Have you ever asked how supermarkets arrange thousands of items so quickly in a small store? That hundreds of consumers will shop simultaneously without going insane. As a result, retailers must maximize the usage of retail space through proactive space management strategies.
People like to shop in stores where they don't have to search for what they need, so a well-organized and convenient store can generate more purchases.
A well-organized shop saves money, so you don't have to keep the critical salespeople on staff to help customers find the items they want.
The method of efficiently using the inventory available in a supermarket is known as retail space management. Since a manufacturer must view many items in a small amount of room, space management is critical. Understanding the method of space management is not complicated.
In simplistic terms, space management maximises retail space to draw more shoppers and provide them with a pleasant shopping experience. No one can argue that happier customers lead to more purchases.
When you know you've leased a room, you don't want to waste even a single square meter of it. To get the best return on investment, you'd like to fill any open room in the shop.
Before you begin allocating space to items of various types, you can ask yourself the following questions. How much shelf space can each brand be allotted?
Where can items be placed in the store? What are the two groups that should be put next to each other? And so on. The responses to these questions will help you make the most of your store's shelf space.
Importance of Retail Space Management:
1. Retail space management is essential to increase sales
You will boost sales by planning available space in the shop. Understanding the space available in the shop will aid you in deciding on the architecture of the store and the placement of various product categories.
A store needs to allocate the appropriate amount of shelf space to the various product groups.
If you don't organize your storage room and randomly put items, you'll get in trouble. You would still have a problem with a lack of storage space for valuable items. Let's take a look at an overview of a department store with around 30 different product types.
If a supermarket manager does not consider the space available in the shop, it would be impossible for him to position all items and have adequate space for them to sell. He will allocate extra space to one category of product, leaving him with insufficient space to display a few types of products.
There's a risk that the type of merchandise that takes up the most space won't have enough room to view.
According to any shop boss, low-yielding items do not take up any available shelf space in a supermarket. This will have a significant effect on revenue generation.
Furthermore, you may end up spending more money on lower-yielding items, and your hard-earned money would be spent on purchasing and retaining surplus inventory rather than improving your shop to maximize profits.
2. Clients can easily find the products they need
Customers nowadays don't just come to the shop to buy items they need; they even come to de-stress. Consider how they'll react if they can't quickly locate the things they want to purchase.
There's a risk they'd either go to a local shop with more organization, or they'd like to order the items they want online.
Let's look at a scenario to help us understand. Consider a client who comes into the store with a shopping list of cheesecake ingredients.
He will hope to find all of the goods quickly and conveniently. By adequately organizing the store and allocating enough space to each product, and positioning them in the appropriate location on the shelves, the customers would locate them quickly and without frustration.
Poor market room management would result in an increasing number of dissatisfied buyers and a steady decline in revenue. However, proper logical categorization of goods will assist the client in quickly locating the items they want to buy.
3. It helps control the rush in the peak hours
Choosing an efficient retail layout is critical because it will help you keep the store orderly and keep the crowds going at busy hours of the day.
You can hire a designer to help you choose the best style for your shop, or you can replicate the layout design of another store of identical measurements.
Consider how tough it would be to manage the shop if it was always crowded. Proper room management would allow you to choose the most popular product categories and distribute them around the store, avoiding congestion in one area.
What factors should be considered when allocating store space to different products?
There are various sizes of retail outlets. It would be foolish to imitate the layout design of one store with the highest sales in your town without considering the amount of space available in your store and the types of items you want to sell.
Types of Merchandise Which Occupies Retail Space
Depending on the kind of product you choose to sell, you'll need to know when and how to display it. You can hear about four different styles of products sold in a store in this section.
1. Demand Products
Demand goods are ones that the consumers buy daily or that they use regularly. Customers, for example, buy and eat bread, eggs, milk, and other similar goods daily and cannot do without them.
Such items enrich customers' everyday lives. Demand items should be located in the back of your store so that shoppers who are looking for them have to walk around the whole store.
By forcing your buyers to walk around the shop, you will persuade them to purchase one or two more items.
2. Impulse Products
This category's items aren't purchased with forethought. People buy these items either because they look unique or enticing price tags or appealing deals. You must have seen some scented candles by the cash register.
These candles are the epitome of impulsive purchases. Candies, chewing gums, chocolates, and other similar items are often displayed at the cash register. People buy these items on the spur of the moment while shopping.
These items are not on the shoppers' shopping lists, but they purchase them because they are shown there. Impulse items should be located by the cash register or near regularly purchased items (such as demand items).
3. Category Products
For the brands in the segment products, people make many brand comparisons. When people buy laptops or smartphones, they usually do extensive analysis before making a buying decision. People buy depending on how they feel when they see a particular item.
Take, for example, the Apple Corporation. When people purchase an "iPhone," they feel more decadent and have more social standing. To maximize sales in this type of merchandise, your store should stock a few brands that your customers will be interested in purchasing.
Costco, for example, only has one or two brands to choose from. People tend to purchase goods from Costco because they think the shop only offers the highest-quality items.
You can use this tactic for your shop as well, selling only a few high-quality products. Customers will have more faith in the shop if you do it this way.
4. Specialty Products
Now, let's look at this commodity segment in your store's specialty. People specifically come to your shop to purchase these products.
The advantage of these brands is that consumers do not have any brand comparison options to pick from. If the product is a niche item, people can figure that out on their own.
You don't have to put in any additional time to find your way through the market. Specialty items should be shown prominently in the shop.
Maximise Efficiency of Retail Space
1. Life of products on the shelf
Items should be given shelf space depending on how long they would last. A commodity with a limited shelf life, for example, should not be put on the top shelf.
2. Categories of products
This is the most critical consideration when allocating rooms. Benefit builders, traffic builders, celebrity stars, and space wasters are examples of various products.
You don't want to spend so much money on space wasters, so give benefit builders and star performers the most premium space, and traffic builders should be equally spread around the store to prevent congestion.
3. Adjacent Products
The following critical judgment a store manager must make is "the goods should be priced next to one another to maximize revenue."
4. Size, shape, and weight of products
There are critical considerations for a boss when putting items on the shelves. E.g., placing heavy objects on the topmost shelf, such as a bottle of cooking oil, will be inefficient space management.
Due to their large scale, children's diapers and soft toys can be put on the top shelf.
5. Frequency of purchase
Customers often purchase a particular type of items, and they typically arrive in a rush to buy these products. Toilet paper is an example of such a commodity. Toilet paper should be held on the bottom shelf of the entryway so that users can quickly find them without having to go to great lengths to do so.
Different Layout designs for Retail space management
For various kinds of shops, different style designs are used. Let's take a look at them one by one.
1. Free Layout
As the name implies, the free layout does not adhere to a strict pattern or format and is typically used where there is much room and few items to view.
The free layout, for example, is a good choice for luxury and fashion shops. You are not directing the consumers to pursue a specific fashion by using this style.
Instead, you're allowing them to walk around your shop at their leisure. You don't make any demands on them. The free layout is the most effective way to show your imagination. However, make sure to provide adequate signage and window displays anywhere they are required so that the customers do not get disoriented.
The open style allows salespeople and consumers to connect. Salespeople assist consumers with making purchasing decisions while also recommending other items sold in the store to increase sales.
2. Grid Layout
The most popular form of the layout used for retail stores in the grid layout. Products are shown in a grid style in a very predictable fashion. So that people don't have to go to such lengths to find goods. This layout style can be seen in pharmacies, convenience shops, and grocery stores, among other places.
The primary purpose of using a grid system is to display as many product types as possible without leaving any space in the shop.
Shoppers who buy on impulse are placed by the cash register in grid supermarkets, while staple goods like milk and bread are placed at the store's edge to encourage further sales.
This style is appropriate for stores that market more than 30 different product types.
3. Loop Layout
The loop configuration is a closed layout in which the customer enters at one end of the shop and exits by looking at all of the products. This cycle is ideal for shops that only sell particular product lines. A looped style, for example, is perfect for a wine shop.
Loop architecture lets you consider the pattern of traffic in-store, as there are fewer risks that shoppers will crash into each other, so customers will browse at all the wines offered in the store before making a final buying decision.
This layout style may also be dangerous since people who don't have much time won't want to shop at those stores and avoid them.
4. Herringbone Layout
A shop has a long and narrow shopping area, and a Herringbone style should be used instead of a Grid layout. Small hardware stores, libraries, tuck shops, and other businesses commonly use this layout. The chance of burglary is the one significant disadvantage of using a herringbone layout.
Since space is limited, there are opportunities to select and hide objects. However, by adding cameras, this can be prevented.
Steps used to use storage space efficiently
- The first step will be to calculate the overall room available in the shop and the scale and form.
- Make a distinction in the shop between the sale and non-selling areas. The non-selling site will be used for official purposes, customer service, and the cash register, among other things.
- Select a theme for your shop. The scale, form, and number of merchandises sold in the store will all influence the layout.
- Make a diagram that shows which merchandises should go where and which product groups should be next to one another.
- Determine how much inventory can be devoted to merchandises by looking at the product's previous distribution history. Based on the anticipated crowd in the shop, determine how much room can be assigned to the billing area.
- Determine the placement of all items within a specific product group. Customers will be able to find goods more conveniently and efficiently as a result of this.
- Make proper use of your store's irregular corner with diligent preparation. Since this area of the shop can be easily used to showcase big or irregularly shaped items.
- Make space for advertising events like window displays and the like.
Space management is one of the crucial challenges faced by today’s retail managers. A well-organized shopping place increases productivity of inventory, enhances customers’ shopping experience, reduces operating costs, and increases financial performance of the retail store. It also elevates the chances of customer loyalty.
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