What is retail space planning maturity?

Retail space planning is a vital process used by retailers to optimise the internal layout of their stores. When managed effectively, it can significantly boost profitability.

However, retailers across the world implement the retail space planning process in different ways. Some maximise the process while others have areas which need significant development.

Here at StoreSpace Insights, we deliver software which helps planners get the most from their physical retail space, making us an expert in the retail space planning process.

So, we’ve developed a model to help retailers identify their level of retail space planning maturity – and determine ways to improve their process

Retail space planning maturity is the determination of how sophisticated a retailer’s space planning process is and to what extent data and technology is used to optimal effect.

During the retail space planning process, physical property and equipment assets are aligned with research, buying data, brand positioning and product range. The aim is to optimise available space, leading to an improved shopping experience for customers.

A successful and informed retail planning process not only gives a retailer a competitive edge, but it can significantly boost profitability across a whole estate too.

Retailers across the world show varying degrees of sophistication within their store planning process, meaning they are at different maturity levels.

Here at StoreSpace®, we’ve used our many years of experience and expert knowledge of the retail space planning process to put together a retail space planning maturity model.

With four clearly defined stages, retailers can use the model to assess their existing level of retail space planning maturity and identify areas for improvement to create the optimal retail space planning process.

Level one: Establish

Retailers at level one of the retail space planning maturity model implement only the basics of both micro and macro space planning using a manual process.

Space planning begins with the products being sold. A retailer at level one has a defined range and assortment of products (micro space planning).

The retailer ensures all products purchased from suppliers are displayed on the shelf available for customers. Plus, they have sufficient stock of popular brands for replenishment to ensure regular repeat sales are secured.

Level one retailers also have an outline of a typical customer journey which ensures products are logically located near to each other (macro space planning). With an understanding of customers’ ‘shopping missions’, essential categories are displayed prominently to capture quick sales.

At this stage, the retailer uses an inefficient and ineffective manual process, implementing tools such as Excel, sketches, photos and marked-up AutoCAD plans. To move to the next stage, a retailer needs to standardise their approach for a more effective process, using a centralised and controlled method.

Level two: Develop

At level two, a retailer has a better understanding of both micro and macro space planning. They focus on developing and improving their principally manual process – and may even implement some technology to improve efficiency and inform decision-making.

For example, with sales figures, market information and location data, a planogram software package such as NielsenIQ’s Spaceman is used to guide a developing space planning retailer to decide on the optimal range and assortment for their stores.

A level two retailer also improves customer flow around a store. Using macro space planning technology – like our StoreSpace® software – a level two retailer has a broader understanding of which categories within the store are generating most revenue and which category space allocations can be modified in response.

As communication and efficiency is more important at this stage, there is some co-ordination between head office and stores, and technology is used to save planning teams’ time.

However, although there is an understanding of micro and macro space planning at this level, layouts tend to either be store specific (for small independent retailers) or estate wide – both of which are inefficient and less effective than they could be.

To successfully reach level three, retailers must move away from the ‘one size fits all’ approach to layouts in favour of a model store approach as a valuable space planning asset, enabling the retailer to build on existing performance insights.

Level Three: Analyse

At level three of retail space planning maturity, technology is used to improve co-ordination across whole estates and iron out inefficiencies, so the process can be simplified and optimised.

With an understanding of what good looks like in other stores – provided by software like StoreSpace® – a level three retailer is likely to have an ideal or ‘model’ store based on their highest performing store layout within any given store cluster, on which future store plans can be based.

With this model store approach – and heat-mapping functionalities – a level three retailer compares existing stores with a model store to identify opportunities for improvement.

Also, with proven successful layouts, the store planning process becomes quicker and simpler during refurbishment or expansion. The process is also expedited with analysis and comparison of performance across stores together with the ability to report on equipment and categories across the state.

At level three, a retailer has a fairly sophisticated retail space planning process. With utilisation of space planning software, the process is more efficient and decisions are informed by accurate data for greater success across a whole estate.

However, without micro and macro space planning integration, full retail space planning maturity is not achieved.

Level Four: Optimise

Level four retailers are at the most sophisticated level of retail space planning maturity and are able to optimise their decision making process.

They are making informed decisions using knowledge of both their planograms (micro space) and floor plans (macro space) so the whole retail space planning process is based on co-ordinated, accurate data.

This optimised process means the space planner can use planograms to directly plan the category space on the AutoCAD floor plans – and quickly and visually check all is correct.

Level four planning teams have strong two-way communication between head office and the stores, with digital access to all floor plans and planograms to enable in-store compliance, but also the ability to feedback questions and issues.

With dedicated software like our StoreSpace® platform and Nielsen’s Spaceman – which work together harmoniously – level four retailers are optimising their planning process to make their space work for them.

At this level, retailers have an efficient and effective process with optimised store space which boosts their profitability.

However, there is always room for improvement!

With an optimised planning process – which StoreSpace® can facilitate – underperforming stores can be quickly identified and improved for boosted profitability across a whole estate.

Here at StoreSpace Insights we help retail space planners make their space work harder for clients across a variety of sectors including Shell, Sainsbury, Primark, M&S, Apotek Hjartat (Sweden) and Grupo Merza (Mexico).

With our innovative StoreSpace® software, we assist retailers across the world with their planning process, helping to boost efficiency and profitability.

If you’re looking to improve your retail space planning maturity – or get advice on how to optimise your physical store space – our expert team are on hand to help.

Get in touch today to find out more.