Macro space planning tips for independent retailers

Retail Insight by Pete Humm Head of Retail 29/03/2017

Head of Retail, Pete Humm suggests Macro Space Planning tips for retailers looking to optimise their stores, whatever the size of the retail estate

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Base your macro space planning on fact not fiction

Whatever the size of your retail estate, macro space planning should always be based on fact. Head of Retail Pete Humm suggests his top tips for retailers looking to optimise their stores.

The science of space planning for shops and stores can be an incredibly complicated world to explain. However, regardless of whether you are a small independent shop or a chain with hundreds of outlets, the difference between getting it right and getting wrong will have a fundamental effect on your profitability.

There are also many pieces of software available to address all parts of the process, but fundamentally the best practice is to analyse your profitability and shopper patterns before you plan your store. Whether you do this with software or by listening to your customers in the case of smaller retailers is irrelevant, planning should be based on facts.

Impact of location, facilities and customer preferences

Taking a pet shop as an example. Your decision on whether to stock and where to locate bulky and heavy products will be different when considering an identically-sized out of town store with an on-site car park in comparison to a high-street store without convenient parking.

Understanding your local clientele and altering the balance of space between cat and dog food if a local site has a sales track record of higher % feline sales then canine, could help maximise sales.

Accessing and reacting to information

Most large retailers aspire to a store specific space model where each shop in their portfolio has room to adjust its range to the demands of the location, shopper trends and shop size.

This is where larger chains have the advantage of more information. They can analyse sales and demographic data for individual sites and then cluster stores together through non-geographical criteria, to improve ranging and performance. However, smaller chains and stores can be more nimble – changing direction or stocking fashionable or innovative items as the opportunities arise.

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Essential space planning tips

And so, as one of the leading retail space planning companies in the UK working with a wide range of retail clients, here are some key space planning points to consider:

Space

Promotional space – manage carefully and update often, this can help drive footfall and improve customer loyalty.
Understand your available selling space when negotiating supplier’s share of shelf space within your stores
In-store compliance – all the planning and software in the world is useless if in-store implementation is not 100% delivered to plan / planogram
Less can be more. Don’t overfill your shop with free standing shippers / display units

Products

Know your best sellers and most profitable products (often not the same items) and ensure they are easy to find. Place associated impulse products close-by for additional sales opportunities.
Understand your range ‘tail’ and delist items that aren’t selling fast enough
Be aware of product cannibalisation when considering new ranges. It’s pointless stocking new items, if they take sales away from an existing range with no net gain.
Supplier funded promotions / display – larger retailers often ask their suppliers to sponsor or fund in-store activity or promotions – don’t be afraid to ask

Customers and Competition

Keep on top of trends and regularly visit your competition.
Understand your customer journey and enhance with signage. Surprise your customers with offers and new products where you can.
Don’t underestimate the importance of human contact in all of this. We have clients where a good front of house member of staff can increase customer loyalty and give an uplift to takings and profitability over time

Informed space planning requires knowledge of your products, your customers and your retail space and can be facilitated by specialist software. Successful implementation however can be challenging and needs commitment and communication from staff in-store. If all space changes are recorded and plans are kept up to date, decisions can then be based on accurate information and the impact of changes on sales and profitability can be understood.

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