1. Retail Theory & Practice Retail Location 3: Store Design & layout

2. Learning outcomes At the end of this session students should be able to: Identify the role of store environment in the marketing mix Discuss image and its importance to retailers Explain the role of design in the physical retail environment

3. Marketing Communication Retail promotion Retail communication All the elements of the marketing mix communicate in some way with the customer and thus they should be co-ordinated to give consistent messages

4. Store environment and ambience McGoldrick: various elements of the marketing communication mix. McGoldrick: the selling environment Kent and Omar: as McGoldrick Walters and Hanrahan: take a strategic approach and make clear links between communication and positioning Berman and Evans: ‘Establishing and Maintaining a Retail Image’ looks at marketing communication as a means of positioning but treats store design separately Gilbert: ‘future of retailing’ says that it will be interesting to monitor retail advertising in order to see how retailers will use the media to alter customer perception of their offer

5. How does the retailer communicate? This depends on: what the communication objectives are what communication methods are available what must the retailer do to maintain, alter, or develop, an appropriate identity? In marketing terms we are perhaps looking at the components of the retail image (the retail brand image?)

6. Whose image? Oppewal and Timmermans (1997) point out that although store image has traditionally been studied from the viewpoint of the customer it is the way in which the retailer perceives his store image that ultimately determines how he will act to improve that image Bloemer and Ruyter (1998) the need to standardise store image has come with the development of the major retail chains

7. Factors that contribute to the image of the retailer (a) (Berman and Evans: 1998) Quality, price and assortment of merchandise (James et al ) Fashionability, salespersonship, outside attractiveness and advertising (Marks) Client mix, institutional maturity, product offering, site convenience, shopping pleasure, ease of transactions, promotion emphasis, integrity, and image strength and clarity (Pessemier)

8. Factors that contribute to the image of the retailer (b) (Berman and Evans: 1998) Location, prices, facilities’ cleanliness, ease of credit, product quality, shopping excitement, customer sophistication, personnel friendliness, congestion and other factors (Golden et al) Time, treatment, efficiency, price, physical and technological factors (Peritz) Ambient factors, design factors, social factors and merchandise and service quality (Baker)

9. Leading to . . . elements of store image (a) Characteristics of the target market Retail positioning Store location and geography Merchandise assortment Price levels

10. Leading to . . . elements of store image (b) Store atmosphere Customer services Mass advertising and PR Sales promotion Type and extent of personal selling Elements of the marketing mix . . . Retail image Vary depending on sector

11. In the future What impact will e-retail have on store design and how will conventional retailers need to react in the future? McGoldrick : pay much more attention to the consumers’ experiential motives for shopping. (Stores may need to see themselves as a source of memories, of entertainment and thus a more theatrical experience)

12. The selling environment The retail store environment exerts an influence upon shopper behaviour at several different levels, including the overall design of the store, its atmosphere, the arrangement of its layout, the displays and the allocation of space between departments and between products At each of these levels, the decisions taken are likely to influence both the in-store purchasing behaviour of consumers and their longer-term patronage decisions.

13. Store design ‘Only one company in any market can be the cheapest: all the others have to add value and the most effective way of doing that is by design.’ (Rodney Fitch, Designer) £1.5 billion annual spend on shop fitting (Mintel) £70 million on the actual design processes (Mintel) design has become a major competitive weapon for shopping centres who need to attract customers Store design is one of the most visible and powerful elements of retail positioning strategy.

14. Other objectives of the retail environment (a) The store provides information value, attracting customers requiring such comparative information (Baker, 1998) Exterior and interior design convey messages to passers-by about likely prices, quality, service levels, etc. of store (Ward et al., 1992) Designs can reinforce or expand upon the values associated with a specific brand name (Gottdiener, 1998) The store can enhance consumer judgements about the qualities of the products and brands sold (Akhter et al., 1994) The store can create an experience that is an embodiment of a strong brand identity, such as Nike Town Chicago (Sherry, 1998) The store may aim to lower customers psychological defences, encouraging them to spend more time and maybe invite salesperson assistance (Green, 1986)

15. Other objectives of the retail environment (b) The store design creates a stage upon which lifestyle roles are acted out, as in some of the finest Japanese stores (Creighton, 1998) The uniforms and neatness of the staff, along with corresponding consumer reactions, enhance the experience in the retail environment (Solomon, 1998) Store designed to reflect: particular values of the locality, requiring design differentiation within the chain of stores (Wallendorf et al., 1998) ‘Retailing theatre’ and ‘store theatrics’ are terms coined to reflect the convergence of retailing and theatre, for example in music shops with live appearances by artists (Newcomb, 1999) Experiential retailing is especially conspicuous at the stores of Walt Disney, Warner Bros., Nike Town, Rainforest Cafes and Planet Hollywood restaurants (Kim, 2001) (full references in McGoldrickp. 493-497)

16. Elements which should be considered within a comprehensive design brief(Mintel 1999) Branding and positioning Customer flow and space utilisation Flexibility Security and safety Accessibility to all Infrastructure Quantitive analysis Mood and emotions

17. Elements which should be considered within a comprehensive design brief(Doyle and Broadbridge (IJRDM 1999) The need to change and evolve designs, in the light of experience, new competition and changing customer needs/expectations Issues of resource, including time, money, expertise and creativity

18. Atmospherics The science of ‘atmospherics’ is developing rapidly. Defined by Kotler as: ‘the conscious designing of space to create certain effects in buyers. More specifically, atmospherics is the effort to design buying environments to produce specific emotional effects in the buyer that enhance his purchase probability.’ Donovan and Rossiter (cited in McGoldrick) suggest that store atmosphere, engendered by the usual myriad of in-store variables, is represented psychologically by consumers in terms of two emotional states – pleasure and arousal.

19. Visual / sight elements Colour Brightness - lighting intensity and hue are carefully considered Size Shapes Rossotti says different colour schemes can be used to emphasis the uniqueness of departments but contrasts should not be too abrupt (e.g. toy department: primary colours; fashion department neutrals (McGoldrick p299)

20. Aural/sound elements Volume Pitch Type Milliman (1982) found that slow-tempo music reduced the speed of the traffic flow and had the best effect on sales volume in a study on supermarkets. Other studies show that restaurants use the variation of tempo to control the speed at which diners eat retail customers shop for longer when exposed to unfamiliar music and the right type of music can take the stress out of waiting to pay!

21. Olefactory/smell elements Scent eg perfumery bread, coffee Leather eg Mulberry Freshness

22. Tactile/touch elements Temperature eg high temperature: soft drinks Softness eg of flooring Smoothness eg of counters Note: dept stores, M&S etc use flooring texture, colour and shape to “guide” the shopper from one section to the next)

23. Store layout 1: Grid Typically used in supermarkets. The grid demonstrates Good use of space to display merchandise Efficient atmosphere Shopping can be done quickly – better for regular shoppers Stock control easier But Limited appeal for browsers Can be boring Central aisles are less busy Results from a tracking survey in supermarkets showed the following:

24. Supermarket flows

25. Store layout 2: Curve/free flow Typically used in fashion Encourages browsing Shoppers do not feel rushed More likely to encourage impulse purchases But May confuse the shopper Security of stock may be a problem Dead areas more likely Wasted space an extra cost

26. Store layout 3: Boutique Typically in dept stores Helps identify concessions etc Otherwise as free flow

27. Store layout 4: Guided shopper flows Sometimes termed the ‘yellow brick road’ this concept is used by IKEA. A long path takes shoppers on a set route through the store. Whilst this gives the maximum exposure to all areas it has a ‘Marmite’ effect amongst users with many forming a real dislike of the store because of it.

28. Space management Successful space management induces customers not only to buy more but to buy more of the more profitable merchandise (Harris and Walters) This implies a balance between the needs of the target customer (merchandise, range service etc) and the retailers need for profit (best use of space).

29. Space allocation Efficiency indicators eg. sales per sq foot help with decisions about the allocation of space. Software packages can produce planograms (visual plans which display the vertical and horizontal location of merchandise). Customers: Like related goods to be next to each other Expect goods to be in the same position on each visit Are prepared to go to remote parts of the store for essential products

30. Seminar 1.Compare the advantages and disadvantages of: a) the ‘grid pattern’ layout b) the ‘free-flow’ layout 2. Define an impulse purchase. To what extent is the concept of impulse purchasing relevant to the design of the retail environment.