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.

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