Dr. Ron Lembke
RETAIL / SERVICE LAYOUTS
RETAIL/SERVICE LAYOUT
Design maximizes product exposure to
customers, profitability per square foot
 Decision variables

 Store
flow pattern
 Allocation of (shelf) space to products

Types
 Grid
design
 Free-flow design
Video
RETAIL/SERVICE LAYOUT
GRID DESIGN
Grocery Store
Meat
Milk
Bread
Office
Carts
Checkout
RETAIL/SERVICE LAYOUT
FREE-FLOW DESIGN
Apparel Store
Trans.
Counter
Feature
Display
Table
RETAIL STORE
FLOW GUIDELINES



“Prisoner” aisles make you enter store
in a particular route, and pass by
certain displays
Often contain less profitable (for the
store) brands
“Decompression Zone” people walk
past first rows of items before settling
into shopping mode.
RETAIL STORE
FLOW GUIDELINES



Bakery, coffee shop,
restaurant spread aromas
by entrance to stimulate
taste buds
Siren song of the Starbucks
(Safeway)
Food samplers throughout
store do same
RETAIL STORE FLOW GUIDELINES
Milk



Frequently purchased
items at far sides of
stores so you have to go
through entire store
(produce or meat).
Profitable sections like
produce placed where you
keep running into them
Colorful, fresh produce
affects opinions about
store
Meat
Bread
Produce
PERIMETER ITEMS






People follow perimeter pattern
Sale items on end – everyone sees
Half of a store’s profit comes from items on the
perimeter
Breakfast cereal brings in the most dollars per square
foot
Manufacturer incentives increase profitability of soft
drinks
“Anchors” at ends of a section: milk and butter at
opposite ends of dairy case
RETAIL STORE FLOW GUIDELINES


Major items in middle of
aisles so you have to walk
down into middle of aisle
(Cereal, peanut butter)
‘Power items’ on both sides of
aisle so you have to look at
both sides
Peanut
Butter
Cereal
RETAIL STORE
FLOW GUIDELINES




End caps for highvisibility sale items
Large quantities of
inventory serve as
“psychic stock”
If there is a lot of it, it
must be on sale
Stimulates sales
©
1995
Corel
Corp.
CUSTOMER
FLOW





Eliminate crossover aisles?
less wasted floor
space,
you have to look
at more items,
the more time
you spend in the
store, the more
you buy.
Who wants to
read signs?
SHELF SPACE
Shelves: 3.5x3.25 = 11.375 sq in.
Store: 9*5.5 = 49.5 = 23% of store
SHELF SPACE PLANOGRAM
2 ft.
SUAVE
SUAVE
VO-5
PERT
VO-5
PERT
PERT
VO-5
PERT
VO-5

VO-5

Computerized tool for
shelf-space
management
Generated from
store’s scanner data
on sales
Often supplied by
manufacturer
 Example: P&G
PERT

5 facings
SHELF PLACEMENT
Companies prefer to be at eye-level or at childreaching level
 Close to leading brands or high-draw items:
snack foods next to the peanut butter or across
from the cereal:
 Lots of kids visit the area

SLOTTING FEES






Manufacturer pays retailer to get a product into a store
35,000 new grocery products per year
Grocery stores often stock 30,000 items
Impossible to evaluate all new products to choose the best new
ones
Slotting fees guarantee grocer profits on a product, help
balance risk of trying unknown product.
Grocery is a narrow margin business, slotting fees can
represent a significant revenue source.
SLOTTING FEES





Senate Small Business Committee held hearings on
them in 2000.
Industry refused to cooperate with GAO.
Growers of produce (not just brand names) now
getting involved and complaining.
Small businesses claim they can’t afford the big
payments big companies can make.
Advocates say small companies can “put their money
where their mouths are” just like anyone else
SUMMARY
Retail layout types: grid, free-flowing
 Customer flow and most-frequently purchased
items important considerations
 Human factors extremely important in retail
layouts

 Buyer
psychology, stimulate taste and smell
 No backtracking,
 Shelf position, as well as placement within store