Summary Lecture 14 Notes

Lecture Overview

Learning Objectives

• Understand the concept of the retail servicescape.

• Assess the variables influencing the layout and design of retail servicescapes.

• Explore the online retail selling environment.

Retail Servicescape

• Definition: A servicescape is the physical setting where marketplace exchanges occur (Bitner, 1992).

• It begins as an empty shell and is designed to engage shoppers effectively.

Store Layout Decisions

• Layout decisions depend on product nature and aim to:

  • Generate shopper interest.

  • Provide guidance for navigation.

  • Facilitate a smooth shopping experience.

High-Draw Items

• Positioned in separate areas to draw consumers through the store.

• Typically displayed along the exit path.

• Examples: Bakery products, milk, Coca-Cola.

Location of High Impulse and Margin Items

• Placed in prominent areas to attract attention; typically near checkout.

• Examples: Chocolate, snacks, gum, and magazines.

The Power Aisle

• Central aisle where high-demand items, known as "power items," are located (e.g., milk, bananas, bread).

• Seasonal aisles and till aisles are also significant for product exposure.

End-Aisle Displays

• Use endcaps for promotional displays to enhance visibility and sales.

• Types: Front endcap (facing the entrance) and rear endcap (facing storage).

Store Mission Alignment

• The lead-off department's positioning should reflect the store's mission (e.g., fresh food focus).

Types of Store Layouts

• Grid Layout: Products are displayed in a straightforward manner, maximizing space for a utilitarian shopping experience. Common in discount retailers like Aldi.

• Free Form Layout: Encourages browsing and interaction with products; more suited for creating interest and complementarity.

• Racetrack (Loop) Layout: Manages customer flow and groups product categories to maximize exposure (e.g., IKEA).

Experiential Marketing and Atmospherics

• Connect customers with the brand through meaningful experiences engaging both rational and emotional aspects.

• Color, lighting, sound, smell, touch, and taste play significant roles in creating a compelling retail environment.

Online Selling Environment

• 7C Framework of Digital Retailing: Involves creating, capturing, communicating, and delivering online value.

• Online store design and layout must be user-centric, allowing for easy personalization and frequent updates.

Importance of User Experience (UX)

• Good UX differentiates brands, enhances conversions, and fosters loyalty. Poor UX can lead to lost revenue.

• Retailers should analyze customer feedback and engagement to refine the shopping experience across channels.

Purchase Funnel Metrics

• Bounce Rate: The percentage of visitors who quickly exit the site.

• Conversion Rate: The proportion of visitors completing desired actions, such as purchases.