Retail Spatial Optimisation#
Week 7 — The Floor Plan#
Photo: Kgbo, CC BY-SA 4.0, via Wikimedia Commons.
Where we left off#
- Six weeks pricing the product: cost, packaging, tax, elasticity
- not one of them asked where the product physically sits
- basket composition shifts with placement even when price does not
- this week: the room itself as a variable
Layout is not decoration and it is not tradition. Outlets converge on a small number of plans because those plans measurably outperform, and the convergence is evidence rather than imitation.
— Floor-Plan Determinants of Liquor Outlet Throughput (Journal of Retail Geography, 2017)
Learning objectives#
By the end of this lecture you should be able to:
- name the three floor-plan variables the reading fits
- explain why elastic categories sit near the entrance
- say where low-margin stock is placed, and why
- account for layout in a purchasing strategy, not only price
Three measurable variables#
- distance from entrance — how far a shopper walks to reach it
- aisle width — how long they are willing to linger there
- sightline length — what they can see before deciding to walk
All three are things you can pace out with no access to the retailer’s data at all. Week 7’s lab does exactly that.
What goes where#
| Position | Typical stock | Why |
|---|---|---|
| Entrance-adjacent | high-elasticity RTDs | impulse throughput is highest here |
| Mid-floor | branded beer, mid-shelf wine | steady, planned purchases |
| Back wall / low-traffic aisle | cask wine | lowest margin per shelf metre |
Week 5 identified which categories are elastic. This is where that elasticity is cashed in.
The best index in the shop is the longest walk#
The shopper’s side of it#
- the best price per standard drink is deliberately not convenient
- convenience is therefore a cost, paid in index rather than in dollars
- a shopper who does not walk pays it without ever seeing a price change
- and the floor plan, not the product, sets the size of that payment
Why a strategy must account for it#
A purchasing plan built on price alone will:
- consistently underestimate the friction of buying the best ratio
- overweight whatever happens to be near the door
- fail at event scale, where quantity makes the walk matter more
The Event Portfolio has to survive being actually carried out.
Common errors#
- treating placement as a retailer’s aesthetic preference
- assuming the most visible stock is the best-selling stock
- measuring distance in metres but forgetting the queue and the trolley
- generalising one outlet’s plan to the chain without checking a second
Where this connects#
- week 8 examines the display built at the short-distance position
- the week 7 lab is fieldwork: map one outlet, measure two walks
- the Event Portfolio needs an inventory that is buyable, not just optimal on paper
Next week#
The display itself — and what it is arguing for.