January 27, 2016

Space
Managem
ent
Unit 3

Supply Chain Management

Use floor space effectively

Optimise short- and long-term returns on investment into
retail space
Provide a logical, convenient and inspiring productcustomer interface
Make right selection of products available
Communication of retailers brand identity

THE SPACE
MANAGEMENT
PROCESS
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STAGE 1: MEASURING RETAIL SPACE

STAGE 1: MEASURING RETAIL SPACE

STAGE 1: MEASURING RETAIL SPACE

Sales volume and profitability can be measured in relation

to the amount of space used to generate them

This provides productivity measures, e.g.

sales per square feet/metre

profit per square feet/metre

sales per cubic metre

Allocation of space to product department or category

Usually based on previous performance indication,

typically sales

Some products require disproportionately large area (e.g.

furniture) others can withstand disproportionately smaller
area (e.g. jewellery)

Category life-cycle may influence amount of space

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The Decompression Zone - It takes a shopper 5-15

paces to refocus and adjust to store lighting and
downshift from walking-speed to shopping-speed

The Invariant Right - US shoppers turn right 75%

of the time

The Butt-Brush Theory The likelihood of a female

shopper to be converted from browser to shopper
is indirectly proportional to the likelihood of being

Shoppers going to the right as

they enter the store

disturbed
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1. Airport travelers drifting toward their gate will always find the fast-food
restaurants on their left and the gift shops on their right

2.women's product that requires extensive examination should never be

placed in a narrow aisle

3.Invariant Right is a function of the fact that we "absorb and digest

information in the left part of the brain" and "assimilate and logically use
this information in the right half," the result being that we scan the store
from left to right and then fix on an object to the right "essentially at a 45
degree angle from the point that we enter."

4. "Men tend to be more impulse-driven than women in grocery stores

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Converting numerical data into a workable outlet layout,

considering inflexible elements:

entrances, walkways, checkouts

Consider space quality

Consider logical flow through products and complementary

categories

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PRODUCT ADJACENCIES

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Products, like categories are often allocated space on the

basis of sales.

Advantage: product is less likely to sell out

Disadvantage: may not be profitable

Different sales figures have advantages and disadvantages

historical sales

market share

projected sales
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Capture cross-selling opportunities

DVD players next to Monster Cables

TVs next to video game hardware or Tivo

MP3 players next to Computers

Dual-merchandise high margin convenience

items in high traffic areas throughout the
store

Blank tapes, batteries, and paper supplies

Connectors and cables

Increase the size of the customers shopping

basket
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Seasonality

Product characteristics: size, weight, hazards, chilled and

frozen, fragile, expensive, contamination

Customer characteristics

mobility

Fixture limitation

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Inputs:

Product information
costs, sales, dimensions, complementary products

Fixture information
specific requirements of product (e.g. shelf level), dimensions, number available

Product manager knowledge/experience

space and cross elasticity, stock holding objective, life-cycle stage

Output

Planogram or visual display map

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Advantages:

optimises space productivity

maintains consistent corporate identity

allows retailers to experiment with visual display

helps to achieve efficient assortment

moving towards store specific planograms

Disadvantages:

costs

not appropriate for small retailers or where displays are frequently

changed (e.g. independent fashion retailer)
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Many would argue that space planning and allocation and category
management go hand in hand.

Space planning systems help retailers to fine tune category

assortment and analyse product and category performance

Planograms by category ensure stores are implementing category

plans

Consumer behaviour (decision sequence) can be accounted for within

the space allocation plans
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