If there’s one subject which has dominated retail in recent times, it’s probably technology, social media and online advances.
Swept up in the online revolution, retailers across the globe have begun adapting their operations to include websites, e-stores, Facebook pages and Twitter accounts. But in the rush to keep up with the Joneses, many brands may have spread themselves too thin and forgotten to also update their retail stores. This was the key message at the 2011 World Retail Congress Berlin highlights briefing last month, presented by Dr Sean Sands and Carla Ferraro from The Australian Retail Studies department of marketing at Monash University in Melbourne.
“I think it’s fair to say that this year, compared to last year, the key interest areas are really around the store environment. Last year there was a huge focus around multi-channel, online, what are consumers doing in this area, what are retailers doing, but I think this year there was almost a step back,” Sands said. “There’s all this talk about all these different channels and new technologies that are coming to the fore, but the reality is that the store is still not only key, but the glue that ties all these channels together.”
The importance of turning attention back to bricks-and-mortar was made all the more clear when figures presented at this year’s World Retail Congress revealed that up to 75 per cent of store customers do not make a purchase. According to speakers, this is the result of changing customer lifestyles, preferences and shopping habits and increasingly transversal competition such as multi-channel and shifting offers. However, the solution, Sands reports, is for retailers to think outside the square and take their stores to the next level.
“Loyalty is essentially decreasing, consumers are less loyal to brands and retailers now; they are looking around more, shopping around more and their preferences are increasingly demanding. Online now means that any retailer can contact any consumer, so that is also changing things.
“The main focus of the congress was really on the retail environment and retail space. What we know is that retailers – stores and centres – have long strived to be destinations, but increasingly retail locations must strive to become a third place in consumer lives.”
According to Sands, the concept of ‘third place’ – behind home and work place – means that in order to compete in the bricks-and-mortar space and win consumers over, retailers must work to make their store more than just a place to buy product.
“In the store environment, retailers must now look to not only attract customers but also deliver a high return on investment for customers – a space where customers actively spend a lot of their time, engaging them in some way,” he said.
Becoming a ‘third place’ destination also by default builds a retailer’s brand and can encourage customer loyalty, Sands said, and there are several ways retailers can enhance their store environment to achieve this [see box out]. This includes implementing new and creative ways to display merchandise in-store and attracting customers in to browse by organising interesting events in-store, such as an exhibition of designs and fashion artwork.
An international example of a retailer who has effectively used this strategy is London department store Selfridges, who has branched out by hosting an exhibition of quirky artworks dubbed Selfridges ‘Museum of Everything’.
“It’s once a year and the entire basement floor is dedicated to museum of weird and random things. But what this retailer has done is taken this idea and this concept and filtered it throughout the entire store – from the signage to the shop front windows, which attracts customers,” Sands explained.
“It’s about using spaces within the store for different purposes – beyond a physical retail space – to provide intrigue and engage your customer. It’s a great way to give customers a reason to come to the store, and makes the store a destination – it’s not just about selling.”
Working with designers or other brands by merging or lending a section of store space was also suggested at the World Retail Congress as a way to enhance the store’s offering and create a point of difference for the customer. A local example of this strategy can be taken from Australian brands Rebecca Manning and Tom Gunn, who recently combined their swimwear and footwear labels into one store for the summer.
According to Tom Gunn co-designer Gabrielle Thompson, both brands have already seen an increase in brand awareness from the merge, as well as cost savings. “We have already experienced greater brand awareness through exposure to a new customer base from Rebecca Manning. And it has dramatically changed the look of the store by making it a new colourful space, which has been bringing in customers,” she said.
Vibrant digital displays, creating ‘a store within a store’ to showcase a particular line or category of merchandise, and zoning, to entice different consumer groups into certain areas, was also recommended at the congress. Pop-up stores as a way to excite customers, also received a mention – but it needs to be done with a new twist. “Pop-up stores have been around for a long time, but the way in which they are being used is changing,” Sands said.
“For instance, what H&M recently did via their beach pop-up stores. What they did differently was, not only was it a short-term store, and a collaboration with a charity – 25 per cent of all store purchases were donated – but the items on sale were location specific. This included limited edition shorts, hats, sandals, beach totes and umbrellas – items not usually sold by the label.”
Sands added that when planning a pop-up store it’s best to announce the launch via online, Twitter or Facebook, rather than just in-store, to give customers a ‘heads up’ and integrate social media with bricks-and-mortar operations. While some retailers may already be innovating via these avenues, speakers at the World Retail Congress also identified an area which most, if not all, brands regularly neglect, to their detriment.
“One of the most interesting points I heard at this congress was that 60 per cent of consumer decision making within a fashion store is made in the fitting room. So that’s the place that fashion retailers really need to focus on engaging the customer, but often it’s overlooked,” Sands said.
“The idea that potentially more than half of consumers’ decision making is made in the fitting room itself astounded me. But globally I have noticed that fitting rooms are becoming quite cool places. Ben Sherman in Berlin, for example, has given every fitting room a different theme and different furniture, while Hugo Boss had a LED projection onto fitting room walls.”
However, Sands warned that when it comes to rethinking the store concept, and in particular the fitting room space, it’s about more than just aesthetics. Rather, retailers must create a connection to the brand.
“Retailers should keep in mind that this is the place where the consumer really makes the decision about your retail store, your product and their opinion of it and the way in which they express it to others.”
