Broad Street Licensing Group Food News

Are We Surprised? Store Architecture Determines Profitability

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Is it any surprise IKEA is one of the most-profitable retailers in the world?[1]

That’s because IKEA understands store architecture and layout, where the three most-important factors are accessibility, “intelligibility,” and the size of the visual field.

Given the crowded aisles of most supermarket chains, it’s a wonder anyone ever shops there at all, which perhaps explains the growing impact of c-stores and other alternative retail outlets where **** isn’t hanging off the shelves every few feet.

Placing “must have” items as far from the door as possible counters this problem by forcing consumers to traverse the entire footprint to get the items they want most.

Yet unless the shoppers purchase products, increased traffic doesn’t translate into profits. The London HQ of Harrods has twice as many shoppers on Saturdays as during the week, yet their sales are only 60% higher. And stores that make it harder to find what you want (lower “intelligibility”) may alienate shoppers. Still, IKEA’s profits are the highest of any chain because its chaotic layout results in 60% higher sales than shoppers intended.

Finally, stores that pile shelves with goods along narrow aisles make shoppers feel trapped, whereas IKEA has open, easy to see merchandising.



[1] Source: University College London professor Alan Penn.

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