Consumer spending

The aim of this project is to gain the knowledge of the methods which supermarket retailers used configure and manipulate their store space. In the past, when customers walked into a store, they might only expect to find the products they were planning to purchase. Due to the intense transformations within the retail market during the past few decades, customers have become more demanding. Today, when customers walk into a store, they will expect more than finding what they need, the shopping experience, price, product, quality, brand, service and lots of other issues has all became their concern.

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Therefore, retailers have been trying to make improvements in order to meet the increasing consumer demands. One of the major concerns to retailers has been the space management within the store. The effectiveness of space management could have huge impacts on the performance. The main purpose of this study is to understand the importance of space and the methods adopted by retailers to configure and manipulate their store spaces to increase consumer spending.

During the research process of this project, two different supermarkets were observed to understand their methods of managing the store spaces. “Tesco” and “Sainsbury’s” in Guildford were chosen as the targets for the research. The findings from the research will then be analysed and discussed in this report. This report will first be reviewing some of the previous studies on space configuration and manipulation. Follow by identifying the methods of space management adopted by the two observed retailers. Finally, the findings from the research will be discussed and concluded.

This chapter will be reviewing some of the previous studies which associate with the topic of retail store space configuration and manipulation. According to Lowe, M. & Wrigley, N. (2002), retailers has realised that configuration and manipulation of space is an intensely geographical phenomenon. Developers and designers of the retail built environment have consistently exploited the power of place and an intuitive understanding of the structuration of space in order to facilitate consumption (Goss, 1993).

Increasing space productivity represents a powerful truism in retailing: the more well presented merchandise customers are exposed to, the more they tend to buy. By careful planning of the store layout, retailers can encourage customers to flow through more shopping areas, and see a wider variety of merchandise (Levy and Weitz, 1998). Today, many customers prefer to stay at home during weekends instead of going shopping due to the heavy traffic on the road and difficulties in finding parking spaces.

With the increasing alternative way of shopping such as internet shopping, home catalogue ordering and cable television shopping channels, customers are able to do their shopping at home. This has caused huge problems to retailers because it leads to lower sales figure in the store. In order to overcome this problem, retailers started to combine entertaining and shopping together to bring greater experience to customers. It has only started from the last two decades that many retail stores including department stores began to provide social experiences way beyond their sheer economic role.

Pine and Gilmore’s (1999) has developed the concept of ‘retail theatre’ which is creation of an experiential brand image, emphasising the experience customers can have surrounding the purchase, use or ownership of a good. Retail store settings are interesting places, and among other things, the varied arrangements of fittings and general architecture of the layouts, attract or repel consumers. Retailers have spent huge amount of budgets in the pursuit of improved multi-dimensional formats and design solutions, to attract customers into their stores.

To configure and manipulate the space within a supermarket is a huge responsibility to managers. This is a complex task because it involves careful consideration of relationships between categories on sale as well as on the impact that it produces on the consumer spatial behaviour and in store traffic. The older generation of grocery stores used the traditional approach to organise their store layout. The traditional approach consists in repeating the industrial logic implementation, which means putting products that share some functional characteristics or origins in the same area.

This method enables the customers to use store signs and paths to find the products they were looking for without difficulties. On the other hand, any change in the product location or store layout could result in disastrous effects on store performance (Borges, 2003). (Please refer to appendix 1 for information of shelf management) The traditional approach has been improved by the use of cross-elasticity. Retailers have changed some categories and put more use related items together.

However, this approach is company oriented and it fails to respond to the needs of the time pressured consumer. Some retailers have tried to move from this organization to something new, and were trying to become consumer oriented in their layout approach. A good example was Tesco which has rethought their store layout with i?? plan-o-gramsi?? to try to reflect local consumers needs (Shahidi, 2002). Other French retailers have used consumption universe layouts to make it easier for consumers to find their product in a more hedonic environment.