Description
It covers merchandise presentation techniques, visual merchandising techniques.
Store Layout, Design and Maintenance
Introduction
• While planning and developing the store environment, retailers should consider the impact of various physical and psychological factors on customer behavior and store functions including employee performance. • The image and the buying environment of a store determine the psychological impact that a store has on its customers. • The physical environment of a store constitute of tangible elements like land, building, equipment and fixtures etc. • The psychological environment of a store is an imaginary atmosphere created by the retailer, that is , an image of the store in the customer’s mind.
Creating a Store Image
• Creating an image in the mind of the customer’s is one of the primary concerns of a retailer. • As store image is one of the most powerful tools for drawing customers towards the store. • Because image is a mental impression formed in the human mind because of various stimuli, creating an image is an extremely difficult task. • The various stimuli consist of the retailer’s physical facilities , its location, the merchandise offered and services provided, the pricing policies and the promotional activities.
• The following factors contribute to the overall store image : 1. Quality of merchandise offered, prices and the merchandise assortment 2. Advertising, external attractiveness, salesmanship and fashionability 3. Convenience of location, products offered, shopping experrience, ease in transaction, strength of the image, and clarity of the message. 4. Cleanliness of the premises, credit facilities, keeping in line with the level of customer sophistication, friendly sales personnel, free space inside and outside the store. 5. Operational efficiency, and physical and technological factors. 6. Design , ambiance and social factors
Creating a Buying Environment
• Of late, an increasing number of consumers are attracted towards a safe , attractive and comfortable shopping environment. • Retailers always try to create store environment that would have positive effect on the buying behavior of the consumers. • A buying atmosphere can be effective only if it can appeal to the five senses of the consumerSight, audibility, smell , touch and taste.
Store Exteriors
• Generally, the first impression of a customer about a store is formed by its exterior. • The exterior of a store plays a vital role in attracting new customers and retaining the existing ones. • The exterior of a store includes its signboard, its entrances, lighting, and the colour of the building. • The exterior of a retail store can convey various types of store images- conservative, trendy, rich, discount and so on- to its target customers. • There are several ways in which a retailer can enhance the store image.Creating Fountains , lawns , benches and plants can enhance the exterior image of a store.
Elements of a Store Exterior
• Marquee- It displays the store name(sign board).It can be a painted one or a neon light or a glow sign board. • Entrances-The retailer should first determine the no. of entrances. Small retailers have generally one entrance while large retailers have more than 2 entrances. • Door Types-Selecting the type of door is another factor worth considering while planning a store’s exterior.There are many types of doors that a retailer can select-regular, revolving, electric, self opening etc. • Walkways-It plays a very important role in building up a store’s exterior image. A wide and rich walkway makes a very unique feature of a store’s image, when compared to narrow and constrained walkway.
• Display Windows-they play a major role in projecting a strong image of the store.They help the customer identify the store and the merchandise offered and motivate the customer to enter the store. • Size of the Building- The height of the building may either be disguised or non-disguised. It is important to select right sized building for various types of merchandise. • A retailer cannot create a fashion boutique in a huge building and a departmental store in a small building. • Colors and Materials-The exterior of the store should appeal to the target customers.It is important for the retailer to understand the psychological impact of color on the customer’s mind ,because it not only helps the retailer sell its merchandise, but also helps in creating a conductive environment to sell. • Theft Prevention-This involves controlling employee and customer pilferage. The retailer while planning the store exterior, should carefully observe the flow of the customers into and out of the store, and find ways to prevent them through electronic theft prevention systems installed at the entrances, exits, inventory receiving doors and at the trash disposal corridors.
Store Interiors
• The principal objective of any retailer is to maximize its sales and customer satisfaction, and to minimize the operational costs. • Therefore the interior of a store should be designed in such a way that it serves this purpose. • The interior of a store determines the merchandise storing patterns and the way in which it is offered for sale. • The interior should be so planned that the customers should have easy access to the merchandise offered. • The interior of a retail store should provide comfort to its customers and should motivate their buying behavior. • Customer’s access to the merchandise can be improved through right layout.
Managing Space
• Retailers can make the most out of the store space and get optimum results from the available space through proper layout management. • There are two major factors that make a store look unique- store layout and the visual merchandising. • Following are the factors that a retailer should consider while taking any decision regarding the store layout : • The value of space and • Space utilization and allocation
• Apart from the mentioned factors, a retailer should also consider • Flow of customer traffic • Types of merchandise offered • Proximity of the complementary merchandise • The desired store image while deciding the store layout. • The retailer should allocate the space to every department in such a way that it optimizes the sales per square foot in the store. • Planning a store layout is not a onetime event for are retailer. Though an overall layout plan is developed while opening a new store or renovating an existing one, checking for the optimization of returns and making the necessary changes is an ongoing process.
Value of Space
• The fact that the store space varies in value is the most significant factor that has to be considered by a retailer while planning a layout. • Retailers generally represent the value of space in terms of sales per square foot of floor space, space per linear foot of shelf space, sales per square foot of exposure space and sales per cubic foot of shelf space. • The fact that the store space varies in value is the most significant factor that has to be considered by a retailer while planning a store layout. • Stores, departments or free standing displays use the sales per square foot measure. • The shelf space for merchandise like grocery and cosmetics is measured in terms of sales per linear foot. • Sales per square foot of exposure space is a new concept. • The value of space for merchandise stocked in freezers and refrigerators is measured in terms of sales per cubic foot.
• It is generally found that particularly some parts of the store are visited by a large number of people. • The merchandise displayed in those areas is most likely to receive customer’s attention and thus the sales of these merchandise categories are likely to be high. • This implies that the value of the space along the high traffic route is also high. • Thus the space near the store entrance is the most valuable; valuation starts decreasing gradually as we move towards the end of the store. • Variations also take place in the sales and profit volumes of merchandise displayed on floors of the store.
Utilizing and Allocating Space
• Analyzing the available store space and allocating it to various departments is the first step in determining the store layout. • This requires a lot of mathematical calculations based on the merchandise categories. • Before starting the process the allocating store space to various departments, the retailers should have a clear understanding of the different types of space required. • A retailer needs 5 types of space in its store- the back room, the office and other functional spaces, the aisles, the service areas and other non selling areas of the sales floor ,wall space and the floor space.
• Back Room – This consists of space for receiving inventories , a store room for processing these and stocking the surplus inventories.The back room is the most essential space required by any retail store to operate. The retailers continuous efforts to maximize the sales per square foot of the store space, the use of the latest distribution techniques like just-in-time inventory management, quick response delivery system and efficient consumer response lead to a significant decrease in the space allocated to the backroom. • Office and other functional spaces – These usually consist of a rest room for the sales personnel, a training room, cabins for the store managers and assistant managers, a cash office, washrooms for the shoppers and the staff and other functional space.
• Aisles, service areas and other non selling areas – These include spaces that are allocated for customers to move around. Retail stores usually have two types of aisles- the primary aisle through which customers can go around the store and secondary aisles through which customers can reach a particular merchandise category on display. • Other non selling areas include service facilities like space for stacking shopping trolleys and baskets, trial rooms and service desks. • Floor Space – This is also referred to as floor merchandise space. It consists of various kinds of fixtures that are used to display the merchandise. • Wall Space – This is one of the most important part of a retail store, as it acts as a fixture for carrying significant amount of merchandise.In addition to this wall acts as an excellent visual backdrop for the merchandise displayed on the shop floor.
• There are different methods that retailers use to allocate space to various departments. • The following are commonly used methods: • Allocation based on historical sales • Allocation based on gross margin • Allocations based on industry averages • Allocations based on strategic objectives
Store Layout- Merchandise Presentation Techniques
• Determining the store prototype is the first step in determining a store layout . Store prototype is a model prepared by integrating various elements of a store. • These elements include decor, lighting, music, fragrance, colours , fixtures and so on. • While deciding the store layout, retailers should strike a trade off between many conflicting objectives. • Firstly, the store layout should enable and incite the customers to move around the store to purchase more products than they actually planned for. • The layout should tempt customers to walk along the inexpensive merchandise display sections for impulse buying and then move on to expensive merchandise. • There is another way of making customers navigate the store –by adding variety to the display style and by offering a wide variety of products. • Retailer should create small secluded places in the store instead of huge straight spaces.Inorder to do this modern retailers adopt any of the three design types -
• Grid Layout- A grid layout is generally found in grocery stores.It consists of numerous long gondolas and aisles. This marks the most cost effective and efficient utilization of retail space. • Race Track Layout- A race track layout which has a major aisle running inside the store.The customer can access various department in the store through the aisles. The flooring and colours of these aisles is typically different from those of the individual departments. • Free - form Layout – A free form layout ,also referred to as ‘boutique layout’ has the aisles and fixtures arranged in an asymmetrical fashion. This layout is most effective in small speciality stores or in the individual departments of large stores. • This creates on the customer’s mind an impression that a wide range of merchandise is being offered. In this layout no attempt is made to create a break within a department. • For eg.men’s formal wear, sports wear and casual wear are all displayed in one section of the store.
Optimizing Factors
• Increasing Sales • Maximizing returns per square foot • Coordinating the merchandise with the store format • Allowing flexibility in store design • Recognizing the need of the disabled / women/kids and the safety of the customers.
Visual Merchandising
• Visual Merchandising can be regarded as a retail function that helps the retailer create a visually appealing or pleasing shopping environment, which will in turn increase sales. • This is also referred to as point of purchase display. • The point of purchase display has three main roles to play- informing the customers about the products, adding value to the atmosphere of the store, and acting as a significant promotional tool. • There are various techniques that a retailer should consider while developing visual merchandising for its store.
Visual Merchandising Techniques
• Idea-oriented presentation- This involves presenting the merchandise depending on a specific idea or the store’s image. This motivates the customers to purchase complementary products too. • Style or item oriented presentation – This is the most commonly used presentation technique.Retailer who generally adopt this technique include discount stores, grocery stores, hardware stores and pharma stores.Customers looking for a specific product on a merchandise category would like to find all the products in that category at one place.Organizing merchandise on the basis of size is the most common style- based presentation. • Color presentation – This involves presenting the merchandise using appropriate color combinations. Apparel retailers generally use colors for their interior that are appropriate for the season. • Price Lining- In this case the merchandise is arranged according to the various price points. This type of presentation technique helps customers find the merchandise in the price range that they are looking for.
• Vertical merchandising – It involves displaying the merchandise on the walls and on high gondolas.While purchasing in the store using vertical merchandising technique, customers follow a set buying pattern, that is from left to right through each column and from top to bottom of each SKU. • Tonnage merchandising- In this technique a huge quantity of merchandise is displayed at a time. Customers usually regard this type of presentation as something that has value and is offered at a lower price. • Frontal Presentation – Typically it is not possible for the retailer to create effective display areas and diplay all the merchandise. Frontal presentation is an answer to this problem. It helps the retailer exhibit as much as portion of a product , as would be required to draw the customer’s attention.
Fixture
• The basic purpose of a fixture is to carry and display merchandise effectively. • In addition to this, fixture should help in defining various department and increasing the flow of customers. • Though there is a wide variety of styles , colors , materials and sizes of fixtures, only a few types are used by a majority of retailers. • Gondolas are the most popularly used fixtures, especially in the grocery stores and supermarkets. • Other retailers like apparel stores use fixtures like straight racks , rounder's and four-way fixtures.
Atmospherics
• Atmospherics can be described as an environment that stimulates the perceptual and emotional responses of the customers through • Visual Communication • Lighting • Colors • Music • Fragrance
Visual Communication
• Visual communication involve communicating with customers through graphics, signs and certain theatrical effects inside the store through the windows. • Visual communication help in increasing the sales by providing information to customers about merchandise offered, best buys and so on. • It also helps the customers in locating the departments or sections they are looking for in the store.
Lighting
• Lighting can be used intelligently to highlight the merchandise and attract customers to specific departments in the store. • Excellent lighting highlights the products displayed , moulds the space,captures the customers mood and enhances the store image. • It also masks the less attractive areas of the store that cannot be modified otherwise.
Colours
• These are the most important and most strategic visual promotional tools that help build a retailers image by creating a positive effect on the customers psychology. • As different color conveys different moods and meanings, retailers should ensure that the colors they must use must complement the message conveyed by the merchandise being sold and the store itself. • Cool and bright colors like blue and green are suitable for retailers offering expensive products.
Music
• Music can be used effectively to influence the buying behavior of many customers. • Unlike the other elements ,colour and lighting, music can be changed as and when needed
Fragrance
• Most of the purchasing decisions of the consumers are emotional and of all the different human senses, smell has the most significant impact on human emotions.
Store Security
• Retailer should protect their stores from many types of merchandise losses, especially those caused by customers, employees, burglars and robbers. • While developing security systems for their stores, retailers should bear in their mind customers and employees, in addition to the store image and the merchandise offered. • Retailers usually spend up to five percent of their total retail expenditure on covering merchandise losses or on establishing security systems to prevent such losses.
Customer Theft
• This means theft of the merchandise on display in a store , committed by entrants in to the store. This is also referred to as shoplifting. • Shoplifting is done in 3 basic ways: 1. Direct theft of product on display 2. Tampering with the retailer’s price tag to show a lower price 3. Replacing the original price tag with a lower priced tag. • The security system of the retailer should have effective techniques for detection and prevention of shoplifting. • The most common detection technique is observation. • The use of electronic gadgets like closed circuit cameras, electronic bar codes, smart tags and so on, is very effective in detection of shoplifting.
Employee Theft
• Pilferage done by employees has been a major reason for inventory losses for major retailers. • The first step in the process of detecting and preventing such pilferage is to identify the existence of the problem, and then understand the reason for it and subsequently understand the mechanism of the act. • Opportunity and need are the most prominent factors that cause employee theft.
Supplier Pilferage
• The pilferage activities of the vendor representative are of 2 types – short counts and merchandise removal. • The following are some procedure through which the retailer can reduce and eliminate pilferage by the supplier’s representatives : • Establish a separate receiving point in the rear of the store for accepting all the incoming inventory. • Monitoring all the deliveries that are made directly to the sales floor and the store room • Minimize the number of entrances to the receiving point and lock them properly. • Thoroughly monitor and control the entry and exit into the receiving point.
• Randomly inspect the delivery staff and their equipment within the stores premises. • Check all the incoming shipments • Properly document all the incoming shipments in all respect- their contents, weight,size and condition of receipt.
Credit Management
• Selling merchandise on credit has become necessary for retailers because of the increase in number of customers using credit cards across the world. • However the retailer’s should be very cautious while handling credit or credit cards, as many of these can be stolen or fictitious card. • Some precautionary measures are: • Tallying the signature of the card holder on the credit slip with that on the credit card. • Checking the authenticity of the individual carrying the card. • Seeking approval from the finance provider if the sale is above a certain amount.
Cost Control
Overview
• Technological development and globalization have played a major role in changing the retail strategies of an organization. • Globalization and technological progress increased competition among retail organizations. • To survive and retain customers in this competitive environment, the retailer has to reduce the prices either by reducing his profit margin or by reducing the operating cost. • In a retail organization the major operating costs emerge from labor, store maintenance and energy management.
Labor Scheduling
• Labor cost constitutes a major part of the operating expenses of a retail organization. • The success of retailers also depends on how effectively they use their services to generate sales. • Labor scheduling is the process of determining the optimal number of employees to be assigned to each area of the store at a particular time in order to serve the customers effectively.
Store Maintenance
• It includes the activities of managing the exterior and interior physical facilities associated with the stores. • The exterior physical facilities include the parking place , entrance of the store and signs outside the stores. • A well maintained store attracts more traffic and generates more revenue.
Energy Maintenance
• Energy is a major operating expense for a retail organization. • Energy management is crucial for food retail stores,which use high power consuming storage equipments.
doc_857052579.pptx
It covers merchandise presentation techniques, visual merchandising techniques.
Store Layout, Design and Maintenance
Introduction
• While planning and developing the store environment, retailers should consider the impact of various physical and psychological factors on customer behavior and store functions including employee performance. • The image and the buying environment of a store determine the psychological impact that a store has on its customers. • The physical environment of a store constitute of tangible elements like land, building, equipment and fixtures etc. • The psychological environment of a store is an imaginary atmosphere created by the retailer, that is , an image of the store in the customer’s mind.
Creating a Store Image
• Creating an image in the mind of the customer’s is one of the primary concerns of a retailer. • As store image is one of the most powerful tools for drawing customers towards the store. • Because image is a mental impression formed in the human mind because of various stimuli, creating an image is an extremely difficult task. • The various stimuli consist of the retailer’s physical facilities , its location, the merchandise offered and services provided, the pricing policies and the promotional activities.
• The following factors contribute to the overall store image : 1. Quality of merchandise offered, prices and the merchandise assortment 2. Advertising, external attractiveness, salesmanship and fashionability 3. Convenience of location, products offered, shopping experrience, ease in transaction, strength of the image, and clarity of the message. 4. Cleanliness of the premises, credit facilities, keeping in line with the level of customer sophistication, friendly sales personnel, free space inside and outside the store. 5. Operational efficiency, and physical and technological factors. 6. Design , ambiance and social factors
Creating a Buying Environment
• Of late, an increasing number of consumers are attracted towards a safe , attractive and comfortable shopping environment. • Retailers always try to create store environment that would have positive effect on the buying behavior of the consumers. • A buying atmosphere can be effective only if it can appeal to the five senses of the consumerSight, audibility, smell , touch and taste.
Store Exteriors
• Generally, the first impression of a customer about a store is formed by its exterior. • The exterior of a store plays a vital role in attracting new customers and retaining the existing ones. • The exterior of a store includes its signboard, its entrances, lighting, and the colour of the building. • The exterior of a retail store can convey various types of store images- conservative, trendy, rich, discount and so on- to its target customers. • There are several ways in which a retailer can enhance the store image.Creating Fountains , lawns , benches and plants can enhance the exterior image of a store.
Elements of a Store Exterior
• Marquee- It displays the store name(sign board).It can be a painted one or a neon light or a glow sign board. • Entrances-The retailer should first determine the no. of entrances. Small retailers have generally one entrance while large retailers have more than 2 entrances. • Door Types-Selecting the type of door is another factor worth considering while planning a store’s exterior.There are many types of doors that a retailer can select-regular, revolving, electric, self opening etc. • Walkways-It plays a very important role in building up a store’s exterior image. A wide and rich walkway makes a very unique feature of a store’s image, when compared to narrow and constrained walkway.
• Display Windows-they play a major role in projecting a strong image of the store.They help the customer identify the store and the merchandise offered and motivate the customer to enter the store. • Size of the Building- The height of the building may either be disguised or non-disguised. It is important to select right sized building for various types of merchandise. • A retailer cannot create a fashion boutique in a huge building and a departmental store in a small building. • Colors and Materials-The exterior of the store should appeal to the target customers.It is important for the retailer to understand the psychological impact of color on the customer’s mind ,because it not only helps the retailer sell its merchandise, but also helps in creating a conductive environment to sell. • Theft Prevention-This involves controlling employee and customer pilferage. The retailer while planning the store exterior, should carefully observe the flow of the customers into and out of the store, and find ways to prevent them through electronic theft prevention systems installed at the entrances, exits, inventory receiving doors and at the trash disposal corridors.
Store Interiors
• The principal objective of any retailer is to maximize its sales and customer satisfaction, and to minimize the operational costs. • Therefore the interior of a store should be designed in such a way that it serves this purpose. • The interior of a store determines the merchandise storing patterns and the way in which it is offered for sale. • The interior should be so planned that the customers should have easy access to the merchandise offered. • The interior of a retail store should provide comfort to its customers and should motivate their buying behavior. • Customer’s access to the merchandise can be improved through right layout.
Managing Space
• Retailers can make the most out of the store space and get optimum results from the available space through proper layout management. • There are two major factors that make a store look unique- store layout and the visual merchandising. • Following are the factors that a retailer should consider while taking any decision regarding the store layout : • The value of space and • Space utilization and allocation
• Apart from the mentioned factors, a retailer should also consider • Flow of customer traffic • Types of merchandise offered • Proximity of the complementary merchandise • The desired store image while deciding the store layout. • The retailer should allocate the space to every department in such a way that it optimizes the sales per square foot in the store. • Planning a store layout is not a onetime event for are retailer. Though an overall layout plan is developed while opening a new store or renovating an existing one, checking for the optimization of returns and making the necessary changes is an ongoing process.
Value of Space
• The fact that the store space varies in value is the most significant factor that has to be considered by a retailer while planning a layout. • Retailers generally represent the value of space in terms of sales per square foot of floor space, space per linear foot of shelf space, sales per square foot of exposure space and sales per cubic foot of shelf space. • The fact that the store space varies in value is the most significant factor that has to be considered by a retailer while planning a store layout. • Stores, departments or free standing displays use the sales per square foot measure. • The shelf space for merchandise like grocery and cosmetics is measured in terms of sales per linear foot. • Sales per square foot of exposure space is a new concept. • The value of space for merchandise stocked in freezers and refrigerators is measured in terms of sales per cubic foot.
• It is generally found that particularly some parts of the store are visited by a large number of people. • The merchandise displayed in those areas is most likely to receive customer’s attention and thus the sales of these merchandise categories are likely to be high. • This implies that the value of the space along the high traffic route is also high. • Thus the space near the store entrance is the most valuable; valuation starts decreasing gradually as we move towards the end of the store. • Variations also take place in the sales and profit volumes of merchandise displayed on floors of the store.
Utilizing and Allocating Space
• Analyzing the available store space and allocating it to various departments is the first step in determining the store layout. • This requires a lot of mathematical calculations based on the merchandise categories. • Before starting the process the allocating store space to various departments, the retailers should have a clear understanding of the different types of space required. • A retailer needs 5 types of space in its store- the back room, the office and other functional spaces, the aisles, the service areas and other non selling areas of the sales floor ,wall space and the floor space.
• Back Room – This consists of space for receiving inventories , a store room for processing these and stocking the surplus inventories.The back room is the most essential space required by any retail store to operate. The retailers continuous efforts to maximize the sales per square foot of the store space, the use of the latest distribution techniques like just-in-time inventory management, quick response delivery system and efficient consumer response lead to a significant decrease in the space allocated to the backroom. • Office and other functional spaces – These usually consist of a rest room for the sales personnel, a training room, cabins for the store managers and assistant managers, a cash office, washrooms for the shoppers and the staff and other functional space.
• Aisles, service areas and other non selling areas – These include spaces that are allocated for customers to move around. Retail stores usually have two types of aisles- the primary aisle through which customers can go around the store and secondary aisles through which customers can reach a particular merchandise category on display. • Other non selling areas include service facilities like space for stacking shopping trolleys and baskets, trial rooms and service desks. • Floor Space – This is also referred to as floor merchandise space. It consists of various kinds of fixtures that are used to display the merchandise. • Wall Space – This is one of the most important part of a retail store, as it acts as a fixture for carrying significant amount of merchandise.In addition to this wall acts as an excellent visual backdrop for the merchandise displayed on the shop floor.
• There are different methods that retailers use to allocate space to various departments. • The following are commonly used methods: • Allocation based on historical sales • Allocation based on gross margin • Allocations based on industry averages • Allocations based on strategic objectives
Store Layout- Merchandise Presentation Techniques
• Determining the store prototype is the first step in determining a store layout . Store prototype is a model prepared by integrating various elements of a store. • These elements include decor, lighting, music, fragrance, colours , fixtures and so on. • While deciding the store layout, retailers should strike a trade off between many conflicting objectives. • Firstly, the store layout should enable and incite the customers to move around the store to purchase more products than they actually planned for. • The layout should tempt customers to walk along the inexpensive merchandise display sections for impulse buying and then move on to expensive merchandise. • There is another way of making customers navigate the store –by adding variety to the display style and by offering a wide variety of products. • Retailer should create small secluded places in the store instead of huge straight spaces.Inorder to do this modern retailers adopt any of the three design types -
• Grid Layout- A grid layout is generally found in grocery stores.It consists of numerous long gondolas and aisles. This marks the most cost effective and efficient utilization of retail space. • Race Track Layout- A race track layout which has a major aisle running inside the store.The customer can access various department in the store through the aisles. The flooring and colours of these aisles is typically different from those of the individual departments. • Free - form Layout – A free form layout ,also referred to as ‘boutique layout’ has the aisles and fixtures arranged in an asymmetrical fashion. This layout is most effective in small speciality stores or in the individual departments of large stores. • This creates on the customer’s mind an impression that a wide range of merchandise is being offered. In this layout no attempt is made to create a break within a department. • For eg.men’s formal wear, sports wear and casual wear are all displayed in one section of the store.
Optimizing Factors
• Increasing Sales • Maximizing returns per square foot • Coordinating the merchandise with the store format • Allowing flexibility in store design • Recognizing the need of the disabled / women/kids and the safety of the customers.
Visual Merchandising
• Visual Merchandising can be regarded as a retail function that helps the retailer create a visually appealing or pleasing shopping environment, which will in turn increase sales. • This is also referred to as point of purchase display. • The point of purchase display has three main roles to play- informing the customers about the products, adding value to the atmosphere of the store, and acting as a significant promotional tool. • There are various techniques that a retailer should consider while developing visual merchandising for its store.
Visual Merchandising Techniques
• Idea-oriented presentation- This involves presenting the merchandise depending on a specific idea or the store’s image. This motivates the customers to purchase complementary products too. • Style or item oriented presentation – This is the most commonly used presentation technique.Retailer who generally adopt this technique include discount stores, grocery stores, hardware stores and pharma stores.Customers looking for a specific product on a merchandise category would like to find all the products in that category at one place.Organizing merchandise on the basis of size is the most common style- based presentation. • Color presentation – This involves presenting the merchandise using appropriate color combinations. Apparel retailers generally use colors for their interior that are appropriate for the season. • Price Lining- In this case the merchandise is arranged according to the various price points. This type of presentation technique helps customers find the merchandise in the price range that they are looking for.
• Vertical merchandising – It involves displaying the merchandise on the walls and on high gondolas.While purchasing in the store using vertical merchandising technique, customers follow a set buying pattern, that is from left to right through each column and from top to bottom of each SKU. • Tonnage merchandising- In this technique a huge quantity of merchandise is displayed at a time. Customers usually regard this type of presentation as something that has value and is offered at a lower price. • Frontal Presentation – Typically it is not possible for the retailer to create effective display areas and diplay all the merchandise. Frontal presentation is an answer to this problem. It helps the retailer exhibit as much as portion of a product , as would be required to draw the customer’s attention.
Fixture
• The basic purpose of a fixture is to carry and display merchandise effectively. • In addition to this, fixture should help in defining various department and increasing the flow of customers. • Though there is a wide variety of styles , colors , materials and sizes of fixtures, only a few types are used by a majority of retailers. • Gondolas are the most popularly used fixtures, especially in the grocery stores and supermarkets. • Other retailers like apparel stores use fixtures like straight racks , rounder's and four-way fixtures.
Atmospherics
• Atmospherics can be described as an environment that stimulates the perceptual and emotional responses of the customers through • Visual Communication • Lighting • Colors • Music • Fragrance
Visual Communication
• Visual communication involve communicating with customers through graphics, signs and certain theatrical effects inside the store through the windows. • Visual communication help in increasing the sales by providing information to customers about merchandise offered, best buys and so on. • It also helps the customers in locating the departments or sections they are looking for in the store.
Lighting
• Lighting can be used intelligently to highlight the merchandise and attract customers to specific departments in the store. • Excellent lighting highlights the products displayed , moulds the space,captures the customers mood and enhances the store image. • It also masks the less attractive areas of the store that cannot be modified otherwise.
Colours
• These are the most important and most strategic visual promotional tools that help build a retailers image by creating a positive effect on the customers psychology. • As different color conveys different moods and meanings, retailers should ensure that the colors they must use must complement the message conveyed by the merchandise being sold and the store itself. • Cool and bright colors like blue and green are suitable for retailers offering expensive products.
Music
• Music can be used effectively to influence the buying behavior of many customers. • Unlike the other elements ,colour and lighting, music can be changed as and when needed
Fragrance
• Most of the purchasing decisions of the consumers are emotional and of all the different human senses, smell has the most significant impact on human emotions.
Store Security
• Retailer should protect their stores from many types of merchandise losses, especially those caused by customers, employees, burglars and robbers. • While developing security systems for their stores, retailers should bear in their mind customers and employees, in addition to the store image and the merchandise offered. • Retailers usually spend up to five percent of their total retail expenditure on covering merchandise losses or on establishing security systems to prevent such losses.
Customer Theft
• This means theft of the merchandise on display in a store , committed by entrants in to the store. This is also referred to as shoplifting. • Shoplifting is done in 3 basic ways: 1. Direct theft of product on display 2. Tampering with the retailer’s price tag to show a lower price 3. Replacing the original price tag with a lower priced tag. • The security system of the retailer should have effective techniques for detection and prevention of shoplifting. • The most common detection technique is observation. • The use of electronic gadgets like closed circuit cameras, electronic bar codes, smart tags and so on, is very effective in detection of shoplifting.
Employee Theft
• Pilferage done by employees has been a major reason for inventory losses for major retailers. • The first step in the process of detecting and preventing such pilferage is to identify the existence of the problem, and then understand the reason for it and subsequently understand the mechanism of the act. • Opportunity and need are the most prominent factors that cause employee theft.
Supplier Pilferage
• The pilferage activities of the vendor representative are of 2 types – short counts and merchandise removal. • The following are some procedure through which the retailer can reduce and eliminate pilferage by the supplier’s representatives : • Establish a separate receiving point in the rear of the store for accepting all the incoming inventory. • Monitoring all the deliveries that are made directly to the sales floor and the store room • Minimize the number of entrances to the receiving point and lock them properly. • Thoroughly monitor and control the entry and exit into the receiving point.
• Randomly inspect the delivery staff and their equipment within the stores premises. • Check all the incoming shipments • Properly document all the incoming shipments in all respect- their contents, weight,size and condition of receipt.
Credit Management
• Selling merchandise on credit has become necessary for retailers because of the increase in number of customers using credit cards across the world. • However the retailer’s should be very cautious while handling credit or credit cards, as many of these can be stolen or fictitious card. • Some precautionary measures are: • Tallying the signature of the card holder on the credit slip with that on the credit card. • Checking the authenticity of the individual carrying the card. • Seeking approval from the finance provider if the sale is above a certain amount.
Cost Control
Overview
• Technological development and globalization have played a major role in changing the retail strategies of an organization. • Globalization and technological progress increased competition among retail organizations. • To survive and retain customers in this competitive environment, the retailer has to reduce the prices either by reducing his profit margin or by reducing the operating cost. • In a retail organization the major operating costs emerge from labor, store maintenance and energy management.
Labor Scheduling
• Labor cost constitutes a major part of the operating expenses of a retail organization. • The success of retailers also depends on how effectively they use their services to generate sales. • Labor scheduling is the process of determining the optimal number of employees to be assigned to each area of the store at a particular time in order to serve the customers effectively.
Store Maintenance
• It includes the activities of managing the exterior and interior physical facilities associated with the stores. • The exterior physical facilities include the parking place , entrance of the store and signs outside the stores. • A well maintained store attracts more traffic and generates more revenue.
Energy Maintenance
• Energy is a major operating expense for a retail organization. • Energy management is crucial for food retail stores,which use high power consuming storage equipments.
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