Departmentalization

Space allocation
Layout Design

Rajnish Kumar
Departmentalization

 Why it is required

 How it is done

 What is the best way ??

 A look at the Market ….
Category Mkt size '06 % share '06 growth rate Mkt size '10 % share '10 growth rate Mkt size '15 % share '15

US $bn btw 2005- US $bn btw 2015- US $bn

2010 2010
Food beverage & tobacco 195 65% 7% 256 60% 6% 342 54%

Personal care 15 5% 11% 23 5% 9% 35 5%

Apparel 21 7% 11% 33 8% 9% 50 8%

Footwear 5 2% 11% 7 2% 9% 11 2%

Furnishings 4 1% 15% 7 2% 12% 12 2%

Consumer durables & IT 14 5% 15% 24 6% 12% 43 7%

Furniture 9 3% 15% 16 4% 12% 28 4%

Jewelery & watches 15 5% 12% 24 6% 9% 37 6%

Medical & health services 8 3% 12% 12 3% 12% 21 3%

Recreation 2 1% 1% 3 1% 15% 7 1%

Others 12 4% 18% 23 5% 16% 53 8%

Total 300 428 639

How has it changed
Impact on consumer spending/shopping behavior:
In 1991 there were just 7 categories accounting for 80% of consumer
spending. These have expanded to 18 in 2008 and the list is expanding !
1991 2008

1.Food & Grocery 1.Food & Grocery

2.Clothing
2.Clothing 3.Footwear
3.Footwear 4.Consumer durables
5.Expenditure on DVDs & VCDs
4.Consumer durables 6.Home Linen
5.Home Linen 7.Home accessories
8.Accessories
6.Movies & theatre
9.Gifts
7.Eating out 10.Take away/ pre-cooked/RTE meals
11.Movies & theatre
12.Eating out
13.Entertainment parks
14.Mobile phones & service
15.Household help
16.Travel packages
17.Club membership
18.Computer peripheral & Internet usage
Customer :
 Demographics:
 SEC A/B/C of Tier-II towns
 Mostly families from town, business/service
class
 Age: 25-40 years, males/females
 Psychographics:
 Progressive/exposed to current trends
 Shopping is an experience v/s. shopping as a
chore
 Is a discerning shopper – seeks good quality
products and wants to stretch his wallet
 Wants to emulate friends in Metros
 Takes his Indian’ness seriously and has strong
peer pressure
 Category Role
Category Role Retailer View Customer View Example

Traffic Builder Lower Margin Saving Fruits and Vegetables

High Frequency Top Ups/Convenience Eggs
FMCG

Cash Cow High Margin Aspiration Toys and Games

Destination High cost of acquisition Home Linen
from alternate source Branded Luggage

Perception builder Medium Margin Value Pricing Apparel

High Fashion Lifestyle
Merchandise Mix Departments

 Apparel - 20 % All Store

 Footwear - 10 %
 Toys - 5%
 Soft Home - 10 %
 Hard Home - 20 % FMCG Hard lines Soft lines
 CD - 15 %
 FMCG - 30 %

** On the basis of sales Turnover

Personal For The Home
Grocery CD Apparel
care Home Linen
Space Allocation

 Who does it and how is it done

 Evaluation
Space Allocation
Store Planner’s Responsibility
Department Locations
Entrance
Which Floor
Position on the floor
Store traffic flow
Near Elevator / Escalator
Men’s/Women’s Category
Demand / Destination Areas
Impulse Products
Physical Characteristics of Merchandise

Trivia – 50% of Women get their ideas for clothes from store displays or window Shopping
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Space Allocation

 Department adjacencies

 Avoid Butt Brush

 Factors for Merchandise display

What Merchandise
How Much Merchandise?
How Much Space?
Where to Place?
Total Expected Sales within dept

 Evaluation
 Sales Per Square Foot
 Sales Per Linear Foot

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 Space Allocation Plan 1 ST Floor - 6600 Sq Ft.
Department Area Allocated (Square Feet)
Apparel
Men's wear 1500
Tailor for alterations 100
Trial Rooms(2) 100
Women's wear 500
Trial Rooms(2) 100
Kid's wear 1000
Footwear 800
Toys 400
Soft Home 500
Hard Home
Stainless Steel Utensils 100
Plastic household items 100
Melamine 100
Non-stick 100
Thermo ware 100
Crockery/ Glassware 200
Luggage 100
Furniture 400
Mobiles 100
Watches 100
Bakery/ Cafeteria 200
Total 6600

**In case the floor area is lesser the space will be allocated either proportionately or based on the market potential
Plano gram of Hard Lines Department

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Evaluation – Space productivity Index

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Subcategories with Low SPI need to be evaluated
Store Layout

• The way in which the Fixtures and furniture is arranged within a store
• It controls the movement and flow of traffic within the Store
• It also plays a major role in determining ‘shopping experience’
•Is important for the image of the store

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Store Layout - Types

 Grid

 Race Track

 Free Flow

 Spine

 Herringbone

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Store Layout - Types
Grid

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 Why Grid Layout

 Food World, Food Bazaar, Reliance Fresh, Etc.

 Grocery Stores
 Long Gondolas
 More Shelves
 Repetitive Pattern
 Lesser Aisle Space
 Customer Familiarity
 More Cost Effective
 Higher Space productivity

Disadvantages – Poor Product Exposure , Rushed Shopping behavior & Poor aesthetics

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Store Layout - Types

Race Track / Loop Layout

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Why Race Track / Loop Layout

 Lifestyle, Shopper’s Stop, Central, Etc

 Main Aisle loops through the store
 View of multiple departments
 Access to multiple departments
 Exposes more merchandise
 Most important departments on the rear of the Store
 Department Flooring, Lighting & Ambience change
 Encourages
 Exploring new merchandise
 Impulse Buying

Disadvantages –
Takes time to shop and move around.
Offers little familiarity

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Store Layout - Types

Free Flow/ Free Form Layout

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Why Free Flow

 West Side, Wills Lifestyle, Etc.

 Fixtures & Aisles asymmetric
 Boutique Layout
 Specialty Stores or Within Departments of large stores
 Expensive fixtures

Disadvantage
Wastage of Space
No control of flow of traffic
Store Layout - Types
Spine Layout

 Tanishq, Titan Eye Plus , Raymond’s, Etc.

 Single Main Aisle runs from front to rear
 Both directions 22
Store Layout - Types
Herringbone Layout

 Croma
 Apt for Consumer Durables & Hardlines
 Single Main Aisle runs from front to rear 23