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Darren Gilbert Nov 10, 2022 3:02:57 PM 5 min read

3 Reasons Why Retail Space Management Matters

Why Retail Space Management Matters

As a practice - retail space management - the efficient control of your retail space - is crucial to master. That said, managing this area isn't always simple since there are many factors to consider. And don't forget the immediate repercussions if you fail. Manage your space poorly*, and your store will suffer financially.

Quote on Retail Space Management

 

As for it the importance of managing your floor space, you only need to consider the fact that you pay per square metre for the shop space you rent. It would thus be in your best interest to manage it properly and ensure maximum financial return on the area you occupy.

As a side note, once you understand how you are using your store space, you can take the actions necessary to ensure you manage it appropriately. That includes strengthening any areas lacking and tending to any gaps or mistakes you might have made.

But why does it matter that you have proper control of your retail store space?

You Can Satisfy Shopper Needs and Prevent Customer Confusion

It matters because you can satisfy shopper needs and prevent customer confusion

As we’ve mentioned on this very blog in other articles - one on developing a winning category strategy and another on exceeding customer expectations - pleasing your customer is of the utmost importance. 

Of course, it’s tough to achieve that goal. At times it’s almost impossible. Fortunately, your task becomes easier when you understand your retail space and how to use it best.

 

Do you want to please your customers and maximise your sales? Why not speak to us? Book a complimentary consultation with a DotActiv expert and we show you how.

 

Let us explain.

Your customers come to your stores with a list of items they need. Upon entering your store, they expect to find those items. More importantly, they're expecting no issues. To help them, you should provide them with a shopping experience that is as frustration-free as possible. 

In fact, you should make it so easy your customers don’t have to think twice about what they're doing. 

Of course, that won't happen if you don’t understand the importance of retail space management or have proper control over your space.

For example, a logical category and product flow will meet shoppers' expectations and help them to find what they need.

However, by not managing your store space appropriately, what could end up happening is you begin placing your categories wherever there is space. That makes it appear that there is no thought or strategy behind any action you take.

The consequences of that are two-fold:

 

  • Frustrated and confused shoppers since many navigate your stores by associating categories expecting to find similar items in close proximity to each other; and
  • Lost sales and a ruined reputation.

For both consequences, you can expect more shoppers to refuse to return to shop in your stores.

You Can Maximise The Sales Potential Of Your Retail Store

It matters because you can maximise the sales potential of your retail space

Only once you know how much space is available in your store can you begin planning how to use it. You can figure out your store layout and where to place categories. More importantly, you can look at ways to maximise your sales potential.

To do that - maximising your sales potential - you apportion the correct amount of space to each of your categories. Of course, if you don’t understand your retail space first or how much is available, you’ll soon find yourself struggling as you place your categories around your stores.

Retailers Enjoy Increased Sales When They Manage Their Store Space Appropriately

Let’s say you're an FMCG retailer with 50 categories that you want to place in your stores. By not knowing how much space you have to play with, you’ll soon run out of space. That means you'll need to compromise and, as a result, can’t give each category the space it deserves.

That leads to consequences:

 

  • A loss in potential sales

It becomes even more problematic if you need to give a high-yielding category less space. Also, since the cost of shelf space is at a premium, the last thing you’d want to do is pack a shelf with low-yielding products.

  • Ending up with too much or too little stock

By not managing your store space appropriately, you could order too much or too little stock. It happens. You might look at a similar store in a similar region, assume the space is the same, and then set out and order products accordingly, only to find you’ve made a gross miscalculation.

 

That means that instead of pumping money into improving your store to maximise sales, you could find your capital tied up in inventory you can’t use.

You Can Reduce Floor Congestion During Peak Shopping Hours

It matters because you can reduce floor congestion during peak shopping hours

When it comes to the management of your retail space, you need to talk about your store layout. That’s because it’s more crucial to the overall performance of your stores than you may think.

That said, it’s worth pointing out that you can’t simply pick a layout and expect it to work for you. You need to:

 

  • Consider your available space, 
  • Understand how your customers shop the categories you stock; and
  • Match everything to an appropriate store layout.

 

You can read this piece to find out which store layout suits your retail business best if you’re unsure.

More than that, in understanding your retail space, and in choosing a store layout that matches your store, you have a better chance at reducing floor congestion.

In reality, you’ll struggle to combat floor congestion if you don’t understand your space. And that’s not just confined to peak shopping hours. It’ll happen throughout the day.

 

[Free Ebook] Looking for specialist software that can help you manage your store space effective? Download your free copy of the Financial and Practical Benefits of using DotActiv’s category management software.

 

Just imagine what your store would look like (and what it would be like to shop) if it was always overcrowded. It would be chaotic. And that’s even before you consider that you’d need to restock your shelves while your customers crowd around your shelves.

That said, there is another benefit to proper retail space management. You’ll know where your high-trafficked categories are so that you can spread them out. Floor planning software with a heatmapping capability can help you find those categories sooner rather than later.

Multiple People Enjoying Shopping In A Store

Conclusion

Managing your retail space isn't so much a suggestion as it's a recommendation. When done effectively and efficiently, you can know that you're in the best position to capitalise. And that doesn't only mean good things for you. It also means good things for your customers. In short, everybody wins.

Are you interested in a category management solution that can help you entice customers into your store and keep them returning? Why not book a custom exploratory consultation with a DotActiv expert here and we can show you how. You can also browse through our various software and services on our online store here.

*This article was updated on 10 November 2022.

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Darren Gilbert

With over 10 years of writing and marketing experience, Darren joined DotActiv in 2017 as a content writer where he was responsible for producing blogs, Ebooks and more. He has since worked himself up to the role of content manager, where he oversees all and any content produced by the company. He has a Bachelor of Arts in International Studies from the University of Stellenbosch.