How does supply chain digitalization influence layout strategies?

In retail merchandising, the layout of a store plays a vital role in guiding customers through the store in a manner that maximizes exposure to a wide range of products. Effective layout strategies optimize the use of available space (Wamuyu, Ratemo & Mwai 2023:3), allowing retailers to display more products without making the store feel cluttered. This customer flow in terms of product placement and product visibility leads to enhanced customer engagement and optimised sales which will ultimately result increased revenue and sustainability (Gul, Lim & Xu 2023). Effective merchandising, specifically product placement optimisation through category management, hinges on data-driven decision-making enabled by supply chain digitalisation. The changing business environment necessitated by Covid significantly impacted retailers in that consumers seek omnichannel retail experiences which can be effectively managed by digitising supply chains beyond merely sales and distribution channels towards a marketing-operations interface (Ishfaq, Darby & Gibson, 2023; Bijmolt, Broekhuis, de Leeuw et al 2021). The impact of an integrated marketing-operations perspective on retail layout strategies is such that stores would need to allocate more space near the front for digital order fulfilment to ensure quick pick-up and dispatch without disrupting regular shopper flow. These zones would be optimized for speed and efficiency, minimizing time spent fulfilling online orders. According to Ishfaq, Darby & Gibson (2023:4), an “omnichannel requires firms to reorient how activities and processes are organized and sequenced to fulfil customer needs”. In this instance, retailers share real-time point of sale and ecommerce data (Chi, Huang, & George, 2020) with supply chain (warehouse, distribution and logistics, etc) to create an integrated and user-centric flow of information for the effective control and management of operations ensuring efficiency and adherence to goals such as digital sales, delivery performance, customer service response times (Pereira & Frazzon, 2021). Therefore, digitising supply chain will enable real-time inventory management in that merchandisers can ensure that high-demand products are not only replenished rapidly but also given significant visibility and facing on the shelf space.