Merchandise is organised into groupings or classifications for the purpose of store layout and design. The creation of the various merchandise departments should be based on a logical plan that allows customers to locate desired items and make comparisons. Criteria used to divide merchandised by departments are:
• Function or usage – This includes sporting goods, kitchen appliances, home entertainment products etc.
• Customer purchase motive – Impulse items, Diet foods etc.
• Price points – Bargain, moderate, and better dresses.
• Vendor identification – Giorgio Armani, Gucci etc.
• Storage and display considerations – Frozen foods, dairy products, etc.
• Target Audience – Men’s, women’s and children’s clothing.
Allocation of Selling Space
When designing a store layout, it is important to have a clear analysis of the yearly sales and gross margin contributed by each merchandise grouping. Naturally, those with the highest return per square foot of selling space will have contributed the most to the business. Every retailer should plan on allocating space to also highly appealing. It is located in the primary (main) traffic aisles will receive more customer exposure and less in the secondary (other) aisles. A higher level of customer exposure will occur at the junction of two or more primary aisles. Certainly, the performance of any merchandise group will improve if it is moved to a prime location. However, do not waste valuable selling space by assigning it to merchandise that will not provide adequate gross margin dollars.