2026/01/19 by Laxminarayana Yashaswy Akella, Praveen K. Kopalle, Stephanie M. Noble +2
Business, Management and Accounting · Engineering · #Consumer Retail Behavior Studies #Advanced Manufacturing and Logistics Optimization #Consumer Market Behavior and Pricing
paper · doi:10.1177/00222429261419762
This research shows that interdepartmental distance between two departments in a store can significantly impact joint (combined) sales of that pair. Using data from blueprints and sales across 64 stores for 52 weeks, along with an experimental study to test their theorizing, the authors find a curvilinear (inverted U-shaped) relationship between interdepartmental distance and joint sales. Specifically, close departments are perceived to be substitutes, decreasing the likelihood of buying products from both departments. As distance increases, departments are perceived as somewhat related but different, increasing their diversity and the likelihood of buying from both departments. As distance between departments becomes large and products are seen as unrelated, the likelihood of buying from both departments decreases. This relationship is moderated when departments have nonidentical layouts and when there are larger variety differentials across departments. Accordingly, the authors determine an optimal store layout using BARON solver by maximizing total store revenue. The results suggest an increase in weekly revenue of about 4.08% for smaller supermarkets (range of −.67% to 9.50%) and 3.20% for larger supermarkets (range of .82% to 8.5%). While strategic locations of departments can help retailers increase overall sales, prior empirical work has not studied the impact of distance between departments at the store level.