Reimagining space planning from a customer’s perspective

Author: Suhas AV

In a dynamic macro environment, an already dynamic retail world has been aggressively transforming over the past few years. Customer has always been the ‘king’, but how the wants and needs of the King has evolved is interesting to note. Retail experts and Gurus will vouch to how while the e-commerce industry is appearing to outgrow the brick- and -mortar stores, physical stores still continue to contribute to the majority of the company’s revenue. The role of the stores in the future would be that of experience centres to provide inspiration and personalized services to the customers.

And to do this effectively, Organizations will need to take a data driven approach to decision making, to make every inch of retail space count and to ensure both science and art of retail design is weighed together. We will need to look at

  • What is right for Customers – Product & In-store experience to create value for our customer
  • What is right for Stores – Improved operational efficiency
  • What is right for Retailer – Increased sales (top & bottom line)

Our Lowe’s portfolio spans across 2 countries(US & Canada) and 2200+ stores of various formats. At any given point, the store houses an average of 40,000 products across various categories. As customer preferences vary depending on individuals’ lifestyle & several external factors, localized assortment, tailored space & efficient display become crucial to meet the needs. This is where our space planning teams enable business strategy in the stores.

This team as a supporting function helps run an efficient store layout to sell the products and this is done through data driven decision making. Leveraging insights out of data collected from our customers, stores and market research, we set roles & intents for each category and devise the strategy to go forward.

Space recommendations are based on scientific outputs of market basket analysis, customer decision tree, sales productivity and sales-based availability to optimize our sales area. Floor plans are drawn, and product flow decided to optimize every square foot of space while keeping in mind the customer shopping pattern. Planograms are designed and shelves are then merchandised keeping Sales, Margin and item productivity at the center of decision making. Product capacity on shelf is defined based on daily sales and replenishment routines. We also drive localization through store specific assortment and design decision making.

Cross Merchandising allows to create nodes and inspiration points throughout the stores in a manner that provides holistic view of possibilities to our customers thus selling a project rather than a product each time. Examples can be modular kitchen or aesthetic bathrooms. Visual appeal creates an urge in customers to imbibe the space they’re in. This important aspect of retail ensures maximum value per square footage to the customer and utmost sales per square footage to the retailer.

To sum it up, today more than ever businesses need to stay agile and pivot as and when the market and customer needs evolve.

About the author:

Suhas A V is a Senior Manager – Store Environment for Space Planning managing Building Products area of Business at Lowe’s India. Suhas has 11 years of retail experience delivering bespoke decision support analysis, Product development, Simplification & Transformation projects in the field of Space Planning, Merchandising, Supply chain & Site research. He has been enabler of business decisions through insights & advance analytical solutions. He says – I thrive most when I work in teams and get the most satisfaction when working on a business critical or new situation, or challenge.