Retail space management is composed of three major elements of macrospace planning, microspace planning and visual merchandising. Space optimization may be an additional element. Macrospace planning is the assignment of selling space for individual departments, categories and services in a physical store. Microspace planning is the assignment of specific products to fixtures and their resulting placement on shelving, pegs or other structures, based on a set of performance parameters. Visual merchandising is the process that ensures the physical display will not only achieve mathematical targets, but also appeal to consumers as they shop. In my most recent research Market Guide for Advanced Retail Space Management Applications I discuss the current and future trends and providers making change in the marketplace. Below is an excerpt outlining the maturity curve.
As retailers expand their efforts to cultivate customer-centric assortments using retail assortment management applications (RAMAs), the need to incorporate advanced analytics and automation to create more accurate macrospace and microspace plans for discrete clusters of stores is driving investments in new, more advanced applications. This provides better selections and greater in-stock levels for important items, while improving inventory turns.
Macrospace planning is rarely supported by applications other than Excel and AutoCAD and, as a result, represents a large market opportunity for vendors.
Gartner’s “Hype Cycle for Retail Technologies, 2016” includes a technology called intelligent virtual store design (two to five years to maturity) that uses scientific space-planning techniques, including system-generated recommendations, to enhance the effectiveness of store-specific spatial assignment of fixtures, services, categories and merchandise in a physical store. 3D visualization provides the ability to experience the plan from a customer perspective using virtual reality. This emerging technology is the next phase of space planning and, as shown in the figure below, provides the most benefit for the business, but comes at the end of a progression.