The way retailers organize and arrange products in store space strongly impacts customer behaviour within stores. The buyers’ baskets are heavily dependent on store layouts which has been proved by different research cases. Succesful retailers and suppliers incorporates their own primary research findings into store layout development.
Of course, even the gut feeling of store operators supports this – they just know that moving ice-cream refrigerator from a barely visible corner to highly frequented counters works as miracle for sales. Etc.
Easily we can claim that store layouts and the processes behind maintaining and improving them are not just core but also crucial advantage of every retailer.
— CATEGORY-BASED ARRANGEMENTS
Product categories are usually defined as discrete groups that consumers perceive as similar or related. Something to protect and comfort the human foot might be called a shoe. And this makes a typical category within larger segment of clothing etc.
Store retailers usually combine products in categories and decide on particular position and size within store.
As category management grew up together with computer tools such rational categorization supported by retail mathematics of space profitability soon set the standards for efficient store space.
— ADVANCED SPACE ARRANGEMENT PRINCIPLES
But rationally and logically organized is not the same as efficient. As buyers we are buying with all the senses and not only with brains. The stores that would be organized only by logical principles are rare and usually not on the thriving edge of retail.
Just take your regular supermarket store into focus.
Yes, there might be category-based arrangement prevailing – you get all the dairy products or non-alcohol beverages on one place. This makes it easier for you to stock-up on routinely bought categories.
But there is definitely a part of the store where you expect different categories put together as pleasantly as possible. In deli you expect cheeses to be placed close to sliced meat, vegetable spreads. Oh, yes, and maybe some local wine or a bottle of chianti. How about home-made biscuits? Also. So here we are not in a category-based arrangement mode anymore. We better call it goal-based arrangement.
From here to mission-based is just a step. Heat & Eat department, On-the-go etc. Here we can find smoothies, sliced fruit, sandwiches, dips, salads etc. all placed together. Definitely higher added value for the customer – if we have a base of customers that’s big enough.
But there might be even higher level of arrangement, based on seasonality (Summer Party) or specific rituals (Back To School) or even attitudes or ethical shopping. Fair Trade section could be a confirmation of latter.
Same principles apply also to specialty stores. In consumer electronics gaming section means much more than ordering recently published games into racks. Gaming could start with gaming chairs, special equipment, provide experience, build community etc.
Not to mention, the one and only, IKEA. Their categories are structured on higher level. It’s far from putting all the sofas together, all the wardrobes together, all the beds together, which was the regular arrangement rule before IKEA became the ruling power and furniture selling transformed into home design. This might be a bit overlooked power of Ikea but is actually organically inscribed in the DNA of the company.
— LEVERAGES FOR SUCCESFUL RETAIL SPACES
As mentioned, traditional category management struggled to organize assortment within confines of categories and then applied all sorts of computer-based operations on these.
Advanced category management (we call it “swift category management”) should support different hierarchies of product arrangement as described above.
Actually it should give architects and interior designers the inputs for drawing creative store spaces, then support the layouts through machine learning processes.
That’s what Omnibus’s retail store layout proposal product #Leverages is in its core. It provides 1) full flexibility but also 2) firm guidelines in this area.
I’ll write about best practices where we used the #Leverages principles, its theory & practice in the following months. Of course, you’re kindly invented to read our free PDF or/and jump on-board. Our team will be glad to analyse your retail space, discover opportunities and help supporting your teams to take the right steps toward remodelled store layouts.