RETAIL LAYOUT MANAGEMENT

TESCO HYPERMARKET

Store layout and visual merchandising are factors that contribute to the uniqueness of a store.

The exterior and interior of a store convey several messages about the store to the consumers.

The building that houses retail store and the exterior design of the store are important aspects

of the design of the store. Marquees, walkways, entrances, doors, display windows, the height

and size of the building, colors and materials used, and theft prevention are some of the key

factors to be kept in mind while developing a store. There are three kinds of layouts - grid

layout, race track layout and freeform layout.

Allocating space to various merchandise categories in a store is very important.

Allocation of space can be based on many factors, like historical sales, gross margins,

industry averages and strategic objectives. Apart from allocating space to various

merchandise categories, space has to be allocated for carrying out some essential functions.

Such space includes the back room for receiving the inventories and sorting them out, office

and other functional spaces, aisles and customer service desks, floor space and wall space.

The interior of a store influences the purchasing behavior of the customers to a great extent.

Designing the interior of a store in such a way as to influence customer behavior is referred to

as visual merchandising. It includes optimum and appropriate use of fixtures, displays, color,

lighting, music, scent, ceilings and floor, and designing all of these properly. Merchandise

presentation is the most significant aspect of store design, because it helps attract customers'

attention. A retailer can resort to many forms of presentation such as idea-oriented

presentation, item-oriented presentation, price lining, color presentation, vertical

merchandising, tonnage merchandising and frontal presentation.

Prevention of losses due to merchandise pilferage is a major cause of concern for all

retailers. This issue should be addressed at the initial stage of store design. The retailer can

use many electronic security systems like CCTV for the prevention of such losses. Thus, by

appropriately integrating the various elements of store design, a retailer can create an

excellent image of itself in the target customer's mind.

In manufacturing, facility layout consists of configuring the plant site with lines,

buildings, major facilities, work areas, aisles, and other pertinent features such as department

boundaries. An efficient layout can reduce unnecessary material handling, help to keep costs

low, and maintain product flow through the facility.

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Managing space is the first and foremost concern of almost every retailer, when it comes to

designing the store's interior. Space is always an expensive and scarce resource. Retailers

always try to maximize the return on sales per square foot. Planning a layout for the store's

interior is the first step in designing the store's interior.

Walking Space

A good retail store layout allows for sufficient walking space for customers. The aisles must

be wide enough to accommodate traffic flowing in both directions. If the store provides

shopping carts, then there must also be space for customers to stop near a product display and

park a cart without disrupting the flow of traffic. The ability of customers to easily navigate

your aisles is important in retail layout design.

Flow

The layout of your retail store should allow customers to enter from the front and be

encouraged to walk to the back of the store. This increases the amount of time that the

customers spend in the store and boosts the chances that they will buy more product. Spread

the better-selling items out among the shelves to encourage customers to browse the entire

store to find what they want. The layout of aisles should be a horseshoe design that brings

customers through the front door with impulse products and some high-demand items, works

customers to the back of the store with higher-priced items and then allows them to exit

through aisles of more impulse items at the cash register locations.

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Eye Level

Putting products at the proper eye level will help to improve sales. But it is important to

remember whose eye level you are trying to reach. If you are trying to sell a tennis racket to

adults, then put the tennis racket at adult eye level. A toy you are trying to sell to children

needs to be at a child's eye level.

Display Cases

Display cases serve several important functions in the layout of a retail store. Expensive

product can be put in a lighted display case to draw attention to it. The display case also acts

as a countertop customer interaction area for convenience. For example, if someone sees a

watch he likes in a lighted display case, then the sales associate can quickly pull the watch out

to show the customer. Another function of display cases is that they can be placed near the

cash register area and act as another impulse buy area for customers. You can increase the

effectiveness of a display case at the cash-out area by putting a sales associate there to engage

customers and answer questions.

Objectives of the Store Environment

Get customers into the store

Serves a critical role in the store selection process

Important criteria include cleanliness, labeled prices, accurate and pleasant checkout

clerks, and well-stocked shelves

The store itself makes the most significant and last impression

Once they are inside the store, convert them into customers buying merchandise. The more

merchandise customers are exposed to that is presented in an orderly manner, the more they

tend to buy. Retailers focusing more attention on in-store marketing by emphasize in the

store, in the form of store design, merchandise presentation, visual displays, and in-store

promotions, should lead to greater sales and profits. Bottom line – it is easier to get a

consumer in the store to buy more merchandise than planned to get a new consumer to come

into the store).

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Store design and layout tells a customer what the store is all about and it is very

strong tool in the hands of the retailer for communicating and creating the image of the

store in the mind of the customers. The overall look of a store and the series of mental

pictures and feelings it evokes within the beholder. For the retailer, developing a powerful

image provides the opportunity to embody a single message, stand out from the competition

and be remembered.

A successful store layout is not by accident. Before a sales space is designed, the

designer has to have accumulated extensive knowledge of whom his design is ultimately

targeted to appeal to. This is an elemental step that many designers fail to consider. The store

should look good through the eyes of a customer profile that you have predetermined offers

your store the best chance for success.

Exposing shoppers to more products is the goal of good grocery store layout.

Successful grocery store layouts influence traffic flow, and guide shoppers through the entire

sales space. The layouts should encourage customers to discover new products and specialty

items. Retail layout affects customers’ shop time, incremental sales and ultimately,

profitability. If your target customers are bargain shoppers concerned only with price, then a

straightforward traditional grocery store layout might adequately address the needs. Retail

Example of Retail Layout in Typical Hypermarket

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store operators who target the price sensitive customers often run parallel aisles that demand a

more self-reliant shopping experience in order to lower payroll which may in turn helps foster

lower prices.

Store managers who target this group of customers invest more resources in inventory

management and less in customer service. Even then, creating a layout featuring leading

visuals of related products can help guide customers through the store and increase their

shopping time. Free flowing areas allow more customer interaction, which along with the

sales assistance, often appeals to upmarket customers. The upscale grocery store layout may

include more entertainment and design elements which are also intended to lengthen the time

customers spend in the store. These elements contribute to a pleasant shopping experience

which will produce more sales.

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RETAIL LAYOUT STRATEGY AT TESCO HYPERMARKET

INTRODUCTION

Tesco was founded in 1919 by Jack Cohen from a

market stall in London’s East End. Over the years the

business has grown and now operating in 12 countries around the world, employ over 530,000

people and serve tens of millions of customers every week.

Their physical presence in Malaysia comes through a network of 49 hypermarkets,

which are serviced by two state of the art distribution centres in Selangor. Since the launch of

the business in 2002, Tesco opened many stores across Peninsular Malaysia. In total, Tesco

stores in Malaysia have a combined floor space of over 4 million square feet. With the

influence of the internet increasing, two thirds of Malaysians have access to the internet.

Following the launch of grocery home shopping in 2013, the business grew their grocery

home shopping business in its first year of operation in the country. Offering a wide range of

4,000 own brand products – 90% of which are sourced in Malaysia. They include Tesco

Value, Choice and Finest, as well as specialist ranges such as a Lighter Choices.

In Tesco, they believe the first principle of layout is circulation. Circulation is created

by arranging product so the supermarket can control the traffic flow of the consumer. Along

this path there will be high-draw, high-impulse items that will influence the consumer to

purchase which he or she did not intend. Service areas such as rest rooms are placed in a

location which draws the consumer past certain products to create extra buys. Necessity items

such as bread and milk are found at the rear of the store to increase the start of circulation.

Cashiers' desks are placed in a position to promote circulation. The entrance will be on the

right-hand side because research has shown that consumers who travel in a counter-clockwise

direction spend more.

The second principle of layout is coordination. Coordination is the organised

arrangement of product that promotes sales. Products such as fast-selling and slow-selling

lines are placed in strategic positions in aid of the overall sales plan. Managers sometimes

place different items in fast-selling places to increase turnover or to promote a new line.

The third principle is consumer convenience. The layout of a supermarket is designed

to create a high degree of convenience to the consumer to make the shopping experience

pleasant. This is done through the character of merchandising and product placement. There

are many different ideas and theories in relation to layout and how product layout can

influence the purchases made.

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Tesco

also

implemented the theory that certain products are placed together or near one another that are

of a similar or complementary nature to increase the average customer spend. This strategy is

used by retailers to create cross-category sales similarity. In other words, the toothpaste is

next to or adjacent the toothbrushes and the tea and coffee are down the same isle as the sweet

biscuits. These products complement one another and placing them near is one way marketers

try to increase purchases.

Tesco is taking advantage of their high shopper traffic levels by placing high impulse,

low priced items at the entrance to their store.  Knowing that foot traffic exceeds 30 million

every week, it strategically makes sense to capitalize on this astounding number.  The items in

this department range from $1 to $10, but if the impulse items at the entrance are able to add

even just $0.50 to the average basket size, Tesco will see a $15 million increase in revenue.

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THE LAYOUT

Tesco is also known as one of the most successful retailer for the store layout and visual

merchandising. Every Tesco store has a good division of regions for each department. The

graph below clearly indicate every department of a Tesco Hypermarket, the left part is for the

grocery areas, which include all the frozen food, bakery and dairy food; the middle part is for

the apparel and housing products, also includes pharmacy, toys and electronics; the right side

of the store has garden products. The service layout creates an open shopping environment

that helps customers find what they are looking for quickly. 

Tesco keep the layout of the stores the same regardless the location. This helps the customers

feel conformable when they walk into the Tesco stores wherever the location of the stores

they have entered. If you visit a Tesco store in Selangor, Malaysia and visit another one in

London, UK, you will notice that the store layout is very much the same, every department

whether it is clothing, electronics, foods, they will be located in the same general area as the

other stores. It will save customers time as they shop for everyday necessities.

Tesco management department will take care of the placement of every product in

order to benefit both the customers and stores sales. As an example, in the Tesco stores, you

will find out that some of the high seller products such as milk and eggs are placed at the end

of the container, but at the same time it is visible to the customer as they walk in. Therefore

the customer has to pass many low-sales products in order to get these best sellers. Tesco

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keeps using this strategy to balance the sales of different goods, which helps to organize the

supply chain.

And that would be the best element they can adopt to enhance consumers’ purchasing

behavior as well as to boost the sales of the store based on how do they design the layout of

the retail’s interior design.

REFERENCE :

Dawson, S., P.H. Bloch, and N.M. Ridgway (1990), “Shopping Motives, Emotional States, and Retail Outcomes,” Journal of Retailing, 66 (4), 408-427.

Hausman, A. (2000), “A Multi-Method Investigation of Consumer Motivations in Impulse Buying Behavior,” Journal of Consumer Marketing, 17 (5), 403-419.

Holbrook, B.M., and T. Kuwahara (1999), “Probing Explorations, Deep Displays, Virtual Reality, and Profound Insights: The Four Faces of Stereographic Three- Dimensional Images in Marketing and Consumer Research,” Advances in Consumer Research, 26 (1), 240-250.

Levy, M. and B. Weitz (2004), Retailing Management, 5th ed., Boston: McGraw- Hill.

Rook, D. and F. Robert (1995), “Normative Influences on Impulsive Buying Behavior,” Journal of Consumer Research, 22 (3), 305-313.

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