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Increasing profits using simple design techniques

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It is important for retailers to learn how to spot trouble areas in their stores and provide an effective layout to maximize profits from every square inch of space.

By Ted Lawrence

In the culinary industry, people tend to eat with their eyes first—if it looks good, it is probably going to taste good. This motto can be carried over into the retail industry as well. For instance, people shop with their eyes first; if the store does not look like it should, the consumer will walk away and the retailer will likely miss out on several sales opportunities. Therefore, if a retailer is trying to sell a premium product and the store looks bargain basement, they generally will not get, nor can they ask for, a premium price.

See the store in a different way

Many retailers tend to become too comfortable with their surroundings and often do not see their stores in the same way as the consumer. Therefore, it is important for retailers to take a different look at their store by walking through it and observing the layout and product displays from the consumer’s point of view. During this exercise, the retailer should step out of their ‘bubble’ and look at their store based on how two very different customers would see it.

First, through the eyes of a new customer who is unfamiliar with the store and may not have any knowledge about pools, and second, as a repeat customer who is already accustomed to the store and more than likely brings in water samples for testing every week.

What modifications can be made to better serve both of these customers? Some changes may seem quite obvious when observing the store in this manner; however, in many cases, small, subtle changes can go a long way as well. The goal of this article, and exercise, is to learn how to spot trouble areas and provide an effective retail store layout to maximize profits from every square inch of retail space.

The beginning

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The parking lot is the customer’s first impression of the store and many will decided if they want to venture inside simply by the way it looks on the exterior.

It all starts when the customer pulls into the parking lot. The parking lot should be lined, kept clean, and free of any clutter, with plenty of parking spaces up front. This is the customer’s first impression of the store and many will decided if they want to venture inside simply by the way it looks on the exterior.

Further, the point of entry should be visible and/or marked, and window displays should convey a clear message to the consumer. Window promotions tell the consumer what they are about to walk into and are the starting point of their retail experience.

First steps

As consumers walk into the store it should provide them with a pleasant, welcoming feeling. Visually the store should allow the consumer a 1.8-m (6-ft) decompression space (when they enter the store) where they can take in the store without feeling crammed or pressured. If the consumer is immediately hit with stacks of product they may feel like they are being backed into a corner. If they do not feel welcome, they may turn around and walk out. Further, if their expectations—based on the exterior and/or window displays—are not met, a retailer could lose their credibility. For example, a store that is having a beginning of season sale that is being promoted outside with balloons and signs should not look like the same store the consumer is familiar with when they walk in. If it does, the credibility of the sale is lost. Therefore, the retailer needs to carry the message and feel of the sale into the store as well.

This also works in reverse. For instance, the inside of the store can convey one message, while the exterior may say another. This can confuse the customer, create doubt, and reduce the impact of their shopping experience. As the consumer walks in, they should be able to see all the way to the back of the store and be greeted with products that are fun, e.g. toys, games, loungers, etc. This gives the store a fun and exciting appearance.

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Items consumers need once they have a pool, e.g. chemicals, maintenance products, filters, and testing supplies should be located on the left side of the store.

Items consumers need once they have a pool, e.g. chemicals, maintenance products, filters, and testing supplies should be located on the left side of the store as this is the least frequent direction consumers travel when shopping in a store. This is not to say these items are not important, but rather these are the products consumers typically come in for.

New products, vendor displays, and high-margin items should be located on the right side of the store where consumer’s eyes and feet tend to gravitate. As the consumer gets further into the store, they should be exposed to helpful items with good visual displays such as automatic pool cleaners, chlorine generators, lighting, fountains, energy-efficient items and eco-friendly products.

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The items located on end cap displays should be high-margin sellable products that are relevant to all pool owners.

The items located on end cap displays should be high-margin sellable products that are relevant to all pool owners—not closeouts or discontinued items, but products that make the most money. For example, grocery stores use end caps to promote high-profit seasonal items—it is not a coincidence that canned pumpkin, cinnamon coffees, and pie-making supplies make their way to the end caps in the fall. Grocers know consumers are coming in for these items during those times, so they make sure they show the brands they want to sell, which make them the most money. It may not be the brand the consumer came in for, but it is easy for them to grab the product off of the end cap rather than search for it.

To test this theory, retailers can put a different brand of product (e.g. shock treatment) on an end cap during the beginning of the season, mark it up 50 per cent more, and watch what happens. Believe it or not, it will sell and the retailer will see a higher profit margin.

Keep it simple

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To give the illusion of product depth, shorter 152-mm (6-in.) hooks should be used instead of standard 203-mm (8-in.) or 305-mm (12-in.) hooks.

Merchandise displays should attract and interest customers rather than overwhelm and confuse them. Each display should have a focal point or a theme to catch the customer’s eye and draw them in. The goal is to attract attention to the product; therefore, these displays should be kept simple and clean. Neat, even rows are often the best and most logical display strategy. Similar products should be grouped together in a logical fashion, while the number of brands displayed should be kept to a minimum.

Clutter tends to convey disorganization, cheap products, and poor management. A retailer should opt for more breadth of product selection per manufacturer versus more depth. To give the illusion of product depth, shorter 152-mm (6-in.) hooks should be used instead of standard 203-mm (8-in.) or 305-mm (12-in.) hooks. A long empty hook or one that has a single product on it looks messy and picked over. Smaller 102-mm (4-in.) wall hugging hooks also work well. Simply switching the size of retail display hooks can change the way a store looks and feels.

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