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).

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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.

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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

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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

Cheap. Easy Not flexible
Clear route and Food and DIY
Grid maintenance &
aisles. stores.
movement Cheap image.
Shopper
freedom Expensive. Clothing and
Random fixture
Free Flow Flexibility. department
positioning.
Poor use of space stores
Image creation
Very expensive Speciality
Small version of Aesthetically
Boutique Very poor use of stores.
free flow Appealing.
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

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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

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"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

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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):

occurs when a consumer is in a store, sees a

Reminder impulse buying
Pure impulse buying
Suggestion impulse buying
Planned impulse buying
product and this reminds them of a previous
experience or recall, such as a friends
recommendation or a television advert
would occur where there has been no preplanning
involved in the purchase.
takes place when a shopper is introduced to a
product that they have no previous experience
of, by some form of in-store promotion.
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)

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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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product' Journal of Advertising Research. 18, 6, Dec.

Bohdanowicz, J and Clamp, L (1994) 'Fashion Marketing'. Routledge.

Buttle, F (1984) 'Merchandising' European Journal of Marketing. 18, 6/7.

Dyer (1980) 'In store research at Publix' Progressive Grocer. 59, 10 (Nov).

Fitch, R and Knobel, L (1990) 'Fitch on Retail Design'. Phaidon Press Ltd.

Gagnon, J. P and Osterhaus, J. T (1985) 'Effectiveness of floor displays on the sale

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McGoldrick, P. J. (1990) 'Retail Marketing'. McGraw-Hill, London.

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