Title: Why retail design is not a luxury

Author: Administrator

Date: 18 Jun 2008 8:00:00 PM or Wed, 18 June 2008 20:00:00

Summary: There is widespread perception among retailers that it is only worth talking to a retail designer if you want to open an up-market, luxury goods boutique store. For the rest of the retail formats, no design is necessary, because ‘we are here just to sell product’, and so it is simply a matter of putting stock on shelves, and the customers will come and buy it.

Body: 

Most of these retailers are quite astonished when I say that 90 percent of our work has been for mid to low market businesses. And there is a good reason for it. In fact, I believe that the value of using a professional retail and brand designer is much higher when you sell a mid-market product. Here are my reasons:

1. Many luxury products are already associated with strong and well marketed brands. This is normally not the case for a mid market product.
2. Mid market products may not have enough unique features and benefits of their own. This makes elements such as strong branding, product presentation and store ambience one of the few alternatives to price cutting if you wish to be different from the competition.
3. Most high end stores sell destination-type product (which means that they rely less on the by-passing customer traffic). This is in contrast to other stores that must rely on a strong and effective presentation in order to attract customers to come in and buy from them.
4. There is normally a greater reliance on volume selling in a mid-market store; this is where retail design methods can help increase return customer visitation and average sale value.

Another pre-conceived idea I often come across is a variation on the above theme, and it goes like this: ‘What will happen if we do the retail design, and our store looks expensive, so we lose existing customers?’

This reminds me of an old anecdote about two people discussing staff training:

Q: What will happen if we train them and they leave?
A: What will happen if you don’t train them and they stay?

So the answer to the above question about the retail design is, ‘What will happen if you don’t do the retail design and only your existing customers will stay with you?’

A good retail design can help you attract more customers because it addresses many fundamental areas of your business and store presentation

Can a retail business rely only on existing customers? Unfortunately for most retailers, their existing customers move houses and countries, change jobs, discover other shops, alter their habit or die. Can any retail business survive and prosper without continuously evolving, innovating, reinventing itself, in order to attract new customers?

A good retail design can help you attract more customers because it addresses many fundamental areas of your business and store presentation such as:

• Overall image and market positioning
• Shop front design
• Signage and graphics
• Sightlines from the outside
• Internal traffic flows
• Merchandise presentation
• Promotional zones.

Many of our clients tell us they are having this same experience when they re-open their stores after the refit. When new customers come in for the first time, they often say, ‘We didn’t know you existed!’, even though the store had been there in the same spot for many years.

But let’s go back to the issue of losing existing customers after a re-design. First of all, we need to rule out other factors, such as if the proprietor decides to implement across the board price increases straight after the refurbishment. This, in my opinion, is a big mistake and will definitely trigger a significant erosion of the existing customer base.

 

At the core of retail design lies a deep understanding of the targeted customers, their needs, likes, dislikes, shopping habits and preferences. Unless this was a deliberate intention (see about it later), the key objective of a well researched and executed design strategy is to produce a concept that is appealing and attractive to existing customers. The idea is to give the existing customers better environment and services, in order to retain them longer, encourage them to visit more often and to spend more during each visit (they may start buying things from you that they used to get from somewhere else). A store designed with this in mind will not look expensive but rather comfortable, friendly, inviting, and interesting.

Of course, in some cases a deliberate strategy of looking outside of your existing customer base is fully justified. This is appropriate when, after careful consideration and analysis of customer demographics and psychographics, you conclude that the type of people that come into your store are different to the majority of people in your area.

Here is an extreme example. One of our most successful projects was a café that lost 80 percent of their existing customers after refurbishment. In the same time, the customer traffic grew by 200 percent and the average purchase value increased by almost 100 percent. This meant that not only had the new customer numbers more than compensated for the loss of the existing customers, but also these new customers were spending much more per visit. For example, rather than stopping by for a coffee, they would come into the café for lunch.

In summary, I believe retail and brand design is not a luxury but a necessary, powerful and important competitive tool for every retailer. If used correctly, it can help to keep your existing customers, and to attract many new customers to your business.

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