The Retail Store: Design For Profitability



The Retail Store: Design For Profitability

H Dufton, JM Bailey and T Hopkins

Retail design has become vital over the past few decades as a method of creating competitive advantage. The following examines the significance of store design, with particular reference to layout, displays and the encouragement of impulse purchasing in fashion retailing.

Today's retailers are finding themselves in an increasingly competitive environment. No longer do they compete on just price and quality, but on a wide range of other aspects such as location, technological innovation and store design. Small retailers are finding it difficult to keep up with the ongoing innovation necessary in competing effectively with the larger chains. Much research has been carried out on various aspects of the Retail Marketing Mix (McGoldrick, 1990) which consists of:

Retail location

Product selection and buying

Retail pricing

Retailers own brands

Advertising and promotion

The selling environment

Retail service

Retail location is often considered to be the most important element of the retail marketing mix due to the time and expense that is needed to find the right location. There are businesses that specialise in helping retailers to find a location, such as Experian, who can even estimate profits at various sites based on their research. Mistakes are costly, and with the new resources and technology available to retailers, mistakes are made less often. Therefore as retailers are getting locations right, the other elements of the retail marketing mix become more important in gaining competitive advantage. There has been surprisingly little literature published on the selling environment considering that :

"Rapid development of large new stores in 1970's drew attention to the need to consider the store selling environment as a whole to ensure that the shopping experience is convenient and attractive" (McGoldrick, 1990).

Retailers in the 1980's became more interested in the design of the store for example, at Next, George Davies and at Habitat, Terence Conran (Gorb, 1988). It is particularly important in fashion retailing that competitive advantage is created by being different and presenting a carefully considered image based on the target market needs and wants. However this uniqueness of style was often accompanied by a lack of functionality. Today, retailers are trying to combine creativity with practicality in various ways.

Consumers are becoming more critical of stores and expect more from them to make shopping a pleasurable activity. The increased leisure time that society has, has led to more people considering shopping as a leisure pursuit (McFadyen,1985). People are therefore more likely to compare stores on various merits and will change their store preferences according to this.

The main retailer's aims now are not only to attract customers to their store but to keep them there for as long a possible, for them to spend as much as possible and to return and hopefully repeat the experience soon. Consumers tend to be inquisitive and will enter a new store just to see what it is like, it is persuading them to stay, make purchases and return again that is more difficult. In fashion retailing in particular, shoppers enjoy change, merchandise needs to be moved around frequently, combined with the introduction of new lines, so that consumers, especially innovators do not become bored. Displays and point-of-sale goods need regular replacement to ensure that they are eye-catching.

It is generally considered that the main aspects of the selling environment are:

store layout;

special displays;

impulse purchases at the point of sale.

Store Layout

The layout of a retail store influences the route that shoppers take around the store and consequently the products that they see. Although the layout is influenced by the size and shape of the store, it is possible for the retailer to manipulate the flow of traffic and pull and push customers into different areas of the store by their choice of layout. This helps to ensure that minimum congestion occurs in problem areas. "Customers who shop in an entire store buy far more than those who shop in only selected areas" (Buttle, 1984). However the layout must be considered in relation to the type of retailer and the image that they are trying to portray. There are three main types of layout: Grid, Free flow, and Boutique.

Grid Layout

Due to the well defined aisles and merchandise space, customers normally move around the store in a predetermined order. It is cost effective as many products may be displayed on relatively cheap fixtures, however there is little flexibility concerning the movement of fixtures, which can lead to an uninteresting layout but it has the advantage of easy maintenance. This layout is particularly suited to supermarkets because shoppers need to move around as quickly and easily as possible. Due to the height of the fixtures, overhead signs are necessary in helping the customer to locate the products. If combined with the use of special displays, retailers can pull the customers in certain directions, which gives them some flexibility. Simple tactical organisation of goods where standard items may be sited at areas distant from the access points will draw customers right through the shop past the impulse goods.

Free Flow Layout

The irregular pattern of fixture arrangement leads to greater flexibility for both movement of fixtures and shopper freedom. Aesthetically, this method is more appealing than the grid layout as it is easier to create a specific image. Due to the low height of the central displays and the need for random paths, poor use is made of space and so it is not cost effective. If too many fixtures are used with the intention of improving space, then the overall effect can be overcrowded, which will alter the intended image. Fashion stores usually use a free flow layout, in order to create an image of the lifestyle that corresponds to the garments being sold.

Boutique Layout

Concessions in department stores are organised as a boutique, which is similar to a free flow layout, but with such a limit on the available space, it is less flexible. Although image can be created, space is not used economically and is therefore expensive.

Layout Research Techniques

Some retailers carry out tracking surveys when deciding on their store layout, to decide where items should be positioned within a free flow layout, not only to maximise sales, but also to prevent overcrowding in certain areas of the store. A study by Buttle (1984) "reported increases in sales of 11% mostly attributable to layout changes following a tracking study".

The process of tracking involves marking on a plan of the store where a purchase is made and where a purchase is considered but not made (Rogers, 1985). However, consumers must be tracked discreetly for accurate results. Tracking helps to identify "bottlenecks" in the traffic flow and "dead areas" (Rogers, 1985). These areas can then be manipulated and tested further until an optimum solution is found. Recently stores have started to use electronic tracking methods by the use of discreet cameras.

|LAYOUT |DESCRIPTION |ADVANTAGES |DISADVANTAGES |USES |

|Grid |Clear route and aisles. |Cheap. Easy maintenance & |Not flexible |Food and DIY stores. |

| | |movement |Cheap image. | |

|Free Flow |Random fixture positioning.|Shopper freedom |Expensive. |Clothing and department |

| | |Flexibility. |Poor use of space |stores |

| | |Image creation | | |

|Boutique |Small version of free flow |Aesthetically Appealing. |Very expensive Very poor use of |Speciality stores. |

| | | |space. |Concessions. |

Table 1 : Store layout summary.

Store Layout in Fashion Retailers

The majority of fashion retailers use a free flow layout because it enables them to create a more specific atmosphere and image. Image is defined as "the way in which the store is defined in the shoppers mind, partly by the functional qualities and partly by an aura of psychological attributes" (Martineau, 1958). Therefore layout is just one part of store image, other factors include colour, music (aural), scent (olfactory), types of promotion used, service and store cleanliness. The development of store image is considered preferable to gaining improved use of space. Therefore it is the image of a fashion retailer that is profitable. However image is easily damaged so the positioning and overall look of the store is vital. For the majority of women, clothes shopping is seen as a leisure activity and hence they want the experience to be a pleasant one. An overcrowded store would tend to annoy shoppers, who would move on to more inviting premises.

Special Displays

Sales promotion is defined by "communication between the retailer and consumer by using the facilities in the store to achieve planned sales targets" (Rosenberg, 1995). Special displays are just one of the many types of promotional activities that may take place and have a significant impact on store layout and effectiveness. There are five main types of display (Rosenbloom, 1981) which are determined by the type of store and its image.

An open display surrounds the consumer with products and invites them to look and touch the goods. A theme display which is based on a season or event is used to promote an appropriate product range. Lifestyle displays are a more subtle invention, not necessarily aimed at selling a particular product, more the sale of an image, which has a corresponding activity. Co-ordinated displays which contain items that are normally used together, are a way of increasing multiple purchases. "Related item displays sold as much as 418% more than when components were displayed separately" (Buttle, 1984). Classification dominant displays which contain all varieties of one product are used to give the impression of a wide selection. Certain of these may be used very effectively together, for example Lifestyle and Co-ordinated.

Special Displays in Fashion Retailers

Fashion retailers use a variety of display methods. The display begins in the shop window, and gives people an idea of what they will find in the store and what special promotions are currently taking place. Retailers try to continue the theme from the window to the interior. Therefore the window display is vital in attracting customers to the store. The retail theme is usually lifestyle based, from research on the target market. However lifestyle marketing is not just about the actual lifestyle of their customers, but it focuses on the ambitions and aspirations of the group. Therefore the products consumers buy are for who they see themselves as being or aspire to be, this is normally different from who they actually are. The types of lifestyle images presented to customers depend on the type of clothing being sold. They create a more modern image than the traditional use of mannequins, and they save on valuable sales space, without an overcrowded look.

Open displays are frequently used in fashion retailers to give a relaxing atmosphere, so that customers feel that they are free to browse. The feel of the garments is very important and open displays enable this, without pressure from shop assistants. Co-ordinated displays are particularly important in fashion retailers in prompting multiple purchases. Matching items are placed together, along with accessories such as hosiery, jewellery and bags so that shoppers treat them as an entire outfit, hence increasing multiple purchases. Classification dominant displays are sometimes used in large, low priced retailers as it enables them to present vast amounts of stock. However this can give a rather cluttered image so is not suitable for many types of fashion retailers.

Impulse purchases at the point of sale

Difficulties have been found in describing exactly what an impulse purchase is, which has caused confusion within the literature. Kollatt and Willett (1969) suggested that "There are considerable differences of opinion as to what is meant by an impulse purchase". Rook and Fisher (1995) described impulse purchasing as "a consumers tendency to buy spontaneously, unreflectively, immediately and kinetically". This definition points out that impulse purchasing is a natural, quick reaction, but it does not suggest a situation or time at which it may occur. Similarly, Goldensen (1984) defines it as "a strong, sometimes irresistible urge to act without deliberation". However as these definitions do not suggest when and where it would take place, the decisions could be made anywhere, such as at home following a television advertisement or out-of-doors after noticing an advert on a billboard. Thus the decision is made in advance which makes it less impulsive. A more appropriate definition would therefore be "a buying action undertaken without a problem previously having been consciously recognised or a buying intention formed prior to entering the store" (Engel and Blackwell, 1982)

Stern (1962) identified nine product-related characteristics that influence the chance of a product being bought as an impulse purchase:

low price;

marginal needs;

mass distribution;

self service;

mass advertising;

prominent store display;

short product life;

small size or light weight;

ease of storage.

Often consumers are wary of making purchases that are impulsive and do not like to admit that they "cut short their search for information" (Betts, 1997). Impulsive purchases are associated with irrationality, immaturity and lower intelligence (Rook and Fisher, 1995). People are more likely to make a purchase if they can visualise a need for it. This may be achieved by the use of displays, featuring a situation in which a product may be used, with which many people could identify. Smaller products are more likely to be bought impulsively (Stern, 1962) because they are less obvious to others. Generally a low price is more likely to lead to an impulse purchase than a high price because consumers feel that there is less risk involved in buying a lower priced item. Products that have "greater visibility" (Buttle, 1984) such as those featured on a display are more likely to lead to an impulse purchase.

Four categories of unplanned purchase have been suggested (Stern, 1962):

|Reminder impulse buying |occurs when a consumer is in a store, sees a product and this reminds them of a |

| |previous experience or recall, such as a friends recommendation or a television |

| |advert |

|Pure impulse buying |would occur where there has been no preplanning involved in the purchase. |

|Suggestion impulse buying |takes place when a shopper is introduced to a product that they have no previous |

| |experience of, by some form of in-store promotion. |

|Planned impulse buying |would take place when a shopper has plans to buy a product but their final |

| |decision is dependant on price or brand. |

Retailers can take advantage of all these types of impulsive behaviour with the use of special displays, price reductions and product benefit signs.

Impulse-purchase goods may be located in a number of positions within the retail store, this is influenced by the store layout. Impulse purchases may be initiated by the use of displays, such as promotional boards, supermarket trolley adverts, subsidised freezers, computerised and talking displays. Within a supermarket there are several prime areas which are said to increase sales, for example at the back and front of the store at gondola ends, at the entrance to the store and in front of the checkouts. A study found that goods positioned in front of the checkout enjoyed an increase in sales of 262% upon normal sales.

Impulse purchases in fashion retailers

"Women's outerwear has a rate of unplanned purchase of 46%" (Williams and Dardis, 1972). Many women enter into a retailers to browse, this is therefore when most unplanned purchases occur. Price reductions, special offers and co-ordinated displays are methods of increasing impulse purchasing. Multiple purchases may be encouraged by the positioning of goods at the point of sale. These goods are comparatively cheap (Green, 1986), so that the customer is more willing to purchase it , having already agreed to purchase a higher priced item. In women's wear, retailer's point-of-sale goods are primarily accessories such as bags, belts, hosiery, make-up and hair accessories. In department stores, 62% of costume jewellery purchased is unplanned (Bellenger, 1978)

At the point-of-sale, some stores promote their own magazines and store cards. Most stores sell their gift vouchers at the point-of-sale to create suggestion impulse buys (Stern, 1962) Other aspects of the retailer's business may be promoted at the point-of-sale, such as financial services. The advantage to retailers of using the point-of-sale is that they have a captive market, waiting in a queue to pay.

Conclusion

The world in which retailers operate has changed dramatically in the last few decades. Retailers are now having to struggle to survive in an increasingly competitive environment and in a society in which "Consumers take a more qualitative, more judgmental, more egocentric view" (Fitch, 1988). Consumers expect more from retailers which forces them to create competitive advantages. Retail design has come a long way since its importance as a competitive advantage was first realised in the 1970's. Retailers now monitor the selling environment in order to optimise profitability. Changes made to retail stores cost relatively little, such as the movement of fixtures to improve store layout or the use of displays and point-of-sale material to increase impulse purchases. It is possible that in the future consumers may begin to rebel against the way in which retailers manipulate and control them. However, for the moment, the trend looks set to continue as critical consumers want up-to-date, differentiated stores.

References

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