Optimizing Retail Space: Gondola Placement & Merchandising Strategies

Posted on Mar 11, 2025 in Business Administration and Management (BAM)

Gondola Placement Criteria

  • Dimensions: Consider the size of streets and alleyways. Usually, a counter-clockwise flow is preferred.
  • Corners are often “cold” spots.

Linear Space Optimization

The goal is a successful commercial rollout, limited by three key parameters:

  1. Sales Area Imperatives: Adapt to the demands of the sales area.
  2. Customer Circulation: Maximize the area customers traverse.
  3. Minimize Dwell Time: Encourage quick purchases and efficient customer turnover.

Key considerations include entry and exit points, gondola types, and gondola lengths.

  • Tickets to the right are a common strategy.
  • The warehouse is typically located in the background.
  • Entrances should lead to broad streets.
  • Prioritize major and secondary streets within the store layout.
  • Ensure the store can handle peak traffic (e.g., Saturday at 7 PM).
  • Place high-demand items towards the back of the store.
  • Clothing, DIY, and electrical sections often perform better on the right side.
  • Position impulse-buy items in high-traffic areas.

Four Rules for Large Store Layouts

  1. Place impulse-buy items on main axes.
  2. Visually highlight key items to attract attention.
  3. Group complementary products together (e.g., wine and appetizers, shirt and tie).
  4. Carefully plan the transition between sections.

Three Elements for Small Retail Spaces

  1. Window Display: Change the window display weekly to maintain interest.
  2. Customer and Goods Space: Allow ample space for customers to interact with products.
  3. Cash Register Location: Position the cash register to monitor the store, not necessarily near the entrance.

Frontage and Linear Concepts

Frontage: The space a product occupies as seen by the customer on the shelf, regardless of stacking.

Linear on the Floor: The length of presentation furniture on the floor.

Linear Developed: Takes into account all levels of presentation.

Capacity Front: The number of units in volume compared to related EU standards.

Linear Elasticity: The relationship between linear space and sales.

Linear Elasticity Thresholds

There’s a point where increasing linear space doesn’t increase wholesale sales. Below a minimum threshold, vendors may not serve the store adequately. The goal is to operate between the minimum and maximum saturation thresholds.

Profitability Considerations

If the gross profit of a product is greater than the gross profit of its family, provide more linear space to that product.

If the developed linear space of a product is less than its family, consider removing the product from the linear display.

Double Location Strategies

Double Location: Displaying the same product in multiple locations (e.g., coffee filters).

Types of Dual-Site Placement

  • New Products: Increase visibility and drive initial sales.
  • Seasonal Products: Feature items like swimsuits in summer and gloves in winter.
  • Related Products: Group products from the same or related families (e.g., salted crackers with cookies and desserts).
  • High-End Products: Create an image of exclusivity.
  • Highly Profitable Products: Feature items like moisturizers and razors.
  • Replacement Products: Ensure easy access to frequently replaced items.

Product Presentation Methods

  • Horizontal or vertical arrangement
  • Strategic level selection within the linear space
  • Consideration of specific product characteristics

Seven Reasons for Vertical Family Grouping

  1. Natural head movement
  2. Sense of movement
  3. Balancing profitability between families
  4. Improving linear readability
  5. Pacing
  6. Augmenting changing shelf levels
  7. Highlighting

Shelf Placement Guidelines

  • Feet Level: Heavy, bulky items that are easy to read vertically.
  • Hands Level: Items that don’t require impulsive buying; actively sought complementary items.
  • Eye Level: High-value, spontaneous demand products.
  • Hat Level: Products of questionable value.

Two Product Groups

  1. Products with striking packaging
  2. Safety stock items

Gondola Header Strategies

  1. Present a “mass” of a single product.
  2. Offer a discounted price to drive volume.
  3. Rent the space to suppliers.
  4. Recognize that some customers only shop at the top of gondolas.
  5. Rotate products every 10 to 15 days.