A retail ‘C’ change: Customer-centric space planning

Building and sustaining an impactful store layout strategy requires integrated capabilities

Best-in-class retailers have invested in technology, advanced analytics, and operating constructs that drive intelligent, holistic space decisions with speed and precision. These assets are designed and streamlined to drive macro to micro space decisions considering current and future consumer needs. The latest technologies, including 3D augmented reality/virtual reality (AR/VR), allow rapidly prototyping, testing, and management of retail store plans to deliver consumer-oriented layouts down to a granular level while replicating efficiently at scale.

Advances in retail space planning technology also allow for more localization and personalization in store layout design and visual merchandising, as well as new ways of working to execute these decisions. Retailers can now manage retail space planning strategic decisions centrally and leverage outsourced talent pools to scale these decisions to micro store and planogram levels. This enables cost-efficiency and supports internal operations’ focus on more strategic decisions. Retailers who effectively pull all available retail space planning levers will outperform their competitors. Where do you stand?

Key space-planning tools and techniques

• Macro space analytics: Analysis of the broader store layout to optimize and plan space allocated at the category level, placement of departments, traffic flow, and adjacencies
• Micro space analytics: Analysis of product data and sales to plan the positioning of products on the shelves of planograms
• Oriented localization: Process of curating products based on the preferences of customers in a defined geographical location (e.g., a city, a district, a state)
• Earned space strategy: Designing product assortment and allocation based on the ability of a product or vendor to meet certain business metric goals
• Store clustering tools: Used to group stores with similar demand patterns, customer preferences, and other performance dimensions (e.g., sales and basket metrics, customer profiles)
• Optimization capabilities: Process of allocating the optimal amount of space of departments, categories, and products to stores based on customer demand and store performance
• Space automation: Software that utilizes automation and/or artificial intelligence to create and organize space into planograms or floor plans
• 3D AR/VR: Enables digital re-creation of store and shelf layouts virtually in three dimensions
• Space as a service: Having space planning, floor planning, and assortment planning services conducted and managed by a third party
• Supporting data services: Leveraging outsourced and syndicated data services to support space application and analytics foundational data (e.g., product attributes, customer demo, space-ready images)

Take our quiz below to learn your retail space planning current status and see what you’ll need to do to reach your goals.

What’s next?

Efficient, customer-centric, and intelligent macro and micro space planning is not a new concept, but the complexity of the transition has prevented many retailers from doing it well. A clear playbook defining your current and future state, including people, processes, technology, and data, is essential to assess the magnitude of the transition and its value to the business. We recommend starting with a plan.

Deloitte has one of the largest merchandising consulting practices in the United States. Our work includes long-term business transformations, change management and upskilling, technology modernization, and insights and operation services. We’ve developed a wide range of assets and resources to support transformation success and sustainability. These can be leveraged as a starting point to accelerate system architecture, business process, and operations. These can be further customized to the unique aspects of your business, competitive landscape, and budget. How can we help you achieve your customer-centric space planning goals?

Get in touch

Brian McCarthy Principal Deloitte Consulting brimccarthy@deloitte.com	Brian Baker Managing Director Deloitte Consulting brianbaker@deloitte.com	Ryan Blask Managing Director Deloitte Consulting ryblask@deloitte.com	Matt Adams Principal Deloitte Consulting matadams@deloitte.com

The authors would like to thank Lauren Stevens, Alecia Reed, and Scott Hartman for their contributions to this piece.