Page 188 - DMGT552_VISUAL_MERCHANDISING

Unit 9: Merchandise Presentation

The usual method for measuring retail performance is according to the amount of sales (or Notes
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; for 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.
Space-allocation decisions usually need to be made at various levels of merchandise
classification, for example at departmental level, product category level and SKU (stock
keeping unit) level. Retailers usually have some historical data that can act as guidance in
the allocation of space, for example a similar store’s performance, or historical department
sales figures, but the need for the maximisation of financial objectives means that space
planning and allocation is under constant review and refinement at individual store level.
The allocation of space can be geared towards different objectives, for example achieving
the highest sales turnover, maximising product profitability or maximising customer
satisfaction, and a retailer may be faced with making trade-off decisions in order to achieve
those objectives. Those products that generate the highest sales value may only achieve
low profit margins, but concentrating on high-profit items may put unnecessary emphasis
on products that are less of concern to customers, thereby decreasing their levels of
satisfaction. The matrix suggests alternative space allocations according to whether a
product has high profitability or high sales.

The complexity of space-allocation decisions has encouraged the use of computer-based
systems as a retail management aid. Modern space-allocation systems are able to synthesise
a plethora of quantitative and qualitative data such as product costs, sales forecasts, product
sizes, complementary purchasing potential, fixturing details and so on. The output of
these systems is a space-allocation plan or planogram that shows exactly how the products
should be displayed on the fixturing, including the number of facings of each product that
the customer should see.
Deconstructing and evaluating the display: The construction and monitoring of the merchandise
presentation is not the final stage in coordinating the process. At some stage, the merchandise
display will need to be finalised. This will be due to a number of factors, including:
 The end of a promotional event

 The end of a season
 Changing product demands
 The need for space for other merchandise presentations
When the merchandise presentation has been completed, there are two final tasks that are
required to be completed. These are:
1. Dismantling the presentation: As with the construction of the display, when dismantling
the presentation you need to consider:

 Communication: Team members need to be aware of all requirements, including:
 Location where all promotional items must be withdrawn for storage/re-
merchandising

 Location where all associated equipment is to be stored
 Correct procedure for remarking of stock to post-sale prices to ensure
compliance with store procedures

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