From strategic display placements to creating an inviting atmosphere, there are many ways to make your retail space more engaging for customers.
Lately, there’s been an increased sense of hope when it comes to consumer confidence: It’s actually rising. People are actually spending money.
But while consumer confidence rises, their baskets seem to be shrinking as illustrated in a recent Nielsen report (mainly with their food purchases).
So, while brands, retailers, and consumers alike watch intently at how the economy progresses, we want retailers to know that there’s always a way to spend money to attract consumers while saving at the same time.
If there were one formula for retail success, we’d like to think it would look something like this:
Retail formula = X+Y
(“X” = where a retailer should spend, and “Y” = where a retailer should save)
Scientifically tested? Maybe not.
Useful for determining what to put where? Absolutely.
How do you start if you’re looking for ways to improve your store’s efficiency? Well, have you considered looking at what your competition is doing?
IF YOU WANT TO BEAT THEM, GO SHOPPING.
Yes, go shopping, and start with your competition – you need to know what your competition is doing to engage and persuade consumers to shop.
From our perspective, we strongly encourage a competitive analysis to be part of your design strategy and research. You need to get to know your customer:
- Act like a customer in your competitor’s bricks-and-mortar location and go online (yes, actually do some shopping to see what the experience is like).
- See what they’re doing right, and what they may be doing wrong.
- Conduct research with a third-party agency to develop a competitive analysis – they can do the shopping for you and track customer movements within a store.
- Always get intimate with your own store – spend some time to see what your own customers are doing in your retail space (your store’s camera and tracking software can help greatly).
In his book, “Made in America,” Wal-Mart founder Sam Walton wrote that he built the world’s largest retailer by stealing ideas from his competition. Walton was like a professional covert shopper and made his own retailing experience better by understanding what others were doing and improving where necessary.
Recently, we helped one of our clients with changing their retail environment. As part of our initial analysis, before any design and strategy were done, we:
- Spent time with their teams to understand what they had as “wants and needs” for their experience.
- Spent hours shopping and visiting their competitors.
- Observed customers in their own retail spaces to collect data regarding their customer behaviours.
Our analysis was presented at their annual general meeting, where we were able to successfully articulate the needs and wants, and how to achieve them.
Now, we won’t go into the psychological side of consumerism (as a side note, here’s a recent PwC retail survey that explores consumer behavior and paths to purchase), but there is a correlation between store and customer: The brand experience and a retailer’s layout can impact a customer’s buying behaviour.
Boosting your bottom line means being smart. And being smart means knowing what your competition is doing – the good and the bad – so you can better prepare to strengthen your environment.
PRACTICE WHAT’S BEST.
A study a few years ago showed that 40 to 70 percent of consumers make purchasing decisions in a bricks-and-mortar location.
And there’s no shortage of clever techniques retailers use to attract customer attention — getting them into the doors and getting them to shop. Consumers react to big red signs better and faster than other colours, they love the big shopping carts that welcome them to buy more, and the smells and colours of a space attract attention.
But how can you improve your store’s design?
Know how customers move through your store. When it comes to a mass merchant, the tendency is to get customers to go to the right when entering and have them move along the perimeter of the store (often referred to as a “racetrack”), then they’ll duck in-and-out of aisles. When it comes to fashion or specialty stores, customers will weave in and out.
Know where to put the premium stuff. When it comes to mass retail and convenience, for instance, the racetrack behaviour mentioned above establishes a premium status — customers will see more products along the perimeter. With fashion or specialty, customers are conditioned to see new products upfront and clearance items in the back of the store. In the mall, windows are premium display areas as they generate initial interest for customers walking by.
Loation. Location. Location. High-traffic areas are great. They create attention, a sense of urgency, and a need to get out of the way. That’s right. Shoppers will linger less and avoid getting in the way of traffic or causing it. This is a phenomenon known as the butt-brush effect, coined by legendary retail strategist Paco Underhill. And yes, it says exactly what it means – people don’t like to be brushed up against or touched, especially from behind. Customers will also engage with the display and products differently, and perceive them to be either discounted or higher quality based on how they’re displayed.
Different strokes for different folks. You need to showcase the right products in clear sight of customers, whether it’s grocery items on a run of gondola shelves or a striking dress on a mannequin at the entrance of your store. High-margin, private label brands in food and general merchandise stores should always use the strike zone to attract attention (eye-level location of products at the front of an aisle) and place lower priority offerings above or below them. For big box stores, customers perceive “bulked out” products displayed on the floor as a good deal. For higher-end shops, avoid clutter to create a sense of demand and urgency — if it seems like supply is low, a sense of urgency can be created.
Give them a reason to stay. History has shown that providing a diverse product offering will keep customers shopping longer. And making your space aesthetically appealing and comfortable with an experience, like coffee, food, and yes, barber services (Frank & Oak is making their fashion experience complete by going beyond clothing and adding services to enhance a customer’s look with an in-store barber services, and Club Monaco in New York City has added a flower shop to cater to the discerning set of clothing shoppers).
How your space looks impacts the customer decision-making process. Remember the butt brush we mentioned earlier? Keep that in mind when determining how you want to influence your customers. If you’re selling convenience items, avoid obstacles to purchase and consider impulse items at the check-out counter — customers are expected to come in and out quickly. Also, consider how to stay in business when you’re renovating — we shared an article recently that digs into this topic a bit more.
What you see is what you get. The type of store dictates how merchandise should be displayed. And perception is everything. Cluttered, messy-looking aisles in a store will create a sense that products are priced lower than another, more organized store, even if the products sold are the same at both. More expensive products create a greater emotional response and need an environment that matches the product offering – it creates a sense of comfort and value.
There is no cookie-cutter approach. You can sell them, but we don’t use a cookie-cutter approach when designing a strategy to attract your customers. You need to be very intimate with your brand and your customers. And if it’s a trend that’s caught your eye, be cautious — select the trend that makes sense and that’s a genuine match for your brand.
TRICKS OF THE TRADE.
Retail is a dog-eat-dog world, and your retail space lives in an aggressive sales-per-square-footage world. So, to avoid getting bitten, here are a few ways to get the most of your space.
- Shelve it the right way. To increase consumer traffic flow, get more products on display.
- Properly position displays to increase exposure to inventory. Create a path to purchase.
- Create an atmosphere to make the customer feel comfortable. As part of the shopping experience, customers want to hang around if there’s a reason to, like nice lighting.
- Declutter your space to create a crowd and attract a crowd. If you make room, they will come, and they will stay if others are there, too.
- Tantalize them with smells and colours. Turn up your customers’ senses with inviting aromas and strategic use of colour and sound – inspire your customers to envision themselves with your products.
- Become a mind reader — yes, you read that correctly. Trash the hard-sell approach and engage your customers quickly to support their reasons for shopping at your store, and to know whether your customer is seeking immediate help or is waiting for check out.
Retail space isn’t cheap. By compelling customers to visit, enticing them to spend time, and encouraging them to spend money, you’ll be able to justify the rationale for making changes to your retail space.
Remember this: Don’t take your space for granted. Changes are good to encourage customers to visit and to stay a while. Think outside the box, be creative, and be willing to take action on what you’ve learned from your competition.
The formula we shared at the beginning of this article may seem simple, but our clients have gained success because of our approach to design, supported by deep insights and experience.
And by the way, we love working with new and existing clients. Their unique business challenges become our challenges. Their needs and wants evolve into our strategies and become our motivation. And the solutions we create are distinctive, designed especially for each client. With years of experience, we understand that one-size-fits-all is not a sound approach and that each project is an opportunity to distill our know-how and guide clients with new insights.
Interested in making better use of your space? Let’s talk and see what we can do for you.