Supermarket optimization: Simulation modeling and analysis of a grocery store layout

Abstract

The purpose of this research is to utilize optimization and simulation modeling to yield an optimal supermarket layout. This is a study on how to optimize the layout of a supermarket in order to increase its gross profit via the maximization of impulse sales. In most supermarkets many items often get unnoticed because on average customers only walk one-third of the store. Since customers use tangible products as a memory cues, increasing the visibility of certain items will prompt customers to purchase some of them. Recent advances in marketing research reveal that encouraging customers to walk longer paths can often increase spending because they are exposed to more products. Retailers can then increase their sales by using the store layout-i.e., the design of the aisles and the product location-to extend the customers' shopping paths and thus indirectly motivate them to purchase items that are not originally on their shopping list. Designing a store layout that increases impulse sales is however a challenging task. There are several requirements that must be considered for finding a successful design. In addition to increasing the length of the shopping path for the average customer, the layout must ensure that the customers encounter several products that may trigger potential impulse sales, without exceeding the point in which the extra length becomes noticeable and burdensome for the customers. In this study, we use a simulation model aimed to analyze the quality of different potential layouts of a supermarket. The main purpose of the simulation is to efficiently replicate the customer behavior, in order to accurately capture the customers flow in the supermarket. The simulation evaluates the layout by determining the visibility of the impulse items by predicting customer movement across the store. Decision makers can use this simulation as a tool for identifying the optimal location of the different products.

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