Space Use Is Crucial to Sales

ime is money” is a well-worn phrase. In retailing, space is money. The effectiveness of space — whether floor, shelf or wall — can make or break your return on investment. After inventory and labor, the cost of space is generally a retailer’s largest recurring investment.

All space should be put to its highest and best use to maximize its return. To the extent that a retailer can extend the space occupied, while not sacrificing the attractiveness and allure of inventory, return is improved. The use of space in conjunction with the selection and placement of inventory is “merchandising” — a mixture of “art” and “science.” The “science” of merchandising is a matter of analyzing gross profit percentages, inventory movement and turnover, space-to-sales ratios, trend reports, etc. The “art” is in placement and arrangement of inventory within space so as to attract a customer’s attention and encourage and facilitate the purchase.

Outward Appearances

Some studies find that nearly two-thirds of all retail purchases are made on impulse. This leads to the presumption that the decision to enter a retail establishment is just as impulsive. What generates such an im-pulse? Storefront windows are the equivalent of billboard advertising. Bob Silberberg, owner of The Clay Pot in Brooklyn, says that similar to an artist’s booth at a show, a retail storefront has only a matter of seconds to attract a potential buyer.

Watch Traffic Patterns

In almost every location, patterns develop where pedestrian traffic tends to be greater in one direction than another along a sidewalk. It may be the result of the conjunction of parking, crosswalks or neighboring businesses. Watching traffic over time will reveal these patterns and, once determined, window displays should be oriented to take advantage of these tendencies and make it
easier for your next customer to appreciate your offerings.

The downside of windows is that, once a customer enters, attention turns to merchandise that is easier to access and equally well displayed. Once inside, product in the window is generally oriented away from customer view, often difficult to retrieve and customers may be reluctant to ask you to disturb the display. Where possible, try to make your window displays reversible, 360 degrees and shallow enough to allow retrieval or have them recur within the store.

At Seldom Seen Gallery, owner Don Gorenberg uses merchandising techniques to encourage customers to slow down and look at items as soon as they enter the gallery.

Slow Down, You Move Too Fast

Regardless of whether your style is an emporium —“stack it high and watch it fly” — or museum-like, there is value to open space. One area of space that may generate a greater return if left vacant is right inside the door. In “Why We Buy: The Science of Shopping” (Simon & Schuster), retail guru Paco Underhill speaks of the necessity of a “transition zone” — that area just over the threshold that encourages the customer to slow down from the fast-paced sidewalk to a slower stride, allowing more careful attention to the treasures displayed within. There is a direct correlation between time in a retail store and sales. Store layout should be designed to encourage longer stays.

Depending on individual circumstances, the size of this initial area will vary. In some cases, as much as 10 to 15 feet might be set aside for transition. Possibilities include a piece acquired to be a “show-stopper,” seasonal displays that demand attention because of sheer size or color, or a piece requiring time to examine.

At Seldom Seen Gallery in Fort Lauderdale, Fla., owner Don Gorenberg has hung a very popular throw with an inspirational message woven into it that brings customers to a full stop to read.

Once slowed, or stopped, most customers will be inclined to start their adventure by moving to their right. Knowing this, the first display area to the right should be reserved for that merchandise that is likely to impress and encourage further investigation. The goal is to generate sales or at least draw the customer deeper into the store. The deeper a customer is drawn into your space, the more of your offerings they will experience.

Give Aisles Some Space Of Their Own

The amount of space allotted to aisles obviously affects gross area available for merchandise display. But accessibility and customer comfort impact time of stay and are therefore reflected in sales. Underhill has found numerous occasions in his clients’ stores where important displays were too crowded and the space around them too tight. The setup caused customers to feel uncomfortable, for fear of knocking something over or jostling the merchandise. As a result, sales from those displays suffered. Jewelry counters are especially vulnerable to the negative impact of tight spacing.

Similar Underhill studies cited the value of “dwell” zones, store areas out of the flow of traffic that allow a customer more time and space to consider the merchandise, perhaps more expensive, on display.

Squares Into Cubes

The value of space should be measured, both horizontally and vertically, in cubic measurements. Arguably, customers do not really see inventory, or anything else for that matter, displayed below 18 inches from the floor or above six feet.

Obviously, anything placed at eye level should hold the most value and the best opportunity for the greatest return on investment. As you deviate from eye level the value of the display space may decline but still has value, and for some types of merchandise, becomes more desirable.

Lower levels of display are best suited to merchandise whose strength is interior design and best viewed from above. Conversely, work strong in external decoration is best appreciated when displayed at eye level and above.

But David Brooks, owner of Appalachian Spring, with four locations in and around Washington D.C., has found a way to place value on lower levels by utilizing this space for storage and “creative understocking.” Functional ceramics provide a great opportunity for understocking. Save space by displaying a representation of the glazes and type of pieces available at the most appealing level while understocking other pieces on a less desirable plane.

Gorenberg utilizes his gallery’s space above six feet in an effort to create a “wow” affect. The area over aisles is festooned with mobiles.

Don’t Overdevelop Your Space

There is fine line between utilizing space to achieve the highest return and “over developing” an area so that it looks crowded. Displaying work on furniture that is for sale can be beneficial as it often helps the customer visualize how the furniture will look in their home. But overloading the piece will block or obscure design features that assist in making the sale. The piece of furniture might disappear entirely.

Often, inexpensive jewelry generates an excellent return displayed on top of jewelry cases. However, how many gross profit dollars are lost when customers can’t easily examine the often finer, more expensive pieces kept under the glass? Inventory display should complement the display and sale of other inventory.

This column is submitted from the Education Committee of the Craft Retailers Association for Tomorrow (CRAFT), Donna Milstein, Hanson Galleries, Houston, Texas, chairperson. CRAFT is a not-for-profit trade association of retailers of American craft. For more information about CRAFT, its mission, programs and membership, please visit www.craftonline.org.