Store Administration:

Store Design

PowerPoint by Prof. Ganesh E. Antre

Asst. Prof. IBMRD, Vilad Ghat, A’nagar
Prof. Ganesh Antre 1
 Elements That Compose the Store Environment

Visual Store Planning

Communications Space
Retail Identity Allocation
Graphics Layout
POS Signage Circulation
Store Image
And
Productivity

Store Design Merchandising

Exterior Design Fixture Selection
Ambiance Merchandise
Lighting Presentation
Visual Merchandising
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 KEY ROLES IN STORE ENVIRONMENT
THE RESPONSIBILITIES OF THE STORE MANAGER:
 BUDGETING AND PLANNING
• Ensure that the goals are met through appropriate planning and organization of
staff, inventory and expenses, for short and long term success.
• Monitor a loss prevention proagram to protect the company’s inventory and assets.
• Develop and monitor the capital expenses budget to ensure that the store is
properly maintained and upgraded so as to meet the high maintenance standards
that reflects the profitable image .
 COMMUNICATION
• Communication with the regional office/head office as per the requirements laid
down by the organization with reference to sales, target customer service, events
and local issues.
•Hold staff meetings to boost employee morale and drive for achieving the results
needed.
•Ensure the company policy and procedures are communicated in a manner and
adhered to strictly.
•Motivate and develop staff in order to encourage their professional development.

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 KEY ROLES IN STORE ENVIRONMENT
•The Responsibilities of the store manager:
•CUSTOMER SERVICE
• Instill the employees, the meaning and importance of customer service as
outlined in the retail philosophy.
• Promote and monitor the quality of service among the staff through
training and by acting as positive role model.
•Be personally available to all the customers to communicate and indentify
their needs and to address their questions or concerns.
•PERSONAL
•Inspire employees so that each person contributes to the productivity of
the store.
• Delegate the work load appropriately and effective.
•Write performance evaluation and goal assessments for the Assistant Store
Manager.
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 KEY ROLES IN STORE ENVIRONMENT
•The Responsibilities of the store manager:
•LEGAL COMPLIANCE
•Ensure that the store is in compliance with employment laws,
including those regarding wage and hour, human rights and
equal employment opportunities.
•Maintain safe working conditions for the employees and
customers coming in the store, resolve any safety concerns
quickly.
• Ensure store security from internal and external theft and get
to know the proper apprehension and prosecution procedures
for your state.

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 To Plan Visual Merchandising
 To Encourage Customers to Purchase.
 Demonstrate the Purpose of a Product.
 Show Combinations of the Products.
 Advertising, Spark Interest.
 Provide information.
 Act as a directory for the Door ( Point visitors
to specify areas).
 Highlight an area of product.
 Reinforce Brand Image.
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 Factors for Sucessful Display
 Keep it simple & Maintain focus.
 Attract attention by being distinctive/Different.
 Personalize ownership – Show Products in Use.
 Neat, Clean, Safe and Secure.
 Appropriate to Band Image.
 Incorporate a Theme.
 Plan thoughtfully by considering Appropriate
Positioning.
 Use Good Lightening.
 Use of proper colours
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 Merchandise to include in Display
 New & Interesting Products.
 Items wanted/needed by Visitors.
 Items that relate to theme or promotion.
 Advertised lines.
 High Profit lines.
 Sales items (only if having a major clearance.

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 Area to Position Displays
 Window Displays.
 Floor Displays.
 Wall Displays.
 Fixture Displays.
 Showcase Displays.

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 ELEMENTS/ COMPONENTS OF RETAIL
ADMINISTRATION
 Typically in a retail store, the following tasks
need to be performed.
 1. Store administration and management of
the premises
 2. Managing inventory and display
 3. Managing receipts
 4. Customer service
 5. Managing promotions, events, alliances
and partnerships. Prof. Ganesh Antre 10
 1. STORE ADMINISTRATION AND
MANAGEMENT OF PREMISES
 determining the business hours : the target audience for the store and
the kind of products which are to be retailed.
 Security of the store premises and of the merchandise:
 Transaction per hour = number of transaction/ number of hours
 Sales per transaction = net sales / number of transactions
 Hourly customer traffic = customer traffic in / number of hours
 Stock :
 Average selling price = total values of goods sold/ total quantity sold
 Average stock price = total value of goods and stock / total quantity in
stock

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 2. MANAGING INVENTORY AND DISPLAY

2. MANAGING INVENTORY AND DISPLAY

 Proper Documentation
 receiving and in warding the goods
 the products on offer need to be displayed correctly, and
replenished once sold.
 Stock turnover/ inventory turnover rate = net sales /
average retail value of inventory
 Percent inventory carrying cost = (inventory carrying cost /
net sales) * 100
 Gross margin return on inventory = Gross margin / average
value of inventory

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 2. MANAGING INVENTORY AND DISPLAY

2. MANAGING INVENTORY AND DISPLAY

 Space : Space productivity is critical to successful retailing,
hence it is imperative to have parameters that measure
space productivity.
 Occupancy cost per square foot selling space = occupancy
cost/ square feet of selling space
 Sales per square foot = net sales/ square feet of selling
space
 Stock per square foot = net stock/ square feet of selling
space
 Percentage of selling space = (selling space in square feet/
total space in square feet) * 100

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 3. MANAGING RECEIPTS

3. MANAGING RECEIPTS
 Managing receipts involves defining the
manner in which the retailer is going to
receive payment for the sales.
 The most common method for receiving
payments for goods sold in India is by cash
or by credit card

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 4. CUSTOMER SERVICE

4. CUSTOMER SERVICE
 An important aspect which affects a customer’s perception of the
retail store, it’s the experience that he has while billing the
products purchased by him. While a customer may spend hours
choosing the product that he likes, he does not like waiting for a
long time at the time at the time of payment.
 Customer conversion ratio =( number of transactions / customer
traffic) * 100
 This percentage reflects the retailer’s ability to turn a potential
customer into a buyer. It is also known as the ‘percentage yield
rate’ or the ‘walk to buy ratio’.

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 4. CUSTOMER SERVICE

4. CUSTOMER SERVICE
 Employees : Employee productivity is usually measured in
terms of sales. Measurement parameters include total sales
per day per salesperson.
 Net sales per full‐ time employee = net sales/ total full‐time
employees .
 Space covered/ customers served per full‐time employee =
total retailing space/number of customers served/ total
full‐time employees
 Labour productivity = (total labour costs / net sales) * 100

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 Introduction to Store Layout
Management
Store Image is the overall perception the customer has of the store’s
environment.
Space Productivity represents how effectively the retailer utilizes its
space and is usually measured by sales per square foot of selling
space or gross margin dollars per square foot of selling space.
 The more merchandise the customer are exposed to, that is presented
in the orderly manner, the more they tend to buy
 In-store Advertising and displays let the customer know that what is
happening in other shopping areas & thus encourage to visit that area
 Retailers are spending more on in-store design, merchandise
presentation, Visual displays and in-store promotions instead of
advertising
 It is easy to make; that customer buy more who is already in the store
than getting new one Prof. Ganesh Antre 17
 Objectives of the Store
Environment
 Tasks to create desired store image and increase space productivity:
 Do this in the most efficient manner possible.
Shrinkage
Represents merchandise that cannot be accounted for due to theft,
loss, or damage.
Get customers into the store (store image)
– Serves a critical role in the store selection process
– The store itself makes the most significant and last impression
– Important criteria include cleanliness, labeled prices, accurate and
pleasant checkout clerks, and well-stocked shelves
Once they are inside the store, convert them into customers buying
merchandise (space productivity)
– The more merchandise customers are exposed to that is presented
in an orderly and logical manner, the more they tend to buy

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Objectives of the Store Environment

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 Store Environment Focus
Retailers need to focus attention on:
– in-store marketing – marketing dollars spent in the
store, in the form of store design
– merchandise presentation, visual displays

– in-store promotions, should lead to greater sales and

profits
– bottom line - it is easier to get a consumer in your
store to buy more merchandise than planned than to
get a new consumer to come into your store

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 Store Planning
Allocating Space
Circulation
Shrinkage Prevention
Floor Plan is a schematic that shows where
merchandise and customer service
departments are located, how customers
circulate through the store, and how much
space is dedicated to each department.
Stack-Outs are pallets of merchandise set
out on the floor in front of the main shelves.
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Objectives of Good Store Design
Design should:

– be consistent with image and strategy

– positively influence consumer behavior
– consider costs versus value
– be flexible
– recognize the needs of the disabled

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 Store Layout
Factors influencing layout
1) Store’s size and shape
2) Irremovable facilities
3) Product types and categories
4) Business pattern
5) Customer behavior
6) Features and number of the required
installed equipments
7) Retail’s satisfaction
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 Store layout
• Convenience
• Allocation of (shelf) space to products
• Store flow pattern
• Merchandise display
• Flexible, changeable
• Beautiful and attractive

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 Allocating Space
Types of space needed:
Back room
Office and other functional spaces
Aisles, services areas, and other nonselling
areas of the main sales floor
Wall merchandise space
Floor merchandise space

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 Allocating Space
 Warehouse clubs are able to
take advantage not only of the
width and depth of the store,
but also the height, by using
large “warehouse racks” that
carry reachable inventory at
lower levels with large pallets
or cartons of excess inventory
at higher levels.

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Allocating
Space
Starting point for developing
a floorplan is analysing how
the available store space
measured in square footage,
should be allocated for
different departments
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Types of space needed
Five Types: 1) Back Room 2) Office and other personal space
3)Aisles, Service Areas 4) Wall Merchandise Space 5)Floor
Merchandise space
Back Room:
Back Room is required to receive, process and hold inventory
This space varies with the type of retailer (50% in Department store,
10% in Specialty and Convenience store)
SCM practices with JIT has brought down back room space
Warehouse Clubs have only receiving areas but no back room
Cartons of excess inventory is kept at higher levels (84”)
Retailer thus pays same rent for the sq. footage but use heights thus
using cubic footage
This stocking method interestingly creates low-cost image of the store
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Offices and other Functional Spaces
This includes break room, training/meeting room, cabin, bathroom
facilities
This space gets lesser priority
Aisles, Service Areas and other Nonselling areas
Main aisles should be broad and should lead to smaller aisles like
herringbone structure
These aisles should be wide enough upto 15 ft.
Other non-merchandised area are dressing rooms, layaway areas,
service desks
Productivity – Merchandised area or non-merchandised area (Trade
off ?)
Floor Merchandise Space
Here, many different types of fixtures are used to display wide variety
of merchandise
Its just not to cram the largest amount but to place so that consumer
can understand and shop

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Wall Merchandise Space
They serve as fixtures; holding tremendous amount of merchandise
Provide visual backdrop to the floor merchandise
Space Allocation Planning
20% of the inventory is not looked by the customer
This stresses to know the productivity and profitability of all
merchandise
Two reasons for the space planning – 1)Revising the space allocation of
existing store OR planning a new store
One such measure is Space Productivity index

% age of total gross margin dollars for a particular merchandise

=
%age of space required by that merchandise

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If the index is below 1 than category is underperforming
For Apparels the index is highest, for furniture- least (lesson?)
Underperforming categories sometimes have to be continued

Space Allocations for a new Store

In the absence of past data, space allocation is based on industry standards
Robert Kahn to Sam Walton – Store profitability is not the function of
adding more merchandise displays, but
Sales per square foot = f (Number of Customers) x (The length of time
they spend on the store
Wal Mart then built ten 85,000 sq. ft. store and ten 1,15,000 sq. ft. store
Larger stores produced higher sales per square foot
Parking space was always full, showing shoppers were spending more
time
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Comfortable space should be there for the customers to pass through
the aisles

Myth: If customer is sitting down, he is not shopping.

Put at least one bench for the customer to rest

Put a water stand in the corner

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 SPACE PLANNING CONSIDERATIONS
 Product categories
 Amount of products on shelf
 Space allocation on shelf
 Space utilization
 High traffic & highly visible areas
– Entrances, escalators, check-out area, end aisles, feature areas
 Profitability of merchandise
 Private brand, higher margin categories
 Customer buying considerations
 Impulse products near front
 Demand/destination areas in back, off the beaten path
 Physical characteristics of product
 Bulky vs. small/easily stolen
 Complementary products should be adjacent
 Sales rate
 Display more units of fast-selling merchandise (tonnage merchandising
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Store Layout (and Traffic Flow)
 Create sight lines leading to key focus

 Visual Vistas

 Ease of finding merchandise versus varied and

interesting layout

 Giving customers adequate space to shop

versus expensive space productively
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Types of Store Layout / Circulation

Grid Loop
layout Layout
Types of
store layout

Free-form layout

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Free-Flow Layout • Fixtures and
merchandise
grouped into free-
flowing patterns on
the sales floor – no
Storage, Receiving, Marketing defined traffic
pattern

Hats and Handbags

Dressing Rooms
Stockings

Underwear • Works best in

small stores (under
Accessories

Tops
5,000 square feet)
in which customers
wish to browse
Checkout counter
Casual Wear

• Works best when

Tops
Pants

Clearance

Skirts and Dresses

merchandise is of
Items the same type,
such as fashion
apparel
Jeans

Feature Feature
• If there is a great
Open Display Window Open Display Window variety of
merchandise, fails
to provide cues as
to where one
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 Free-Flow Layout is a type of store layout in
which fixtures and merchandise are
grouped into free-flowing patterns on the
sales floor.
 Advantages
 Disadvantages
 Allowance for browsing
 Loitering encouraged
and wandering freely  Possible confusion
 Increased impulse
 Waste of floor space
purchases  Cost
 Visual appeal
 Difficulty of cleaning
 Flexibility

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 Curving Racetrack
Design/Loop Layout

• Major customer aisle(s) begins

at entrance, loops through the
store (usually in shape of
circle, square or rectangle) and
returns customer to front of
store

• Exposes shoppers to the

greatest possible amount of
merchandise by encouraging
browsing and cross-shopping

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Circulation: Loop Layout

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 Loop Layout is a type of store layout in
which a major customer aisle begins at the
entrance, loops through the store, usually in
the shape of a circle, square, ar rectangle,
and then returns the customer the front of
the store.
 Advantages
 Exposes customers to the greatest amount
of merchandise
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 Grid Straight Design
• Best used in retail environments
in which majority of customers
shop the entire store

• Can be confusing and

frustrating because it is difficult
to see over the fixtures to other
merchandise

• Should be employed carefully;

forcing customers to back of
large store may frustrate and
cause them to look elsewhere

• Most familiar examples for

supermarkets and drugstores

Major and minor loops with multiple entrances & multiple sight lines,
draws shopper around the store, encourages exploration, impulse
buying Prof. Ganesh Antre 41
Spine Layout
• Variation of grid, loop and free-form
layouts

• Based on single main aisle running from

the front to the back of the store
(transporting customers in both
directions)

• On either side of spine, merchandise

departments branch off toward the back
or side walls

• Heavily used by medium-sized specialty

stores ranging from 2,000 – 10,000
square feet

• In fashion stores the spine is often

subtly offset by a change in floor coloring
or surface and is not perceived as an 42
Prof. Ganesh Antre
aisle
Circulation: Spine Layout

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 INTERIOR DESIGN ELEMENTS
 1) Fixtures
 Fixtures are used to display merchandise, to help sell it,
to guard it, and to provide a storage space for it.
 They should be attractive and focus customer’s attention
and interest on the merchandise.
 One way to bring the cost of fixtures down is
standardization; customization is expensive, and
construction budgets today allow this luxury only where
specialty departments can justify the cost.
 Some stores are trying to keep a lid on fixture costs with
walls that don’t reach the ceiling
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 2. Displays
 Display an important role in a retail store. An attractive and informative
display can help sell gods. Poorly designed displays can ruin the store’s
atmosphere and centre an uncomfortable setting. Since displays often take
up premium space with in the store, they carry a heavy burden of
productivity in terms of creating sales. There are several principals of rules
of displays that help ensure their effectiveness :
 a)They should achieve balance,
 b) provide a dominant point,
 c) create eye movement
 d)low gradation,
 c) just merchandise to proper height,
 d) group the merchandise in the display,
 e)generate sales appeal ,
 f)keep merchandise in proper order, and
 g) display names of products and store name.
 h) Displays should also be simple and not chaotic or congested.
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 a) Balance

.
In building a display, it is important to make sure that it appears balanced to the viewer.
This is achieved by arranging products in a symmetric manner. Displays may have formal
or informal balance. Formal balance is achieved by placing similar items equal distanc
from the center. Informal balance is achieved by placing different sized goods or
objects away from the center based on their relative size.
 b) Dominance.
 All displays should have a central point that will attract the viewer’s eye. The point may be
achieved by using prominent piece of merchandise, such as a diamond pendant, using
dramatic colours, such as a bright scarf, or using streamers arranged toward the center of
the display.
 c) Eye movement.
 Displays should direct the eyes away from the point of dominance in a systematic fashion,
instead of encouraging them to jump from one end to the other. If
 the viewer’s eyes move indiscriminately around the display, the shopper will miss some of
the merchandise and will not get the full message intended.
 d) Gradation.
 The gradation is the sequence in which items are arranged. For example, small items are
usually placed at the front of the display, medium items father back, and large items at the
rear. The creates harmony and an appealing illusion.

Prof. Ganesh Antre 46

 e) Height of merchandise.
 Merchandise that has the greatest effect should be placed at the eye level of the customer.

.
Because viewers tend to look straight ahead, merchandise placed at eyes level is most likely
to be seen.
 f) Grouping merchandise.
 Too many retailers place one item after another in a long row. Shoe stores, jewellery stores,
and mass merchandisers tend to do this. Stores with large amounts of one item or with one
line of goods are likely to build longer displays. Instead of creating long displays where the
customer has problems picking out merchandise, retailers should group items so that the
customer’s eyes cannot travel from group to group but stop and focus on particular products.
 g) Sales appeal.
 Displays should always show the best merchandise that the retailer has to offer. As discussed
above, displays take up some of the most valuable space in the store. Using show-moving
items for display is a waste. One way to generate sales appeal is to choose the most important
feature of the merchandise being displayed and focus on it. Another way is create a theme
that already exists within the customer’s mind, such as Valentine’s Day, Christmas, or back to
school. Customers relate best when they can grasp the total picture.
 h) Keeping it simple.
 Since displays take up a great deal valuable space, there is a tendency to get as much into
them as possible. While the idea of more is better may be true for chocolate, it is not true for
displays. Too many items in a display district and confuse the consumer, and they tend to
create an atmosphere of chaos or congestion.

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 3) Colour
The psychological effect of colour continues to be important to retailers. Colour is also
important in ware house type stores because of the vast open area of the interior. Bold
colours are frequently used to highlight merchandise sections or departments and to
reduce attention to what is typically an open –girder ceiling.
 Clearly, intelligent use of colour is important in store design. Since people are drawn to
warm colours, yellow and red can help draw customers into the store through the
entrance. Cool colours such as blues and greens tend to calm people and are useful in
areas where customers need time to deliberate over the purchase decision.
 4) Lighting
 Proper lighting is one of the most important considerations in retail design. The function
of lighting was to provide customers with a means of finding their way through the store.
Today, lighting has become a display medium. It is an integral part of the store’s interior
and exterior design. Lighting should match the mood retailer is attempting to create with
the rest of the store décor and should complement, rather than detract from, the
merchandise.
 General illumination is needed throughout the store. However, most stores need
additional localized lighting to highlight special displays and showcases, help bring out
colours, and relieve the monotony of even, overall light. Too much or too little lighting, or
even the wrong type of lighting, can create false impressions about the merchandise on
display retailers must use a lighting combination that gives a correct impression of the
merchandise while deemphasizing the source of the light itself.

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 5) Ceilings
 Ceilings represent a potentially important element interior design. In
older stores, ceilings of twelve to sixteen feet are still common, but
most department store ceilings are now in the nine – to- ten foot range.
Remember, the higher the ceiling, the more space to heat and cool at
increasing energy rates. Ceiling heights are becoming much less
standardized within stores. Designers are making use of varied ceiling
drops to create distinct for different departments within a store.
 6) Flooring
 Retailers are taking a sophisticated “return investment” approach to
flooring decisions. Firms are willing to pay higher-up-front installation
costs for more expensive materials if they see a return in greater
durability and reduced maintenance expenses. Flooring choices are
important because the coverings can be used to separate departments,
muffle noise in high – traffic areas, and strengthen the store image. The
range of choices for floor coverings is endless: Carpeting, wood,
terrazzo, quarry tile, and vinyl composition all have applications in
different settings.

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 7) Shelving
 The material used for shelving as well as its design must be compatible
with the merchandising strategy and the over all image desired.
Stainless steel shelving creates an entirely different effect than the
painted wood cubes in the Country Seat or the typical metal shaving
seen in a general merchandise store, Glass shelving, framed in the
woods, creates an element of elegance difficult to achieve otherwise.
General shelving considerations and merchandise display are
discussed in the next selection.
 8) Plano grams and Shelf Layout Design
 One of the key tools of modern shelf and layout planning is the Plano
gram. This is a graphical representation that visually shows the space
to be allocated by describing where every stock keeping unit(SKU)
within a space is physically located. As you will see in Chapter 10,
every product has its own SKU. The Plano gram produces a
 map for the length, height, and depth of shelves with the number and
location of the SKU.

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 9)Sound & Scent.
Sound
– Music viewed as valuable marketing tool
– Often customized to customer demographics
– Can use volume and tempo for crowd control
Scent
– Smell has a large impact on our emotions
– Can be administered through time release atomizers or via
fragrance-soaked pellets placed on light fixtures
 10) Other considerations.
 There are other considerations that can round out the image and
atmosphere created by the interior design elements. For example, the
type and sound level of music can be focused on a given market
segment. Scents can be used to help identify with a market group or
create a feeling about being in the store. The level of maintenance
and cleanliness also sets a tone.
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 Point-of-Sale (POS) Signage
Point-of-Sale Signage
Is relatively small signage that is placed very
close to the merchandise and is intended to
give details about specific items.

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 Point-of-Sale (POS) Signage
POS signage for
clearance and sale
items tend to be in
red to draw a
consumer’s
attention.

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 Lifestyle Graphics
LO 5
 The Limited uses
lifestyle graphics to
convey the image of
the product to the
consumer. Here the
Limited conveys the
casual nature of one
apparel line.

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