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The merchandising and display of goods is extremely important for stores in order that they maximise their sales. The majority of companies have invested heavily in research into merchandising and display and now produce plans of how they want their stores to look to increase sales. It is acknowledged that goods placed at eyelevel will sell better than those nearer the floor. In addition in some stores, major manufacturers pay retailers to display their goods in premium places such as on the end gondolas (shelves).
Sherburn Village Co-op is part of the Leeds Co-operative Society, which belongs to Co-operative Retail Trading Group (CRTG). CRTG operates as a club and so has certain rules which the member stores must follow. The group advises what should be stocked and where (and check that it is where it should be) but brings financial savings to their Co-operative members by buying in bulk. CRTG has done much research in to what items should be sold and gives feedback to all stores.
Although there is an amount of autonomy for the store managers they have very little leeway. Managers allocate a certain amount of space to a product range, for example biscuits, then ask CRTG for a planogram of how to set out the shelves. They may ask for a plan for 10 metres over 5 shelves when in reality they will be using 12 metres. This will allow them to stock more of the popular items in their particular store. In the Sherburn area, home baking is extremely popular and therefore the store stocks more of these products than would be the case in other stores.
The store cannot discontinue products without the approval of CRTG but if the managers can prove that an item does not sell in store, for example bourbon biscuits, then a request can be made to take it off their stock list. They are also able to ask for certain items to be stocked. For example if the store would normally stock only short spaghetti and they receive a number of requests for long spaghetti then this would be passed to the regional manager for approval. The store manager decides where in the store product ranges will be located. In Sherburn wines and spirits are a high seller so the manager decided to put them in a central location with special lighting to highlight the stock. The aisle ends are often reserved for promotions.
CRTG generates promotions of items and sends packs of promotions items to stores to help advertise them. Some manufacturers pay CRTG to have their products placed at eye level or on aisle ends. The local stores must comply with these orders as CRTG carries out random checks and the Co-operative Society will incur a financial penalty if the products are not in place. If local managers feel that the product would be better sited in another part of the shop they can put it there but this has to be in addition to the agreed promotion spot. For example if a crisp manufacturer wants multibuy bags of crisps on a gondola end but the manager knows that they sell better when near alcoholic and soft drinks they can put them there as long as they are on the gondola end too.
Sainsbury's too is keen that its goods are laid out in a specified manner. Head Office sends out plans of how the shelves should be laid out and there is very little leeway for the manager to change the layout of the store. There are regional differences on what is stocked in stores; examples include Vimto being very popular in Blackpool, pease pudding in the northeast and Irn Bru in Scotland as well as regional variations on local beers. In these cases the extra quantities will sometimes replace other items. Scottish and Irish stores are able to buy some of their produce locally. The White Rose Centre store does not stock the full Sainsbury's range because senior merchandisers know that the Taste the Difference range, for example, will not sell there but the Basic range will. Sainsbury's is often perceived as being expensive but it has reduced prices over the past 12 months and introduced a Basic's range as well as adding big special offers.
Non-food stores are also told by their Head Offices how the whole shop should look. The Body Shop is a good example of this. The shops are set out to a centrally agreed design. Merchandisers have worked with the fashion industry to ensure that the look is good. The Body Shop has four different styles of store:
- 'Shop Me' - each product range has its own clear, well-lit space with testers and detailed advice panels,
- 'Green Box' - the original The Body Shop fit with green wooden shelves, mirrored or coloured back drops and a green and white tiled floor.
- 'Store Revitalisation Programme (SRP)' - brighter stores, illuminate wall panels, wooden and olive tiled floor, light brown wooden shelves.
- 'New Store Concept (NSC)' - similar to the SRP with natural brown wooden wall panels and glass shelving.
The White Rose store is an example of NSC. The Head Office is prescriptive and the stores are given floor plans and must keep to them. The stores are regularly checked to ensure compliance. They have diagrams and photographs of how each bay and till area should look.
Debenhams do supply their stores with planograms but store and departmental managers have more licence to adapt them to their needs. The stores have a general footprint to work with and may allocate space to certain departments, for example, 10,000 square feet to ladies clothing and 7,000 square feet to men's clothing.
The company usually puts women's clothes and accessories near health and beauty but it does depend on the store and its location and size. If there is access to the store on two levels some managers put women's clothes on the upper floor by the door in order to encourage women shoppers into the store. The managers have a reasonably free licence to set up the store as they wish using their knowledge of what is popular locally.
Debenhams leases some of the space in its stores to other companies, such as Benson's Beds and Coast. The store manager can decide how much space is given to these concessions.
Head Office decided to introduce concessions to increase the variety of goods available in stores and to supply goods that Debenhams would not usually sell itself. The concessions pay a percentage of their turnover to the store. Debehams can earn more money from sales of its own products (42p in the £1) whereas the income from concessions is less (22p in the £1). Unlike some other stores Debenhams is not paid by manufacturers to display certain items in certain parts of the store although it does have contracts with health and beauty companies that ensure they will be placed by the main entrance.
Other companies are not at all prescriptive. The Games Workshop head office directs what is to be sold in stores but the layout in store is left to the manager's discretion. However it is suggested by Head Office that large sets are displayed at eye level. At the White Rose Centre the Games Worksop store is stocked in the order of how the goods appear on their stock checklist to enable staaff to complete reordering quickly and simply. This means that goods belonging to the same series are next to one another in the store.
Shopping Centres also have to market themselves to attract customers. The White Rose Centre advertises on radio, in newspapers and with leaflets but not on television. The reason it does not advertise on television is because the customer base for White Rose Centre is very local, the majority of shoppers come from an eight-mile radius of the centre, and the television coverage is regional.
Merchandising Questions
- Why do companies tell the managers how products should be laid out?
- Why do products on the gondola ends sell well?
- Why did Debenham's introduce concessions into their stores?
- Why doesn't the White Rose Centre advertise on television?
- Which Yorkshire regional products do you think Sainsbury's may stock?
- Why don't Games Workshop work to planograms?
- The Body Shop at the White Rose Centre is an example of which store style?
- Why do Co-op stores have to stock special items in certain places?
- Why would Debenhams locate women's products near the door?
- Why does The Body Shop not have regional specialities in store?
- How would you layout a Departments Store like Debenhams. Design your ideal store. Decide which departments you would have eg Health and Beauty Products, womenswear, menswear, home etc, decide on the size and shape of the store and draw a plan of your ideal store. Remember to include payment points, changing rooms and any other facilities you think would be important.
