Understanding what customers want – then delivering it – is no longer an option. It’s a must.
We’re living in an era of constant change, and few industries are experiencing disruptive change quite like the retail industry.
Seasoned retailers are used to customer preferences changing over time and know they have to adapt to maintain a competitive edge. But over the past decade or so, growing competition and increasing demand for both instant gratification and personalization are fueling new challenges for retailers.
In response, retailers are doubling down on creating memorable, impactful experiences for their customers, ones that not only address what their customers actually want, but what their customers need from each retailer.
There’s no one-size-fits-all solution for all retailers. But retailers can adopt a design thinking mindset and methodology that will help them dig deeper into the customer experience and understand what their customers really crave from them.
What is design thinking?
By definition, design thinking refers to the strategic approach to understanding what people want. This isn’t based on our own perceptions or the success of other retailers, but by gaining an understanding of who you’re creating solutions for.
This thinking allows retailers to better customize or design their spaces in a way that will most effectively meet the needs of their shoppers. From there, retailers can choose the best course of action and the right retail design that meets those needs.
The theory and importance of design thinking in retail
All retailers share the need to answer three common questions:
● Why do consumers purchase one product or brand over another?
● How do you develop loyal customers?
● How can you increase customer engagement and purchases?
These three questions can be answered in one word: emotion.
95% of purchases are largely driven by emotion. By understanding this, retailers can gain insight into how customers feel about their in-store experience and purchases, finding out not just what it truly is that their customers want, but what they can give their customers.
People buy a product because of the results they expect and the way the purchase makes them feel, not always because of the product itself. They see themselves in the big picture, which is why customers don’t focus on product attributes alone, but rather what they can expect from using the product.
Take toothpaste for example: Who wants to spend two minutes every morning and evening brushing their teeth because the toothpaste contains fluoride? That’s why toothpaste companies focus on healthy smiles, fewer cavities, and fresh breath in their marketing — because those are the things that make it worthwhile to brush our teeth.
As humans, we’re driven by feelings, and retailers can connect with consumers on an emotional level when they understand their customers’ needs.
Design thinking in retail serves a few important purposes:
● It helps retailers identify the unmet needs of their customers
● It creates real solutions as opposed to ‘bandaids’
● It reduces the risk associated with investing in and launching new ideas
● It allows retailers to learn more about their customers
Design thinking can be applied to product design, services and experiences, leadership, business units, and your company culture as a whole.
Applying the design thinking methodology to your retail environment
Design thinking has five key stages that lead retailers through creative questioning and problem-solving, and this helps retailers take a more iterative approach to their retail environment.
The main focus is to realize your customers’ needs and expectations before adopting solutions to make sure you’re hitting targets and not just goals.
Empathize
Empathizing with your customers means relating to their challenges and their needs. Design thinking helps retailers do just that; you can’t solve your customer’s problem if you don’t first understand it and acknowledge it.
Define
Define exactly which challenges or problems your customer has, then look at how your customers shop, what they buy and how they interact with your retail environment. By doing this, you’ll better understand how to develop solutions that solve your customers’ problems.
Ideate
Once you understand your customers’ key problems, start thinking about how other retailers have solved similar problems and what you as a retailer can do to provide even more effective solutions.
Test
The great thing about design thinking is that it helps you take your ideas and test them, similar to iterative design. When you have an idea as to the solutions you can use to help solve customers’ problems, you can start developing what those solutions look like and how you’ll actually put them into action.
Many retailers use the results from the testing to determine whether they’re even solving the problem or if the real root of the issue is yet to be determined.
You’re essentially iterating your solutions to make sure they solve the problem, and if they don’t, you can use the design thinking ‘process’ or approach to restructuring the solutions you’ll provide.
HOW ITERATIVE IS YOUR RETAIL DESIGN?
Today, retail success is not so much about differentiating your products but differentiating the customer experience. Retailers who understand what their customers need and how to deliver on those needs are in a better position to deliver consistently and maintain their competitiveness — at least until the next major shift comes along. But you don’t have to wait until the next shift to start creating unforgettable experiences. Work with the experienced team here at CBSF to design retail environments that keep customers coming back for more.
What’s the future of retail?
Malls, as we know them, are changing. And many are changing not only to serve customers but to serve retailers, now and into the future. As the way we shop continues to change and evolve, retailers and malls have to find unique ways to adapt to consumer needs. Many malls across Canada are reinventing themselves not just for the short-term needs of consumers, but for long-term demand, thinking ahead for the future of retail.
Explore the future of retail for both malls and retailers alike in our white paper, “Reinvention: The Saviour of Canadian Malls?”.
