Page 238 - DMGT550_RETAIL_MANAGEMENT

Unit 13: Store Design and Visual Merchandising

as a foundation, they can build the rest of the range to complement and augment it as shown Notes
below:

Figure 13.10: Retail Space Allocation

Source: http://www.thetemplargroup.com.au/article-stock/retail-space-allocation
The skill lies in getting each of these categories of stock in the correct depth and breadth.
Sales versus Space Allocation Analysis

One simple analysis that can be performed to see if your store is maximising its productivity is
to conduct this relatively simple review.
Step 1: From your sales history (six or twelve months) conduct a sales analysis of sales coming
from all departments as a percentage of the whole store.
Step 2: You can then do a similar analysis of the space allocations per department as a percentage
of the entire store (just count linear metreage for speed’s sake).

Step 3: Compare the percentages against each other to see if there are glaring anomalies. The
simple toy store example below displays a format you could use.

Allocating Space to Individual Products

1. Products, like categories are often allocated space on the basis of sales.
(a) Advantage: product is less likely to sell out

(b) Disadvantage: may not be profitable
2. Different sales figures have advantages and disadvantages
(a) historical sales

(b) market share
(c) projected sales
The usual method for measuring retail performance is according to the amount of sales
(or profits) generated by a given amount of space. Sales per square metre are a commonly used
method of assessing the value of retail space, but linear and cubic measures can also be
appropriate. Space planning needs to take account of not only the amount of space allocated, but
also the quality of space.

Example: The space nearest the front of the store and the till areas are usually the most
productive. Certain practicalities also have to be taken into consideration, such as the size and
weight of the merchandise.

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