kept near the cash counters and entrances. The customer picks them up after shopping for convenience and staple merchandise. The locations of various goods are chosen carefully to ensure that the customer is exposed to the entire store, thus increasing the possibility of a purchase.

In the words of Ajay Mehra, CEO of Times Retail (Planet M) says: “space management does not end with just optimization, but has a much larger opportunity for merchandise promotion and display which not only can bring profit for a retail organization but entertain and delight customers too.”

9.4. EFFECTIVE RETAIL SPACE MANAGEMENT:

The sight of a good retail store with attractive windows and an enticing entrance attract the customer into entering. The customer enters the store and often keeps walking inside following the walkway wherever it leads, or sometimes takes a while to look for directions within the store. Sometimes the customer’s attention is drawn to certain displays and merchandise presentations before he moves on. To reach his destination inside the store, the customer tends to follow directions to reach there, especially in a big box format. Seldom does he realize that subconsciously he is directed to ‘walk’ the entire store and thus exposing him to all that the store has to offer. This is achieved through a well thought-out and laid-out retail floor design.

A well-planned and properly designed retail floor achieves a great deal for the store:

(a) It enables a smooth and efficient customer flow into the store and within it.

(b) It helps the customer reach and access the merchandise he is looking for, without fail.

(c) It helps create a feeling of comfort in the minds of customers, enabling them to waltz their way through without facing any bottlenecks on the way.

(d) The aesthetics of a well-planned floor are a visual feast for the customer and trigger the ‘come-back’ feeling in him, as he feels a sense of belonging in the store.

(e) A well laid-out floor, in essence, helps the store to sell more effectively and retain customers.

Effective retail floor space management is critical to the successful operation of a retail store, as more and more sales from the same space would lead to increased margins for the store. According to R. Sriram, CEO of Crossword: “Space planning is integral to the success of any retail store since the biggest investment in retail is in space.”

9.4.1. STORE LAYOUT: THE CIRCULATION PLAN (THE “SILENT GUIDE”)

Once inside the store, the customer needs to be guided silently to where he/she wants to go and also expose him/her to the entire store offering. This can be achieved by planning the circulation and the location of the merchandise.

While designing store layout, circulation planning is done to lead the customer from area to area with the help of aisles that weave through the merchandise area. Focal points highlighted with accent lighting and displays strategically placed along the aisles pull the customer from section to section in a ‘Pinball Effect’. A series of these ensure that the customer is silently guided through the entire store.

The width of the aisles is planned according to the density and traffic pattern. The main aisle or ‘highway’ in a department store in six feet wide , which is the width of a double doorway, and facilitates easy passage in both directions. The side aisles or ‘side roads’ that branch out are three or four feet wide. In supermarkets, the aisles are three feet wide and form a denser grid around the fixtures.

The aisles form a circulation pattern that can be of different types depending on the store configuration. The area occupied by the aisles is normally 12-15%

of the store carpet area. Some of the layout circulation types used is Free Flow, Grid, Race Track, Herringbone and Spine.

- Free Flow Circulation is used in stores where the merchandise and fixtures are grouped in clusters as in boutiques.

- Grid Circulation is used typically in a supermarket where the aisles and fixtures are at right angles to each other.

- Race Track Circulation issued in larger and wider stores where the customer is made to circle around the floor and get back to the beginning, usually the lift or the staircase lobby, to move to the next level of the store.

- Herringbone Circulation is used for a narrow store of maximum 40 ft width where the highway is a single two-way one, bisecting the store along its length with ‘side roads’ leading to the walls from it.

- The spine form is a Herringbone layout without the ‘side roads’. Says Sriram of Crossword: “Since the browsing experience in books is a critical part of the book-buying process, circulation planning plays a critical role, enabling the right experience.”

9.4.2. FLOOR SPACE MANGEMENT

One of the common problems in retail floor space management in India is lack of attention paid to space productivity. Usually space productivity does not figure in the Key Result Areas of either the Store Operations or Buying and Merchandising departments. But ideally both should pay attention to this area. Store Operations, since it is responsible for recorders and replenishments, and Buying and Merchandising because it is accountable for the Gross Profit Return (GPR) on the space occupied by the merchandise. Following are the variables to judge the performance of space management in the retail stores.

Variables to Judge Space Performance

1. The sales output and the ensuing margins.

2. The inventory holding that lads to sales and the ensuing margins.

In the words of G.S.M. Ghaznavi, former Vice-President ( Retail) at Bata India Ltd:’ One must analyze statistics of the value of merchandise and margins broken down to the space occupied by micro-groups of merchandise in the store. This will help retailers develop a blueprint for profitable deployment of space especially in chain store operations. In addition, not only should merchandise categories be placed in the right locations that will maximize

profitability but such placement should help attain uniformity for comfortable shopping by customers.”

Rules for successful space Management:

1. Remember the golden rule of the retail floor space planning and management game – the convenience of the customer comes first.

2. Provide the greatest opportunity for the customer to walk around the store and watch though all the merchandise displayed.

3. Optimize the trading space to achieve maximum sales, while not neglecting the non-trading area for customer convenience/concessions in order to ensure that they spend a longer time in the store and increase revenues.

4. Make the right floor space management decisions after every space audit , making the necessary course-corrections on time as space costs a good deal of money.

5. Appeal to all five senses of the customer by creating an aesthetic and functionally effective ambiance.

9.5. Summary:

An important feature of Store Planning is Location Planning followed by Site Selection. It is the method of selecting the right location and an appropriate site for the store. Location planning generally depends on the types of locations and their characteristics. The important types of locations are High-street location, Destination / Free standing location, Shopping Centre /Mall Location. Site selection in retailing refers to the type of building the retailer requires and its affordability. Site selection depends on the nature of the building, facade requirements, size requirements and costs. The size selection format is furnished below as a specimen.

A mix of the following six elements popularly called as retail site selection mix meet the physical and emotional needs of the customer they are, Employee Type and density, Merchandise Type and Density, Fixture Type and Density, Sound Type and Density, Odour Type and Density, Visual Type and Factors,

For the retailer space is money. The store has to be planned in such a way that it optimizes the selling area and minimizes the non-selling parts. The selling area is used to present the merchandise and the non-selling part is accounted for by circulation space, aisles, staircases, lifts, facilities, the back area, etc. The selling space is then configured in terms of size and location of goods based on the mix of staple, convenience and impulse merchandise.

The sight of a good retail store with attractive windows and an enticing entrance attract the customer into entering. A well-planned and properly designed retail floor achieves a great deal for the store. While designing store layout, circulation planning is done to lead the customer from area to area with

the help of aisles that weave through the merchandise area. Finally, it is very much important to judge the space performance. To Judge Space Performance are the sales output and the ensuing margins and the inventory holding those lads to sales and the ensuing margins.

9.6. Key Terms:

Site Selection: it refers to the type of building the retailer requires and its affordability.

Space Management: Planning, designing and creating retail floors to achieve great deal with customers.

9.7. Questions:

1. Explain the salient steps to be taken in planning and designing a stores layout

2. Explain the concept of “Space Mix”.

3. Describe the key parameters that you suggest while judging the performance of space management.

4. Suggest some guidelines for successful space management.

9.8. References:

Michael Levy, Barton A Weitz; Retail management; Fifth Edition; Tata Mc Graw-Hill Publishing Company Limited.

Barry Berman, Joel R. Evans; Retail management; Eighth Edition; Pearson Education Asia.

www.wikipedia.org

Once the inventory comes inside a retail store, the next big thing which comes inside the mind of a retailer

is to decide where to put it and how much area should be allocated to the specific product. The decision

of where in the store the products will sit is very important step in retail since store layouts are crucial to

the shopping experience. Products need to be easy to locate, be near related products, and have the

correct facings. Space management is about maximizing every inch of the selling floor.

Store design

Accounting the derivatives of store designing, Jagdeep Kapoor, chairman and managing director,

Samsika Marketing Consultants Pvt. Ltd. mentions, “Navigation and access and ease of browsing and

picking up determine the store design.”

Chandru Kalro, executive VP-marketing, TTK Prestige Ltd, says, “Our stores are designed in such a way

that the customer can have a non-obtrusive shopping experience. But in value formats, catering to

masses, it is packing as much merchandise as possible with not much emphasis on having it very

organized. In formats catering to high end customers, stores are designed to make the shopping

experience great and there is a ‘stunner’ factor in the store.”

Location & space

A literal meaning of sales display is - arranging systematically saleable goods so as to attract the attention

of the customer. In retail industry, product visibility of any brand is necessary to promote sales. Many a

times, space is often limited and merchandise to be displayed is more, so one needs to really manage the

space well - herein comes shelf management. Kalro says, “Shelf management plays an important role in

managing merchandise well and helps to focus on categories or products that retailer intends to promote.

When asked how do retailers decide what to put and where on shelf, Kalro said, “Buyers do not always

come to the store with a preset list in their minds about the products they want to buy. We plan our shelf

to ensure all products in our range are well displayed as lot of the purchase is impulsive. Also while

planning our shelf we see to it that there is optimum utilization of space and maximum amount of

merchandise can be displayed.”

Visibility & sales promotion

According to Kalro, product visibility plays a major part in customers' buying decisions - ‘One buys what

one sees’, therefore, product visibility is very important. It is a function of persistence, precision and

repetition - Your message needs to be heard repeatedly to rise above the background noise of daily

business. Organized retail business in India is still competing to spread its foothold in India. The modern

retailers are trying to increase the consumption – to create an urge for purchase; make people buy even if

there is no great urgency to purchase. Supporting the fact, Kapoor, says, “Product visibility is what leads

to impulse purchase inside your store. Product must be neatly stacked and visible face up.”

Many brands and retailers try to engage the customer at the point of sale. Product promotion inside the

store is very important to make consumers aware of sales promotion schemes as advertising in mass

media is expensive and deliveries are not 100 percent. Today brands and retailers are cutting down on

expenditure in mass media and focusing on the customer contact point. This is going to become more

pronounced as the modern retail grows in India.

Competition among brands

The next lesson of shelf management is managing competition among different competitor brands. While

providing answer on how a brand survives in front of another brand having an ongoing offer inside the

store. Kalro says that “even if there is no offer on a brand and it is there on another brand we try to do

justice to both .If the brand has an ongoing offer – the offer is highlighted, but if another brand has no

offer on it –its product features are highlighted to highlight its presence inside the store. Though, at TTK

Prestige, we have only single brand stores, there is competition amongst sub brands within categories.

But we try and do justice to all sub brands or categories.”

Kapoor also believes that consumers have their own preferences. He says, “Some people have

preferences for brands, on the other hand some have preferences for schemes and deals. Therefore all

the brands inside the store thrive depending on the consumer preferences. Both need to be given equal

importance.”

So does that mean the brand featuring an ongoing offer have its negative impact on brand without offer?

As per Kalro, offers are not the end of it all. Customers are ready to buy brands for the benefit and value

proposition. There are many brands that have no offers at all and yet they sell.”

Agreed with the Kalro point, Kapoor says, “I also believe that offer doesn’t affect sales too much. In fact

the brand with the offer can have a negative impact on the consumer giving a signal that is slow moving

and hence the need for an offer.”

space management of a store

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