Retail Customer Experience: Five Signs a Retail Store Needs a Makeover
Commentary by
Bob Phibbs, The Retail Doctor
Through
a special arrangement, presented here for discussion is a summary of a
current article from Retail Customer Experience, a daily news portal
devoted to helping retailers differentiate the shopping experience.
When a store
first opens, everything is fresh — the paint, the signs, the racks and
all of the merch. Now, however, many years later, the store may be still
chugging along, but that once shiny layer of paint is now faded, the shelves
are chipped, the merch isn’t all fresh.
As new stores
have opened over the past several years, they have upped the bar, and although
an older store may still be completely functional, it may be turning off
potential customers. Here are five questions retailers
need to ask themselves to see if their store needs a redesign.
Question
1: In
terms of organization, how do you conform to customers’ natural traffic
patterns? In North America, people walk into a business and turn to the
right, walking counter-clockwise through a store. If the cash wrap desk
is on the right, in front, customers constantly have to cross against
other customers. This limits and degrades the shopping experience for
all.
Question
2: Does
your store lack consistency? Are some signs in color, some hand written,
some black and white? Elements like paint colors, fonts on signage and
overall look should show consistency throughout a store because it shows
an attention to detail.
Question
3: Does
your merchandise scream sensory overload? If everything is stacked to
the gills, all on shelving, all lit the same, nothing will stand out.
The store could be overwhelming customers who are trying to figure out
what to look at. Information overload will prevent sales because it trips
the “I
can’t figure this out, I’m an idiot” switch and they leave.
Question
4: Does
your store look old? Just like hairstyles, jean styles and lapels, styles
change, and so do stores. Whatever style a store was in ’03 probably
isn’t what’s hot right now. Since great retail is like an idealized home,
a store can take its cues from magazines, TV shows and even the majors
who have spent a lot of money trying to figure out how to look “new.”
Question
5: Are
your display areas the same as they’ve always been? Eighty percent of
sales tend to come from the first third of a store, so all the “wants” should
be highlighted at the front and all the “needs” in the back with the
sale stuff.
Discussion
Questions: What are some signals that a store needs a makeover? What
are the most common design issues in older stores? What questions do
think stores need to be asking themselves when exploring a redesign?
There’s nothing worse than a tired looking store. Worn or stained carpeting, chipped and tired shelving all says to the customer “We’re not doing well…can’t afford to fix it.”
On rare occasions, you might convince the customer that you’re saving her money by not refreshing the store, but mostly you’re depressing her.
The most obvious one is declining traffic and sales. Change of demographics can also be one. Consumers have proven time and time again that it’s not just about the price, it’s about the experience.
Many of the points Bob brings up are opportunities for multi-store chains, not just individual stores, to look more updated.
It’s not just a matter of the age of the buildings or fixtures…it’s just as much an issue of corporate mindset. If the store is lacking in visual consistency (signage and display), these are probably issues in brand-new locations as well as older ones.
Equally, both older and newer stores are likely to look cluttered and hard to navigate if headquarters doesn’t embrace best practices in assortment planning and inventory control.
Finally, the oldest store in a chain can look spot-on if there is good management discipline in that location.
I think Bob has done a great job with outlining many of the major issues confronting stores as they try to keep up with the trend.
While I think all are important, it’s the ‘you look old’ issue that dogs so many independents and chains. Look at the old (only 3 to 5 years) Gap or Old Navy stores, and compare them to the newly renovated ones. Or Home Depot. Canadian Tire. Shoppers Drug Mart. Even Lululemon’s original stores look kind of dodgy compared to their new ones.
The pace of change in retail is amazing to be a part of. Store design has to keep up. The good old days of being able to have your store design ‘last’ 5 to 7 years are gone. Better look at a 3 to 4 year life cycle from this point forward.
As usual, The Doc makes some great points. The biggest signal I look for is a proprietary equation I developed called ‘the dust level indicator’. It’s quite simple. If you can leave a visible thumbprint on a product, it’s time to freshen up and re-merchandise that section.
Costs associated with complete makeovers may make smaller merchants cringe. My advice is to make smaller changes on a weekly basis. If something isn’t selling at a particular location, move it. An independent dollar store I work with decided to put their shelving in a diagonal pattern throughout the store. That freshens the store while still using existing fixtures and assets (and thus saving a truckload of money).
When considering a redesign, we need to look at things through the customer’s eyes. Remember: we are dealing with a creature that is easily distracted and has an attention span measured in nanoseconds. If you can’t sell them something in the first 500 feet or so, you have no hope in building a bigger basket. Ask yourself customer related questions when developing your layout. “Will my customers like to see the hottest product right up front or should I put what they are looking for at the back of the store?” is the type of question I make my merchants ask themselves. Owners and managers must ask for input from their teams when figuring out the layout. They probably know your customers better than you do.
I agree with Ms. Rider’s comments; declining traffic and sales are likely to be the first two indicators. Interestingly, we have also found that declining employee morale can also be an indicator. If employees are unhappy with the physical plant in which they are working it can impact their performance. This goes to Ms. Rider’s third comment about the experience.
We find many retailers still don’t understand traffic patterns and queuing. They still create environments where customers have to crisscross the store, and/or, each other to complete their purchases. This can range from the entire store to something as simple as getting a cup of coffee.
I had a conversation yesterday with an investment house talking about a retailer and the consumers’ perception of a specific company in the market. Part of our discussion was centered on what happens when one of the leading competitors enters the market. In essence, the existing retailer is repositioned out of the consideration set. While this may not be something they could have avoided entirely, it is something that they could have mitigated had they kept their store and offer current.
Old is pervasive. It creeps into everything…as the paint yellows so do the attitudes of those who shop there and the staff who work there.
The first sign is complacency. We all need to rally behind something, something we are excited about.
New environments are exciting for staff and customers–it shows that those who participate are current and vital and at the center of something worthwhile.
So if it’s not hip, it’s not happening.
But how do you inject hip into an older project? Compelling store design is an excellent way to revitalize the operation. Retailers must stay on top of it or be doomed to lose market share.
This topic is of keen interest to me personally and our organization. In fact, our purpose statement emphasizes that we focus on the “consumer experience” and that is what makes a makeover necessary.
Two years ago we commercialized an activity that we had been conducting in an ad hoc manner for quite some time, 360 Store Assessment. In essence, an objective, unbiased top-to-bottom analysis is done of a retail location followed by a ‘report card’ and solid recommendations for improvement…we fashionably call these extreme retail makeovers. And it is amazing how small, incremental changes can have a dramatic effect on the shopping experience. Often times these are details that have been otherwise overlooked by the store management because they had blended in with the environment.
The surest way to know if a retail store is in need of a makeover is to simply walk through the front entrance with an unencumbered perspective. If it doesn’t WOW you, if it doesn’t infuse the shopping experience from that moment, it’s time for a makeover.
A store needs a makeover every 3 to 5 years. The first guy on the block that does a makeover gets rewarded with more business. The last guy on the block that does a makeover is doing so to stay in business because his business has slipped to the newer updated stores.
If your investment in your store is lagging your competition, you are going to lose business.
There is nothing worse than going into a old and tired looking store as a customer. Part of the problem, and I’ve had to live through this, is that retailers don’t take care of their current stores which leaves them in a serious state of decay at some point.
Preventative maintenance and cleaning can greatly extend the life of the physical box and fixtures but one of the first places that money gets cut from in a budget crunch is the maintenance and cleaning budget. That leaves the stores in a serious state of disrepair and requires a bigger investment down the road.
Good questions Bob. For so many retailers, their stores have evolved to what they are today rather than working from a strategic plan.
They sometimes remind me of the old Johnny Cash Song “One Piece at a Time.” You might remember the song is about a guy who steals Cadillac parts off the assembly line for 24 years to build a car.
The biggest mistake is retailers thinking they can’t afford to upgrade their stores. What they don’t realize is how much money they’re missing by not doing so.