Dr Tim Denison, director of retail intelligence at Ipsos Retail Performance features in the summer edition of The Retailer, the BRC’s quarterly online magazine. The article highlights two different research approaches that are coming to the aid of store design teams in making informed, customer-centric decisions when faced with the daunting task of determining what their stores of the future should look like.
We are going through the most radical re-thinking of store design in more than 70 years, when the ‘self-service’ format began to appear on our high streets. Then, for the first time shoppers were invited to take a basket, wander around the store picking up whatever took their fancy and pay for the selected items at a cash-and-wrap / checkout desk. The new concept revolutionised store design and display, from signage to product hanging, pre-packaging to aisle layouts.
The ability we all now have to shop on-line is proving to be equally transformative to store design. The popularity of digital retailing continues to grow, albeit now at a slowing rate of expansion. Where, not so long ago, its advance was thought to threaten the future of bricks-and-mortar retailing, now we acknowledge that this is far from the truth; physical and digital channels are bedmates not neighbourhood nemeses. This, however, requires the role of the store to be re-thought.
Back in 2011, Ron Johnson, the then Senior Vice-President of Retail Apple (later CEO of J.C. Penney) asserted that “a store has got to be much more than a place to acquire merchandise. It’s got to help people enrich their lives.” This philosophy, that stores need to be far more than places simply to transact, has famously been reflected in Apple’s pioneering store designs.
Seven years on, store reinvention is one of the hot retail debates. We are told that stores need to be experiential, exciting and memorable places to visit.
They need to provide a compelling reason for people to choose to spend time in them. Some have answered this call by investing in digital technologies designed to pump up the ‘customer experience’. The likes of smart mirrors, digital screening, VR, wayfaring lights and messaging through iBeacons have all been trialled. Others have favoured experimenting with transmogrifying stores into retail hubs with community forums, learning centres or fun palaces – places with as much to do as to encounter.
Store design teams are faced with the daunting task of determining what their stores of the future should look like and what roles they should fulfil. Establishing what works and what doesn’t isn’t as easy nor as ephemeral as website designing. Changes neither come quickly nor cheaply. And this at a time when retail margins are haemorrhaging.
Observational research of customer in-store experiences is finding new favour among retailers, helping to decipher the winning elements that should be rolled out both from an experiential and operational perspective. Monitoring individual touch points in store only gathers intelligence about the transactional nature of a shopping trip. By building a library of the real journeys that customers are taking, it allows the dots to be joined up and complete experiences to be understood. Overlaid with demographic, behavioural and emotional data about those journeys, such research delivers a rich narrative of the functionality and appeal of new store concepts to shoppers.
The great advantage of observational research over other methodologies such as exit interviews, accompanied shops, focus groups and voice-of-the customer surveys is that there is no reliance on shoppers’ memories, honesty or reliability. Observational research can include several technologies, from trained observers using digital pens to compile maps of the customer journey in real-time, to cameras which record video footage of entry-to-exit shopping experiences. They have different strengths. Video provides greater depth of behavioural and emotional insight, while digi-pen mapping gives fast feedback around movements and interactions.
Evaluating the success of store designs and customer experiences is just as much about discovering what shoppers don’t do in the store as what they do. Observational research is a great vehicle to reveal why great conceptual ideas fail to work in practice. Some years ago, we were assessing a new store concept for WH Smith which included the introduction of honesty boxes for people to pay for their morning papers. We had already established that while they were prepared to spend time queuing to pay for most things, they got very frustrated very quickly if they had to queue for simply paying for a paper. Positioned by the newspaper section, the honesty box looked like a good solution on paper. In the trial it bombed. Very few regulars used it. Why? Our observational research showed that shoppers felt very uncomfortable leaving the shop with something without being seen to pay for it. Those prepared to use the box made a song-and-dance of getting their change out and being seen by others to put it in the box. The answer: re-locating the honesty box adjacent to the pay desk, so that customers felt at ease, knowing that they had been seen to pay.
Re-inventing the role of the store invariably requires brave re-design. Observational research is proving to be an increasingly valuable tool to store design teams, providing them with precise feedback on the success of the re-design through the lens of the customer experience.
Steve Jobs, Apple’s co-founder, famously said at the launch of the company’s first i-product, the iMac, that it represented the marriage of the excitement of the Internet with the simplicity of Macintosh. It transpires that the Internet is now also responsible for putting an “i” into stores, turning them into places to experience exciting stories as well as acquire goods effortlessly.