Organising the space available in a retail store is associated with profitability. Studies have been commissioned to better understand what layouts are more likely to encourage spending. The size of the sales floor in relation to the stockroom is important.
Retail space is divided into areas used to display products for sale and non-selling areas necessary for the functionality of the store, such as stockroom, aisles and staircases. The ideal ratio is a majority selling area, such as 60 per cent of the store, while the stockroom is only 20 per cent to 30 per cent of the store, depending on other unusable sales space.
The selling area is the most important part of the store. Great care should be taken to organise the store based on the shopping experience and to promote upsells. How you use the space will be decided by the size of your products and the nature of the experience customers need with the product before they buy.
Unlike employee turnover, inventory turnover is a term in which all retailers want to enjoy the highest numbers. High turnover means more products are moving out the door than sitting on storeroom shelves. Based on the average inventory level and daily sales figures, retailers should determine the critical level of inventory they need in the storage room to operate effectively.
The storage space can be overloaded. Organise your raw inventory and packaged goods as not to be tempted to reduce the retail space. Reduce aisle size, use stackable pallets, utilise overhead space and organising bins to get better use out of the space.