Strategic Store Layout

Ask yourself what attracts you to your favorite retail store? Is it the choice of products? The level of customer service? Or the functionality of the space? Today’s liquor stores often lack the store design ‘wow’ factors that improve consumers’ shopping experience. From cluttered displays to confusing traffic flow, many stores leave store layout and design at the proverbial front door.

But as the liquor retail market becomes ever more competitive, the winners in today’s economy will be the ones who go beyond service to deliver a satisfying shopping experience. A key way to do that is through innovative store design.

 

Best Practices

When designing a layout for a store, state-owned or independent, there are numerous factors to consider. Gordon Heins, product merchandising specialist for the New Hampshire Liquor Commission, says he wants store layouts to be both consumer friendly and efficient to encourage customers to shop the entire store, and of course, to return again.

“With the ability these days for consumers to purchase most things through the Internet, design concepts become more and more significant to retail establishments,” Heins says. “Our goal in every design is to create an enhanced customer experience to earn our customers’ loyalty. We do this through easily navigated layouts, great display presentations, outstanding selections and prices, good lighting, information gateways and well-organized layouts.”

The New Hampshire Liquor Commission creates unimpeded lanes for easy access to all parts of the store. Shelving is both practical and efficient, holding enough products to keep up with the demand.

“We also realize that more shoppers have a timeline. To make the most of that, we place popular categories, such as vodka, near the rear of the store to promote impulse sales throughout the store,” Heins says. “We also like our stores to be well lit throughout, with specialty lighting in areas to which we want to draw more attention.”

Technology also plays a role in product placement on shelves, as New Hampshire Liquor Commission analysts use programs that sort through a plethora of data to determine the needs of space and placement for each product. Initial store layouts become paramount in creating the needed space to meet store sales projections and goals.

Heins says they also include as many registers as possible to move customers though with their purchases quickly.

“We also create a ‘power aisle’ in the middle of the stores, which is really the ‘pulse’ of the store,” Heins says. “This area is for large, impactful displays, where we showcase our very best deals of the month. Also, clearly visible product category signage is always important to aid the customers in finding what they are looking for easily.”

 

Making Your Space Work for You

Designing a store layout must take in all factors of the store’s future operation. As Heins explains, a clear goal in store layout, including renovation projects, with reasons for renovation—such as product expansion, more square footage, consumer demands—should be paramount.

Careful thought also must go into the balance of retail space versus storage areas. “Inadequate storage will affect the bottom line of profits if you cannot meet the supply and demands of customers,” Heins says. “Also, once customers have finished their shopping, they want to proceed quickly through the checkouts. It’s very important to have ample, well-placed registers in your design to meet the expectations of your consumer traffic and sales.”

The choice of shelving and presentation of products is also very important to the success of your store. Brian Rosen, adult beverage strategist, stresses that shelving should adequately hold the amount of products you would like to have in the store.

“The average stores has crowded shelf space,” Rosen says. “You need to set shelves in according to brand development. As artisanal, hyperlocal items become increasingly popular, you need to configure your shelves to represent those goods. When consumers enter a store, they typically move to the right. Pay attention to the traffic flow and look for dead spaces. And remember, the highest margin goods sell more at the front of the store.”

There also many schools of thought on how to display products in a retail environment. For instance, setting wines by varietal, alphabetically or by country all have their pros and cons.

“It’s up to the marketing team to determine the best projected system for a store,” Heins says. “We set our wines by country and then by varietal. We feel this method works well for our customers who may not have the knowledge of specific producers while also delineating sections from all around the world so they can be explored fully.”

Lighting and flooring are very important, as well as ceiling height and colors, which can play an important role in the “atmosphere” of the store for the customer.

 

From the Ground Up

So what if you plan on renovating your stores to improve store layout? Nicholas Ketter, product director at Alabama Alcoholic Beverage Control (ABC), warns that renovation projects to improve store design can quickly become a nightmare if specifications are not outlined clearly before construction.

“Chains tend to build the same concept over and over, reinforcing that image into the consumers’ thought process,” Ketter says. “The outlet wants the consumer to feel at home and know that when they walk into any of their stores that the consumer has a better than average chance of knowing how to navigate the store. Dramatic change that is too slow in implementation can bring about a fractured ‘to market’ approach leaving the consumer wondering if the new look is a new chain — leading to decreased sales and profits.”

Many retailers include branding as one of their primary focus when establishing a strong store design, because a strong brand is easily identifiable to the consumer. The Virginia Department of Alcoholic Beverage Control (ABC) is incorporating “branding” into its store design. As part of this effort, the agency has mined customer surveys and interviews, as well as focus groups, for its store layout and design cues.

Over the past year, Virginia ABC has opened three premier stores around the state. The agency will open a fourth premier store location just west of Richmond this summer.

“These stores incorporate innovative retail space planning techniques, energy efficient LED lighting, a permanent tasting area, fine cabinetry, distinctive wall treatments and product displays,” says Becky Gettings, director of communications at Virginia ABC.

The new stores also feature a design theme reflective 
of the unique characteristics of each of the store’s locations. In Williamsburg, for example, a reproduction vintage 
copper still is evocative of Virginia’s history of moonshine production.

“The still appears to have had its own impact on sales at the premier store, which experienced a nearly 50 percent boost in licensed moonshine revenues in its first three months over the same period the previous year,” Gettings says. “And when we compared the store’s performance in the ten months since its transformation as a premier store to the previous ten months of business as a standard ABC store, the store realized more than $2.4 million in total sales, an increase of almost 14 percent operating as a premier store.

In Leesburg, after just three months of operation as a premier store, sales are also up more than six percent over the three months prior. And the Williamsburg premier store earned an Interior Design Excellence Award (IDEA) from the International Interior Design Association.

Virginia ABC has begun experimenting with floor plans that incorporate wide directive aisles to allow for increased traffic and carved out smaller compartmentalized sections along the aisles. The goal is to provide a more intimate and interesting shopping experience while keeping it easy to navigate.

“Our design goal is to draw the customer into the store and encourage browsing and exploration of products, lengthening shopping time,” Gettings says. “As tastings have become increasingly popular, we have also begun incorporating permanent tasting areas in new stores, which can be alternately used as display space.”

Lighting has evolved as well, moving from harsh fluorescent fixtures to environmentally and economically friendly LED lighting that improves the shopping experience without sacrificing security.

“Designs that tie the store to the community through displays and clustering of products reflected in buying trends specific to each store are proving successful. The stores must strive to reflect the tastes of the communities each serves,” Gettings says.

 

Technology’s Role

Technology is making inroads 
in today’s store layouts. 
As such, retailers need to keep up 
with and embrace technological 
innovations in order to stay current 
with customers.

“Why are we retailers in business in the first place? It is purely to serve our customers — and we feel privileged to do so,” Heins says. “But, to be at our best, we must look for every technological edge we can afford to offer — in our case as a state-run business.”

When dealing with technological innovations within the retailer environment, New Hampshire Liquor Commission looks at technology from several standpoints. They want to move customers through the checkouts as fast and efficiently as possible. Therefore, it is imperative to speed that process any way they can.

Technology also has given retailers instruments to 
help them achieve quicker and more accurate store inventories.

“From a customer service standpoint, in our newest projects we have created iPad kiosks that link to our web site,” Heins says. “This enables customers to look up products, see what’s on sale and we can offer a tremendous amount of helpful information.”

Heins says technology has given New Hampshire Liquor Commission the ability to better connect to customers via “email alerts.” For those that participate, Heins and his team can now track sales preferences, shopping history, sales effectiveness and peak traffic hours to better help management staff their stores adequately.

“The technical data analysis of consumer trends, demographics and specific product trends plays a very important role in our layout and design,” Heins says.

While the majority of 
Virginia ABC’s 351 stores represent 
traditional brick-and-mortar 
retail operations, they have 
successfully implemented a number of new technology-driven initiatives to improve the retail experience for their customers.

As Gettings explains, they have expanded their social media presence with a marketing-specific Facebook page, “Spirited Virginia,” which connects consumers with cocktail recipes and entertaining ideas on Virginia ABC’s newly redesigned website. The new, mobile-friendly website also enables online ordering and provides directions to store locations, product selection and information.

“This is all designed to provide the customer with ready access to products, information and options,” Gettings says. “Customers will see themes introduced in Virginia 
ABC social media sites reflected in store displays. In addition, we have explored various types of interactive media for the stores.”

The premier store in Leesburg has a wide-screen TV with scrolling displays of distilled spirits advertising and ABC messaging. The agency is testing this for application in future store designs. Finally, full state rollout of an upgraded point-of-sale system will conclude on June 30, 2015.

“The new system provides secure end-to-end electronic fund transfers and new mobile devices, utilizing VeriFone sleds with scanning capability and an Apple iPod Touch for the mobile application functionality,” Gettings says. “The upgrade also offers enhancements to the stores’ physical inventory verification. Additionally, customer signatures will not be required for any credit purchase of twenty-five dollars or less.”

 

Security Issues

Store layout and security go hand-in-hand, and liquor retailers are joining the throngs of businesses that have security and loss prevention at the top of their “improvements list.” Within store design, installing cameras and other security devices illustrates the growing determination of retailers to address employee and customer safety concerns.

Ketter says security is a great concern in designing any retail store, regardless of the products being sold. Since liquor is considered a controlled substance, Alabama ABC strives to make sure that their retail locations have the best in monitoring equipment, cameras and recording software.

“Open lines of sight, limiting blind spots, keeping small sizes behind the counters and installing lock boxes on extremely high priced goods are all good business practices to consider, but the best security measure is a sharp-eyed employee,” Ketter says.

The NHLC once had offices in the back of stores outside of the retail space but now realizes the placement of its office is imperative to security. On all new projects, offices are placed at the front of stores, which elevates them to give management a clear view of the entire floor. The office door is always kept locked and security cameras placed throughout the store are connected to the mainframe in a locked area.

Product theft, unfortunately, is also certainly an issue that requires attention when designing stores. Heins and his team are very conscious of entry and exit locations and the placement of their registers when designing a layout. They place high-risk products in visible areas and some products, such as miniatures, are placed near the registers, where cashiers can see them clearly without visual barriers.

“We generally lock up products that are over a hundred dollars,” Heins says. “We have locked glass display cases that we place strategically in high traffic areas to promote the sales of these items and to control any theft. We are also looking into smaller locked glass boxes that will retrofit within each varietal or categorical section.”

1 Comment

  1. Tod Reply

    I have owned a old liquor store for about a year. It is located in northeast Georgia. I am interested in renovating the store, and would like to hire a consultant for recommendations only.
    Who can provide this service?

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