As the Internet and social media have shaped shoppers' interests, merchants are finding new ways to engage their senses and create niche offerings.
The world of shopping has changed, and consumers are the ones driving that shift as they increasingly use laptops, tablets and smartphones to make purchases. Retailers have been forced not only to respond to the evolution, but also to show there is still a role for brick-and-mortar stores.
"It is an interesting time for us," says Christian Davies, executive creative director for the Americas in the Columbus office of Fitch, a retail design firm. "So much has changed in the last five or 10 years … even the last three or four years. The onus is on retailers to have a conversation with consumers about the role of the store." But, he adds, retailers need to do more than just respond to what consumers tell them; they need to anticipate their needs.
Now more than ever, "Retail design is strategic and scientific, and not done by instinct," says Dennis Gerdeman, co-founder and CEO of Chute Gerdeman. "But it all evolves into customer experience."
Shopping used to begin once a customer arrived at a store. Now, going to a store has become the "experiential" portion of a more complex process that involves advertising, the Internet and social media.
One outcome of online shopping, Davies says, is that interests have become highly individualized. To accommodate particular consumers, the niche product market is thriving, as are locally produced goods and items that evoke a tradition of craftsmanship. Retail strategy and store design are adapting accordingly.
Al Bell, CEO of pet supply store Moochie & Co., says the concept of niche markets definitely applies to his business. A regional chain that was built to be scalable, Moochie & Co. opened its first store at the Mall at Tuttle Crossing in 2004. It now has 12 locations across four states. The company's storefronts, often distinguished by homey architectural details such as siding, are kept fresh, Bell says, in order to keep pace with their mall neighbors. "Landlords at malls regularly call and want a Moochie & Co. It isn't national; having one gives the mall a unique, fun feel," Bell says.
Columbus's Short North district has been building its reputation around niche products for three decades. The neighborhood's historic architecture initially attracted the arts community, and the monthly Gallery Hop has "become the area's calling card," says John Angelo, executive director of the Short North Alliance. "In addition to supporting the arts, it is a powerful marketing tool. It brands the Short North."
This brand has been so successful that despite a national economic downturn, the "density and variety of stores in the Short North has been increasing," Angelo says.
Mixed-use infill is springing up everywhere. "It's 20,000 square feet here and 20,000 square feet there," says Angelo, "but it's bucking the trend, nationally. I get a lot of calls from other cities who want to come in and study the Short North."
The Strength of Stores
Physical stores must leverage the one unique thing they bring to a customer encounter: their very presence. "Consumers crave real experiences," says Davies. "They can find and price and hear stories about items online, but they can't try on or touch or taste or smell those items. That is the yawning gap, and the retailer can explode this idea to the nth degree."
As part of an award-winning store design for Fixtures Living, a California-based kitchen and bath retailer, Fitch included a display where consumers can see various showerheads in action. "You can try it out and take a shower right in the store … and we've had a lot of takers," says Davies.
More retailers are introducing such up close encounters with the merchandise. Offerings range from hands-on classes to fashion shows. Moochie & Co. stores frequently host pet photographers, pet caricature artists and even rescue-animal adoption events. To accommodate these activities, designing flexible spaces is key.
As an example, Gerdeman cites yoga and fitness retailer Lululemon (not a client of the firm). For its in-store yoga classes, the company "just rolls the fixtures to one side," he says. "Lululemon is getting $1,500 to $2,000 per square foot. The national average is $350 per square foot."
But it's not just classes alone that are driving up sales. The fact that Lululemon stores are small is also a contributing factor, Gerdeman says, since "smaller stores generally see higher dollars per square foot. This is due to their tighter focus."
If economics favor small stores, how does this square with a landscape full of big box retailers? One approach is to break down the scale of large spaces to accommodate targeted products and branding.
Shop-in-shops, where niche brands are given their own area within a larger store, have come into vogue again. "Chute Gerdeman did a lot of these when we started in 1989; then the concept went away," says Gerdeman.
Elle Chute, co-founder and CEO of the retail design firm, explains the falloff this way: "With multi-brand, it was a question of, 'which fixtures and systems are whose?' The look had become chaotic and wasn't cohesive."
But now, Chute says, the pendulum has swung back again. Stores have found ways to present a unified series of spaces while still allowing niche brands to communicate their own message. Often, the brands occupy a "box" of space that can be differentiated through walls, flooring, fixture materials and even video graphics. And, she adds, retailers have learned to market their own house brands in this environment, as JCPenney (a past client) has done with Arizona jeans.
Sometimes the arrangement between large retailer and specialty store is more minimal. Familiar brands from Short North shops, including Jeni's Splendid Ice Creams, Middle West Spirits and Watershed Distillery, are all featured on endcaps within the nearby Weinland Park Kroger store.
Moochie & Co. has 40 mini-stores in the lobbies of pet boarding facilities and veterinarians' offices. "We have an area where we can put up our name, merchandise the walls and set up tables. Then we sell items that are tailored to the facility's customers; for example, we sell treats and toys at boarding facilities and health-care items in vets' offices," Bell says.
In historic districts where small shops are the norm, retailers may band together to lure shoppers' interest. "The Short North Alliance worked with Experience Columbus to create events for visitors, such as a spa day, which link businesses and move groups through the area," Angelo says.
Even when historic district constraints aren't an issue, retailers and designers still face limits. "There are no new malls being built. Retailers must refurbish and refresh existing spaces," Gerdeman says.
Design details, even on a small scale, can make a powerful impression. "There are ways to engage all the senses," says Gerdeman, whose firm uses everything from store graphics to scent cannons in order to create a sensory experience for shoppers. "Some of these ways are quite nuanced," he says. For example, circulation patterns through a store can be used to optimize the retailer's visual merchandising strategies.
The notion of communicating a lifestyle has become a central tenet of retail. "People are aspirational," says Gerdeman. "They want to recognize who they are."
Moochie & Co. stores utilize a design that looks like Moochie's house, complete with comfortable furnishings. It is "retro and low-key," Bell says.
"JCPenney just invested in 40,000 new mannequins to tell their stories. They can communicate lifestyle through visual displays, and show how things go together," says Gerdeman.
Using displays to showcase collections of merchandise can also inspire customers to make additional purchases during their visit. And with consumer interest in sustainability remaining strong, retail venues also are taking the opportunity to demonstrate their green values in everything from lighting to materials.
The big challenge facing stores right now is to define themselves in contrast with the information overload of the Internet. Designers say the most successful retailers will be those that set the stage for customers' social and emotional experiences, and find ways to tap into the history and tradition of shopping.
Kristin Dispenza is a freelance writer.
Reprinted from the February 2013 issue of Columbus C.E.O. Copyright © Columbus C.E.O.