Dealing with the challenge of adding new products, clearing out losers and maximizing sales per square foot can be complicated. Bill Blake simplifies the tools, techniques and suggests a few tricks to help you master this process.
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Dealing with the challenge of adding new products, clearing out losers and maximizing sales per square foot.
Designing efficient spaces to merchandise furniture is becoming ‘curiouser and curiouser!’ We live in a world where McMansion's and 1000 sq. ft. storybook cottages coexist in many retail-trading areas. Our world contains populations that are diverse in age and stature; with shoppers seeking quality furnishings tailored to their specific needs for comfort.
If you are attentive to your customer’s needs for style, price, quality and value, you may also want to consider their special needs having to do with scale.
||Now You Are Ready To Roll Up Your Sleeves and start planning. The research you did in “step 2” to categorize products, styles and product lines will help you create an optimal product mix. Computerized accurate scale drawings are essential.|
Recently Bob, a retailer with a modest 5,000 sq. ft showroom sought advice on how to remerchandise his showroom to better address this issue.
He observed that some customers were asking for upholstered designs with shallower seat depths and lower seat heights. Others sought sturdy pieces with dimensions and construction qualities able to support larger family members in comfort and safety. In addition to these matters of personal scale, he was aware of difficulties in showcasing products appropriate for very large and very small living spaces.
Bob’s goal was to create a space that would showcase furniture for customers with special needs, but he had reservations. Could specialized departments accommodate furniture to fit people of extreme girth without offending them? Might an effective space be designed to house furniture for shorter people? By what process might he shepherd his idea from conception to reality?
The process for designing new spaces, renovating or refitting existing stores is the same for any project. A detailed description of effective space planning was presented in the April/May 2002 issue of FURNITURE WORLD (posted to the operations management index of www.furninfo.com).
Once you have a vision (see Larry Mullins’ article “35 Minute Vision” in the February March issue posted to the operations management index on www.furninfo.com), the challenge is to effectively and efficiently proceed from your present condition to your vision’s realization.
Let’s assume that just like Bob, you decide to re-adjust your merchandise mix to include more small-scale furniture for apartment living. What should you do first? How can you make decisions about how to re-merchandise the floor? What categories, styles or product lines will you want to get rid of? Will you need to do substantial renovation or just move or re-assemble product groupings, lighting and partitions?
First you need to collect some information to document current conditions at your store.
Step One - The Walkthrough: This is a visual tour of exterior and interior spaces. Use a checklist and snap photos. Take a critical look at exterior brightness, display windows, exterior signs, entrance doors, the entry, interior lighting, focal points, aisles, displays and non-selling areas such as receiving areas, bathrooms and customer service.
Step Two – Research: It is essential that sales and sales per square foot measurements be arranged by both product category and style. Ideally this data should be represented in spreadsheet form as well as in drawings based upon the sales performance of the different categories.
For example, if 20% of a store’s volume is in bedroom sets, then the drawing should reflect this information. Profit margins per category should also be considered to established correct mark-ups. In this research phase, you should also consider budget constraints as well as qualitative consideration such as current store (brand) image and your vision for the future.
One of the first things you should do is check for old or inaccurate structural drawings and re-measure and remake them if necessary.
Complete drawings should include showroom space as well as bathrooms and customer service areas. Ideally they should be arranged in layers including:
•An up to date structural drawing.
•Wall drawing showing cosmetic walls.
•Layer with isles and passage ways.
•Lighting layout including floor and ceiling outlets (track or high hats).
•Layer showing the delineation of departments.
•A Color drawing that includes walls, floors and carpeted areas.
•Slot drawing showing existing products to scale.
In addition to these basic tools, colored overlays that show placement of product by category, price point, manufacturer and style may help you to make the best decisions based upon your conceptual merchandising goals.
Once steps one and two are completed, you have information necessary to start planning.
Take a look at how previous design considerations may have reduced sales no matter how good your present product mix or market position seems to be.
Identify dark, poorly lit areas and ceilings. Lighting is always a primary factor in effective merchandising. Both overall lighting that casts a glow throughout the whole store as well as the illumination in special areas should be examined. You may find that the entire lighting system needs to be reworked or that additional track or hi-hat lighting to focus on special focal points should be installed.
Areas where products are too tightly spaced can be a big problem. Are tables and sofas stacked, shoved and wedged instead of showcased?
There is a simple test for an overcrowded store. If a baby stroller cannot be rolled through any isle or display area, you have a space problem. Some stores advertise their overstocked merchandise as a plus, but if you have a space crammed with merchandise that you can't see, it won’t get sold.
If your floor is overcrowded or you need to make room for new merchandise, decisions will have to be made to get rid of slow moving, low margin categories, styles, or price points.
Now you are ready to roll up your sleeves and start planning. The research you did in “step 2” to categorize products, styles and product lines by total sales and sales per square foot will help you create an optimal product mix. It is easy to try to replace product based on an existing floor plan and historical sales, but this isn’t the best way to maximize a store’s potential.
If you don’t know the exact dimensions of your retail space or don’t have a plan when you go to market, you may buy without a purpose. If there is a good deal on recliners, you may be tempted to buy, even if you don't have the space to show them. The result is that they will spend to much time ‘reclining’ in the warehouse.
Purposeless buying leaves retailers open to intimidation by sellers, to the acquisition of merchandise that doesn't fit into the store, to overstocked showrooms and merchandise that is expensively warehoused, and not sold.
The drawings will help you to avoid these difficulties by efficiently organizing the merchandise assortment. They will suggest colors for walls and carpeting and help to place walls where they are needed. Good drawings show merchandise in the proper scale.
You are now ready to take your assumptions about the number and sizes of products you plan to purchase and place them into a proportionally correct, efficient and effective sales floor presentation. The most effective tool to use is a slot-count drawing accompanied by a list of how many of each furniture or accessory product your floor can accommodate.
At this stage in the design process, be careful to check that templates and computer designed slot drawings accurately coincide with the different sizes of furniture manufactured in today's world.
The design process is a matter of recognizing and finding solutions to problems. If you plan to put oversized furniture on your floor, it is obvious that fewer pieces will fit. In these situations, showing less product will result in higher profitability.
Again, attention to the scale of the furnishings you plan to purchase or have already purchased is essential. In this new age of furniture merchandising, it is common for sofas to be 94" - where they used to be a standard 84". When producing a drawing that places new product, make sure that everything is to scale. If you underestimate the space each group will occupy by even six to twelve inches, you will end up with a serious crowding problem and waste time and money.
An initial floor plan may show that the master stock plan needs adjustment to prevent overcrowding and over buying. If you find that this is the case, instead of cutting out entire groups or reducing the number of vendors, you can consider limiting the assortment of pieces. Try removing loveseats or ottomans in product groupings. As long as you have a sofa, you need to have a chair. In overcrowded vignettes, the love seat should be the first to go. But, if you have a very limited space, consider just showing the loveseat, and get rid of everything else.
Your goal is not only to get the groups to fit on the floor but also to visualize how products will appear to customers as they walk through. By using more angles in the furniture layout, you can arrange a showroom so that it appears more spacious. Angles also help alleviate visual boredom caused by square furniture arranged in straight lines.
Once you have placed all the furniture in your slot count drawing, you can also pin down the number of lamps, floor plants and other accessories (including wall accessories) needed to create a complete store layout and purchase plan.
It is easy to place an attractive sign on a chair-and-a-half that says, “Ask Me Why I Can Support an Elephant" or on a small-scale recliner that reads "Special for Wee People." It is quite another matter to shop for and design a full department or store devoted to “Apartment Living,” “Grand Scale,” or “Heavy Duty Design.”
Product and space planning is not “business as usual” for most furniture retailers. Most go to market with an open to buy based on past sales, inventory counts and poorly defined impressions of future needs. Inefficiencies are accentuated by lack of communication among owners and buyers. The result is that space planners are often called in to solve overstocked situations caused by poor planning or opportunistic buying. This is a situation where retailers buy a whole bunch of “stuff” and then don’t know how to fit it on the floor.
You may want to bring in a talented store planner or coordinate the process in-house, but you don’t want to become a victim of poor planning.
A coordinated process is necessary for redesigning or remerchandising a whole store or just a single department with a concept that generates superior margins and turns.
Bill Blake is President of WRB Associates a space planning and design firm that creates and maintains retail environments that increase sales per sq. ft. and boosts merchandise turns. Questions can be sent to Bill care of FURNITURE WORLDat firstname.lastname@example.org.
Larry Mullins is a contributing editor for Furniture World and has 30+ years of experience on the front lines of furniture marketing. Larry’s mainstream executive experience, his creative work with promotion specialists, and mastery of advertising principles have established him as one of the foremost experts in furniture marketing. His affordable High-Impact programs produce legendary results for everything from cash raising events to profitable exit strategies. His newest books, THE METAVALUES BREAKTHROUGH and IMMATURE PEOPLE WITH POWER… How to Handle Them have recently been released by Morgan James Publishing. Joe Girard, “The World’s Greatest Salesman” said of this book: “If I had read Larry Mullins’ book when I started out, I would have reached the top much sooner than I did.” Larry is founder and CEO of UltraSales, Inc. and can be reached directly at 904.794.9212 or at Larrym@furninfo.com. See more articles by Larry at www.furninfo.com or www.ultrasales.com.
View all articles by Larry Mullins