Retail store layout optimization for maximum product visibility

Abstract

It is well-established that increased product visibility to shoppers leads to higher sales for retailers. In this study, we propose an optimization methodology which assigns product categories and subcategories to store locations and sublocations to maximize the overall visibility of products to shoppers. The methodology is hierarchically developed to meet strategic and tactical layout planning needs of brick-and-mortar retailers. Layouts in both levels of planning are optimized considering eligibility requirements and complete set of shopper paths, thus, they successfully capture the unique shopping behaviour of consumers in a store’s region. The resulting mathematical optimization problem is recognized as a special instance of the well-known Quadratic Assignment Problem, which is considered computationally as one of the hardest optimization problems. We adopt a linearization technique and demonstrate via a real-world numerical example that our linearized optimization models substantially improve the store layout, hence, can be used in practical applications as a vital decision support model for store layout planning.

Keywords:

• Retail layout optimization
• product visibility
• shopper path
• shelf location
• quadratic assignment problem
• linearization

Acknowledgments

We sincerely thank the helpful feedback from the editor, associate editor, and two anonymous referees, that helped significantly improve the clarity, presentation and quality of this article.

Disclosure statement

No potential conflict of interest was reported by the authors.