Retail 1

Moorech08

RetailMgmgtChapter12.pptx

Home >Business & Finance homework help >Management homework help >Retail 1

Retail Management: A Strategic Approach

Thirteenth Edition

Chapter 18

Establishing and

Maintaining a

Retail Images

If this PowerPoint presentation contains mathematical equations, you may need to check that your computer has the following installed:

1) MathType Plugin

2) Math Player (free versions available)

3) NVDA Reader (free versions available)

Learning Objectives

18.1 To show the importance of communicating with customers and to examine the concept of retail image

18.2 To describe how a retail store image is related to the atmosphere it creates via its exterior, general interior, layout, and displays; and to look at the special case of non-store atmospherics

18.3 To discuss ways of encouraging customers to spend more time shopping

18.4 To consider the impact of community relations on a retailer’s image

Retail Image and Positioning

Image refers to how a retailer is perceived by customers and others.

Positioning refers to how a firm devises its strategy so as to project an image relative to its retail category and its competitors.

Customer communications are crucial for a store or nonstore retailer to position itself in customers’ minds. To succeed, a retailer must communicate a distinctive, clear, and consistent image. Once its image is established in consumers’ minds, a retailer occupies a niche relative to competitors.

For global retailers, it can be challenging to convey a consistent image worldwide. Today’s extensive use of social media by all parties (customers, the general public, the media, suppliers, brands, and retailers themselves) must be thoroughly understood by retailers and proper strategies enacted.

No firm is immune from the impact of social media content on its image.

Social media encompass online technology that allow vast numbers of people to easily communicate with one another via the Internet and mobile devices.

Through social media, messages, audio, video, photos, podcasts, and other multimedia communications are possible.

Figure 18.2 Elements of a Retail Image

To show the importance of communicating with customers and examine the concept of retail image.

Customer communications are crucial for a store or nonstore retailer to position itself in customers’ minds. Various physical and symbolic cues can be used.

Presenting the proper image

The way a firm is perceived by its customers and others—is an essential aspect of the retail strategy mix. And the growing impact of social media on a retailer’s image must be appreciated. The components of a firm’s image are its target market characteristics, retail positioning and reputation, store location, merchandise assortment, price levels, physical facilities, shopping experiences, community service, advertising, public relations, personal selling, and sales promotion. A retail image requires a multi-step, ongoing approach. For chains, there must be a consistent image among branches.

These are the factors that form a retailer’s overall image (see Figure 18.2):

Target market.

Retail positioning.

Customer service.

Store location.

Merchandise attributes.

Pricing.

Attributes of physical facilities.

Shopping experiences.

Community service.

Advertising.

Public relations.

Personal selling.

Sales promotion.

Items 1 to 6 above have been discussed in earlier chapters in the text. The remaining items are examined in this and the next chapter.

In Seconds…

A shopper should be able to determine a store’s

Name

Line of trade

Claim to fame

Price position

Personality

The Dynamics of Creating and Maintaining a Retail Image

Creating and maintaining a retail image is a complex, multi-step, ongoing process that encompasses more than store atmosphere. Now, retailers must entertain shoppers. The global head of retail strategy at Leo Burnett/Arc Worldwide has identified six major retail image positions that firms stake out:

Price Led (e.g., Wal-Mart, CVS).

All About Ease (e.g., Dollar General, local grocery store)

All About Atmosphere (e.g., Tiffany, Abercrombie & Fitch)

Ideas Led (e.g., Whole Foods, Hallmark/Gold Crown)

Price Plus (e.g., Kohl’s, Bed Bath & Beyond)

Efficient Errands (e.g., AutoZone, Lowe’s)

Atmosphere

The psychological feeling a customer gets when visiting a retailer

Store retailer: Atmosphere refers to store’s physical characteristics that project an image and draw customers

Non store retailer: Atmosphere refers to the physical characteristics of catalogs, vending machines, Web sites, etc.

A retailer’s image depends heavily on its atmosphere, the psychological feeling a customer gets when visiting that retailer. Atmosphere (atmospherics) refers to a store’s physical characteristics that project an image and draw customers. Many people form impressions of a retailer before entering its facilities or just after entering. A retailer that takes a proactive, integrated approach to create a certain “look,” properly display products, stimulate shopping behavior, and enhance the physical environment is engaging in visual merchandising.

Visual Merchandising

A proactive, integrated atmospherics approach aimed to create a certain look, properly display products, stimulate shopping behavior, and enhance physical behavior

Omni-channel Retail Image – Rebecca Minkoff

Please click URL to view video:

https://youtu.be/IR6wGM_WAvk

The Future of Omni-Channel Retail: Emily Culp of Rebecca Minkoff (18:01 mins. – first 3 minutes retail store image and experience)

Published on May 15, 2015

For today's retailer, connecting with consumers through every channel — mobile, web, and in-store—is a must. At the BRITE '15 conference, Emily Culp '06, SVP of eCommerce & Omni-Channel Marketing for Rebecca Minkoff spoke about building innovative experiences for their omni-channel consumer through insights, organizational structure and technology to drive long-term customer value. The BRITE conference on brands, innovation and technology is hosted by the Center on Global Brand Leadership at Columbia Business School. http;//briteconference.com http://globalbrands.org

Figure 18.3 A Warehouse Store Image

Not only do warehouse stores intentionally present an austere look (so that customers believe these stores do everything possible to cut costs), many also offer a deep assortment in the product lines that they carry to encourage people to be in the stores longer.

Figure 18.5 The Elements of Atmosphere

A Store-Based Retailing Perspective: Atmosphere is divided into four key elements, as shown in Figure 18.5.

Exterior Planning

Storefront

Marquee

Store entrances

Display windows

Exterior building height

Surrounding stores and area

Parking facilities

Exterior

A storefront is the total physical exterior of the store, including the marquee, entrances, windows, lighting, and construction materials. With its storefront, a retailer can present a conservative, trendy, upscale, discount, or other image. Storefronts can be chosen from among several alternatives. These are some:

Modular structure.

Prefabricated structure.

Prototype store.

Recessed storefront.

Unique building design.

A marquee is a sign that displays the store’s name. It should attract attention. See Figure 18-6.

Display windows have two main purposes: to identify the store and its offerings, and to induce people to enter. Decisions include the following:

The number.

The size.

The shape.

The color.

The themes.

The frequency of changes per year.

The height of the exterior can be disguised (when part of the store is beneath ground level) or nondisguised (when the entire store or center can be seen by pedestrians), depending on the image sought.

Good exterior visibility means that pedestrian and/or vehicular traffic must clearly see storefronts or marquees.

The goal for a retailer is to have its store or center appear unique.

The nearby stores and the surrounding area contribute to atmosphere. They present image cues.

Parking facilities can add to or detract from store atmosphere, on the basis of access, cost, and nearness. The store’s image is diminished by congestion, when its parking lots, sidewalks, and/or entrances are jammed. Customers may also spend less time shopping if they feel crowded.

Alternatives in Planning a Basic Storefront

Modular structure

Prefabricated structure

Prototype store

Recessed storefront

Unique building design

Store Entrances

How many entrances are needed?

What type of entrance is best?

How should the walkway be designed?

Three decisions about store entrances are necessary:

The number.

The type (revolving; electric, self-opening; regular, push-pull; or climate-controlled open entry). (See Figure 18.7.)

Walkways.

Figure 18.7 An Enticing Entranceway

A patisserie is a type of French or Belgian bakery that specializes in pastries and sweets. To draw in customers, this patisserie in Châlons en Champagne, France, places beautiful fresh, pink flowers near the entranceway.

General Interior

Flooring

Colors

Lighting

Scents

Sounds

Store fixtures

Wall textures

Temperature

Aisle space

Dressing facilities

In-store transportation (elevator, escalator, stairs)

Dead areas

Personnel

Merchandise

Price levels

Displays

Technology

Store cleanliness

General Interior: Once customers are inside a store, various elements affect their perceptions. Flooring can be cement, wood, linoleum, carpet, and so on. Colors can be bright and vibrant as opposed to light pastels or plain white. See Figure 18.8.

Lighting can be direct or indirect, white or colors, or constant or flashing. Scents can be natural or manmade. Music can be loud or soft, or slow or fast. Store fixtures can be planned on the basis of both their utility and aesthetics. Pipes, plumbing, beams, doors, storage rooms, and display racks and tables all affect atmosphere.

Wall textures enhance (e.g., raised wallpaper) or diminish (e.g., barren walls) atmospherics. The customer’s mood is affected by the store’s temperature and how it is achieved (e.g., central air-conditioning, fans). Wide, uncrowded aisles create a better atmosphere than narrow, crowded aisles. Dressing facilities can be elaborate, plain, or nonexistent.

Multi-level stores must have vertical transportation. These are options:

Elevator (operator-run in finer stores).

Escalator.

Stairs (for discount or smaller stores).

A combination of all three for larger stores.

Dead areas (light fixtures, wood or metal beams, doors, rest rooms, dressing rooms, and vertical transportation) are awkward spaces where normal displays cannot be set up. This is how retailers are using dead areas better:

Mirrors on exit doors.

Vending machines located near rest rooms.

Ads in dressing rooms.

Displays of impulse items along the routes of escalators.

The number, manner, and appearance of store personnel reflect the store’s atmosphere. Self-service creates a discount, impersonal image.

Top-line merchandise yields a different image than lower-quality items.

Prices contribute to image in two ways.

The level of prices fosters a perception of the store.

The way prices are displayed is a vital part of atmosphere. An upscale store places cash registers in inconspicuous areas, while a discount store locates cash registers centrally, with signs pointing to them.

The technology used by the store and the modernization of its building and fixtures also have an impact on image.

Remodeling can improve store appearance, update facilities, and reallocate space.

It typically results in strong sales and profit increases after completion.

There must be a plan for keeping the store clean.

Figure 18.8 The Impact of Lighting and Flooring

At this fashion-forward apparel store, the distinctive lighting and tile flooring both contribute to the upscale store ambience—as do the fixtures and displays.

Store Layout: Allocation of Floor Space

Selling space

Merchandise space

Personnel space

Customer space

Store Layout: Next, the specifics of store layout are sequentially planned and enacted.

Floor space is allocated among the following:

Selling space—This is the area used for displays of merchandise, interactions between salespeople and customers, demonstrations, and so on. Self-service retailers apportion most space to selling.

Merchandise space—This is the area used to stock nondisplayed items. It is large for traditional shoe stores.

Personnel space—This is the area set aside for employees to change clothes, to take lunch and coffee breaks, and for rest rooms. This area is strictly controlled because retail space is valuable.

Customer space—This contributes to mood and can include a lounge, benches and/or chairs, dressing rooms, rest rooms, a restaurant, a nursery, parking, and wide aisles. Discounters are more apt to skimp on these areas.

More firms now use planograms to assign space. A planogram is a visual representation of the space for selling, merchandise, personnel, and customers—as well as for product categories. It may be hand-drawn or computer-generated.

Product Grouping Types

Functional product groupings

Purchase motivation product groupings

Market segment product groupings

Storability product groupings

The store’s offerings are then classified into product groupings. Many retailers use a combination of groupings. Special provisions are needed to minimize shoplifting and pilferage. Functional product groupings display merchandise by common end use. Purchase motivation product groupings appeal to the consumer’s urge to buy products and the amount of time he or she is willing to spend on shopping. Market segment product groupings place together various items that appeal to a given target market (e.g., juniors’, misses’, and ladies’ apparel). Storability product groupings may be used for products needing special handling (e.g., refrigerator).

Straight Traffic Pattern

Advantages

An efficient atmosphere is created

More floor space is devoted to product displays

People can shop quickly

Inventory control and security are simplified

Self-service is easy, thereby reducing labor costs

Disadvantages

Impersonal atmosphere

More limited browsing by customers

Rushed shopping behavior

The traffic flow pattern of the store is then set.

A straight (gridiron) traffic flow places displays and aisles in a rectangular pattern, as shown in Figure 18.9. It is often used by food retailers, discount stores, drugstores, hardware stores, and stationery stores. This layout has several advantages and disadvantages.

Advantages Disadvantages

Efficiency Impersonal atmosphere

Utilizes all floor space Limited browsing

Routinizes shopping Rushed shopping behavior

behavior

Simplifies inventory control

Reduces labor costs through

self-service

Figure 18.9 How a Supermarket Uses a Straight (Gridiron) Traffic Pattern

Supermarkets are known for their use of a straight (gridiron) traffic pattern. This pattern efficiently directs shoppers throughout the store and makes shopping quicker. As indicated in the top photo, the rectangular aisles are easy to follow. The layout of shelf displays, shown in the bottom photo, also facilitates the traffic flow.

Figure 18.11 Web Site Design

The Importance of Web Site Design

This photo shows a highly stylized view of an online shopping experience. The customer is enticed by the colorful online assortment of products and the ease of shopping for current and novel merchandise.

Curving Traffic Pattern

Advantages

A friendly atmosphere

Shoppers do not feel rushed

People are encouraged to walk through in any direction

Impulse or unplanned purchases are increased

Disadvantages

Possible customer confusion

Wasted floor space

Difficulties in inventory control

Higher labor intensity

Potential loitering

Displays may cost more

A curving (free-flowing) traffic pattern places displays and aisles in an open manner. See Figure 18.10. It is used by department stores, apparel stores, and other shopping-oriented stores. This approach has several advantages and disadvantages.

Advantages Disadvantages

Friendly atmosphere Customer confusion

Customer browsing Wasted floor space

Flexibility of shopping Difficulties in inventory

behavior control

Enhanced impulse sales Higher labor intensity

Potential loitering

Costs of displays

Figure 18.10 How a Department Store Uses a Curving (Free-Flowing) Traffic Pattern

Smart Shopping Cart

Please click URL to view:

https://youtu.be/YCRO1xqZ9s0

Innovation Nation - The Smart Cart

The Henry Ford's Innovation Nation with Mo Rocca

URL: https://youtu.be/YCRO1xqZ9s0

3:26 mins.

Innovation Nation - The Smart Cart

The Henry Ford's Innovation Nation with Mo Rocca

Published on May 26, 2015

Check out this shopping cart with a brain.

Approaches for Determining Space Needs

Model Stock Approach

Determines floor space necessary to carry and display a proper merchandise assortment

Sales-Productivity Ratio

Assigns floor space on the basis of sales or profit per foot

The space for each product category is calculated, with both selling and nonselling space considered.

Under the model stock approach, a retailer determines the floor space necessary to carry and display a proper merchandise assortment. This method is used by apparel and shoe stores. With the sales–productivity ratio, a retailer assigns floor space on the basis of sales or profits per foot. Highly profitable products receive the greatest space. Food stores and bookstores use this technique. Department locations are mapped out. For multi-level stores, that means assigning departments to floors and then laying out individual floors.

Trax: In-store Execution for Retailers

Please click URL to view:

http://www.traxretail.com/ trax-soluti ...

Trax Image Recognition

Trax Retail Watch - In-Store Execution for Retailers (2:36)

Trax Image Recognition

Published on Sep 7, 2016

Trax Retail Watch is the single source of store analytics that empowers retailers to go from ad-hoc store walks to a strategically managed store execution discipline. Improve on-shelf availability, planogram compliance and promotional execution to put a permanent stop to customer frustration at the shelf. To learn more, visit http://www.traxretail.com/ trax-soluti ...

Individual products are arranged within departments. Positioning may be based on profitability, package size, price, color, brand, level of personal service required, and/or customer interest.

End-aisle display positions, eye-level positions, and checkout counter positions are the most likely to increase sales for individual items.

Shifts in store layout may decrease sales by confusing shoppers.

The least desirable display position is often knee or ankle level, because consumers do not like to bend down.

Large retailers sometimes use video-tracking equipment to study shoppers’ in-store traffic patterns. That is not feasible for small retailers, and alternatives are recommended in the textbook.

Retailer goals often differ from their manufacturers.

Self-service requires a gridiron layout and clearly-marked aisles, displays, and merchandise.

The text lists some tactics supermarkets have employed in arranging product layouts.

Interior (Point-of-Purchase) Displays

Assortment display

Theme-setting display

Ensemble display

Rack display

Case display

Cut case

Dump bin

Interior (Point-of-Purchase) Displays

The retailer devises interior point-of-purchase displays, which provide shoppers with information, add to store atmosphere, and serve a substantial promotional role. An assortment display exhibits a wide range of merchandise.

An open assortment encourages customers to feel, look at, and/or try on products. It is used for greeting cards, books, magazines, and apparel.

A closed assortment does not permit touching and/or trying on items. It is often used for computer software, CDs, and DVDs.

A theme-setting display depicts a product offering in a thematic manner and sets a specific mood (e.g., Presidents’ Day).

With an ensemble display, a complete product bundle is presented—rather than showing merchandise in separate categories (e.g., shoes, socks, pants, shirt, and sports jacket).

With a rack display, merchandise is hung and displayed on a rack. Major problems are cluttering and misplaced items. However, current technology enables retailers to use sliding, disconnecting, contracting/expanding, lightweight, attractive rack displays. A case display exhibits heavier, bulkier items than racks hold.

A cut case is an inexpensive display that leaves merchandise in its original carton. A dump bin has an open assortment of roughly handled items (e.g., piles of sale clothing). Both project a low-price image.

Posters, signs, and cards can dress up all types of displays. They provide information and stimulate customers to shop. A mobile, a hanging display with parts that move, serves the same purpose—but stands out more. Electronic displays are also widely used.

Figure 18.12 Fashion Show

Making the Shopping Experience More Entertaining and Interactive

One way that retailers can greatly enhance the shopping experience—and get customers to spend a lot more time in the store—is to have events such as the fashion show highlighted here.

Impact of Social Media on Fashion Brand Strategy

Please click URL to view:

https:// youtu.be/BLv_1fyCfLE

URL: https://youtu.be/BLv_1fyCfLE

Inside Rebecca Minkoff's Revolutionary Approach to New York Fashion Week (5;39)

Bloomberg

Published on Feb 11, 2016

Feb. 10 -- Designer Rebecca Minkoff and Uri Minkoff, chief executive officer at Rebecca Minkoff, discuss the changing landscape of fashion and luxury goods, the impact of social media on the fashion industry, and their brand strategy. They speak on "Bloomberg Surveillance."

Online Store Considerations

Advantages

Unlimited space to present assortments, displays, and information

Can be customized to the individual customer

Can be modified frequently

Can promote cross-merchandising and impulse purchasing

Enables a consumer to shop in quickly

Disadvantages

Can be slow for dialup shoppers

Can be too complex

Cannot adequately display three-dimensional aspects of products

Requires constant updating

More likely to be exited without purchase

A Nonstore-Based Retailing Perspective

Many atmospherics principles apply to both store and nonstore retailers. However, there are some distinctions which are examined from the perspective of the Web retailer.

A Web retailer’s storefront is the home page. It must accomplish the following:

Prominently show the company name and indicate the positioning of the firm.

Be inviting.

Make it easy to go into the store.

Show the product lines carried.

Use graphics as display windows and icons as access points.

Have a distinctive look and feel.

Include the retailer’s E-mail address, mailing address, and phone number.

Indicate that the retailer is involved with social media.

Be listed at various search engines.

See Figure 18-11.

A Web retailer’s general interior sets a shopping mood. It includes these elements:

Instructions about how to use the site.

Information about the company.

Product icons.

News items.

The shopping cart (how orders are placed).

A product search engine.

Locations of physical stores (for multi-channel retailers).

A shopper login for firms that use loyalty programs and track their customers.

There are two components of store layout for a Web retailer: the layout of each individual Web page and the links to move from page to page. Some online firms use a gridiron approach, while others have more free-flowing Web pages and links. Web companies often have a store directory on the home page. Many retailers provide an interactive search engine.

Increasing Shopping Time In-Store

Increasing amount of time a shopper spends in a store (excluding waiting in a line)

Experiential merchandising

Solutions selling

Co-branding

Enhanced shopping experience

Wish list program

Encouraging Customers To Spend More Time Shopping

The amount of time a shopper spends in a store (excluding waiting in a line) is perhaps the single most important factor in determining how much he or she will buy. The tactics used to persuade people to spend more time shopping include experiential merchandising, solutions selling, an enhanced shopping experience, retailer co-branding, and wish list programs.

The aim of experiential merchandising is to convert shopping from a passive activity into a more interactive one, by better engaging customers Examples of how retailers are using experiential merchandising are provided for Urban Outfitters, and Williams-Sonoma.

Solutions selling takes a customer-centered approach and presents “solutions” rather than “products.” For example, supermarkets sell fully prepared, complete meals that just have to be heated and served. An enhanced shopping experience means the retailer does everything possible to minimize annoyances and to make the shopping trip pleasant. Firms can provide an enhanced experience by:

Setting up wider aisles.

Adding benches and chairs for those accompanying shoppers.

Using kiosks to stimulate impulse purchases and answer questions.

Having activities for children.

Opening more checkout counters.

Providing shopping carts. (See Figure 18-13.)

Co-branding exists when two or more well-known retailers situate under the same roof (or at one Web site) to share costs, stimulate consumers to visit more often, and attract people shopping together who have different preferences. Examples are provided.

A wish list program is a technique that enables customers to prepare shopping lists for gift items they’d like to receive from a particular store or shopping center.

Supermarket Layout - Psychology

Please click URL to view:

https://youtu.be/ThNeIT7aceI

URL: https://youtu.be/ThNeIT7aceI

3:26 minutes

How the Layouts of Grocery Stores are Secretly Designed to Make You Spend More Money

Published on Jan 24, 2016

Did you know that the way a grocery store is arranged is calculated to make you spend the most money profitable? In fact, the way the aisles are arranged can be the difference between a successful and failing grocery store.

Community-Oriented Actions

Make stores barrier-free for disabled shoppers

Show a concern for the environment

Support charities

Participate in anti-drug programs

Employ area residents

Run sales for senior citizens and other groups

Sponsor Little League and other youth activities

Cooperate with neighborhood planning groups

Donate money/equipment to schools

Check IDs for purchases with age minimums

The way that retailers interact with the communities around them can have a significant impact on their image and performance.

Stores can enhance their stature by engaging in actions such as these:

Making sure stores are barrier-free for disabled shoppers.

Showing a concern for the environment.

Supporting charities.

Participating in antidrug programs.

Employing area residents.

Running special sales for senior citizens and other groups.

Sponsoring Little League and other youth activities.

Cooperating with neighborhood planning groups.

Donating money and/or equipment to schools.

Carefully checking IDs for purchases with age minimums.

Examples of companies involved in their communities are provided. Community relations efforts can be undertaken by companies and organizations of any size and format.

Retail 1

image1.emf

image2.jpg

image3.jpg

image4.wmf

image5.jpg

image6.jpg

image7.jpg

image8.jpg

image9.jpg

image10.jpg

image11.wmf

image12.jpeg