“I think we are most interested in the idea of shopping as a new kind of public space. How can we enrich these experiences? Can we bring new content, information, ideas and visual experiences to shopping in a thoughtful and dynamic way?”
This quote, from New York City-based design studio 2x4 Inc., defines the direction in which new types of physical retail locations must go.
The entire retail industry already has experienced a tectonic shift due to e-Commerce, mobile apps and social networking. Brick-and-mortar retailers, cognizant of increased competition from newer virtual retailing, must undergo a similar transformation, but of a different nature.
More customers are coming to stores, examining a product then placing the order ― unfortunately via smartphone and with a different retailer than the store visited, at a lower price (see Amazon Price Check App). How can retailers compete with that? What can they offer that massive warehouse or e-Commerce sites do not?
Reimagining The Brick-And-Mortar Experience
The answer is in redefining the purpose and philosophy of the store. At the most recent iQmetrix Wireless Summit, Doug Stephens, President of Retail Prophet, offered his view of the 21st Century retail location. Stephens explained that the role of the brick-and-mortar location is shifting from being the end to the start of the marketing/distribution channel.
The days when the physical store was the sole transactional point of sale are long gone. Today, the focus is on customer experience: creating excitement and inspiration, invoking social engagement, offering a relaxing experience through the use of design elements in the space, and providing interactive tools, personal communication devices and friendly staff. These spaces not only build a loyal customer base, but loyal and motivated employees as well.
“For most stores, moving from a transaction mindset ― “how do we sell more stuff?” ― to a value-creation mindset will require a complete overhaul,” stated Ron Johnson, CEO of JC Penney and former Senior VP of Retail at Apple.
Many high-tech device manufacturers are focused on the customer experience trend ― they have increased their physical store presence in spite of having adequate product distribution channels. The Apple Store, ranked #1 in customer service since it opened, leads the way. Microsoft has followed suit, as have other hardware manufacturers ― but so have purely online retailers: Google recently opened its first Chrome Zone store in London and another big Androidland store in Sydney. Online retailers are realizing that meeting customers face-to-face, and offering a unique experience and relationship in addition to effective shopping, is crucial to developing brand awareness.
Four Basic Qualities Of Successful Public Places
“Once retailers are brave enough to let go of the idea that their stores are solely places of transaction, they can focus on giving customers a rewarding experience,” According to FITCH, a global branding and customer experience agency.
How do you turn a physical space into a public place to which people love return on a regular basis? According to Wikipedia, this concept is known as the "Third Place:" social surroundings separate from home and workplace, the two traditional social places.
What is needed, first and foremost, is a definition of a big idea. A big picture. This will define the retail space in terms of purpose, target group, look and feel, customer activities, and more. Sometimes it is a story of a brand; sometimes a clear function of that space; sometimes even just a simple, overarching idea.
In the retail world, a big retailer with hundreds of stores might have well developed brands with all the stories and elements defined; but a small retailer with only one or two doors can have a very intimate, friendly story. Both of these scenarios are fine, as long as there's a clarity of function and consistency in demonstrating that unique character. This is what branding is all about: clarity, consistency and character.
Here are four basic qualities of a successful public space. These relate to bigger public spaces ― as well as to basic human behavior.
Retailers often say there are three rules for a good physical store: location, location and location.
Indeed, location always has been, and still is, crucial in the retail industry. But nowadays, retailers must ask themselves: Does the site act as a physical extension of our virtual presence (web site, mobile app, social media), which offers a great in-person experience and to where the virtual location drives traffic?
Maybe a customer was intrigued by the in-person experience and now is deciding where to buy: Should I buy from an online retailer at a lower price? Or should I pay a bit more from a neighborhood retailer offering more than just the product, such as an experience, advice and a relationship?
The goal is to make the place a destination, not just a utilitarian space. If that goal is reached, a less than perfect physical location is still acceptable. People won't mind a minor inconvenience, as long as the benefits outweigh the costs.
2. Comfort And Image
A place needs to be clean and well-designed in terms of form and function. It should provide a comfortable stay for a defined demographic. A recent psychological study from Columbia University, Relaxation Increases Monetary Valuations, found that when relaxed, people tend to place a higher value on products. A recent Wall Street Journal article analyzes how offering a relaxing experience can directly benefit retailers.
Another indicator of this trend comes from McDonald's, a symbol of "get in and out fast," who is putting billions of dollars into redesigning its restaurants in U.S. and Europe. The new design includes comfortable chairs, sofas, fireplaces and free Wi-Fi. The fast-food icon hopes that by offering an extended, pleasant and comfortable stay, customers will come back often ― spending more.
Starbucks paved the way for these experiences long ago and firmly has established itself as the quintessential Third Place.
A recent example from the wireless retail industry reflects this philosophy: O2 stores in the U.K. provide a comfortable area for browsing the newest apps. For business clients, the stores offer private workstations with free Wi-Fi.
At a recent wireless summit, during a discussion about the new generation of retail spaces, a retailer asked if it should provide chairs in their stores. Absolutely. Depending on the location within the store, a stool, chair, armchair or sofa in various shapes and forms help create the Third Place. Retailers can provide a sip of coffee, a snack, and free Wi-Fi ― anything that signals, "Come in and relax. No reason to be uncomfortable."
Successful places offer a variety, quantity and quality of activities. This is a huge opportunity for retailers. Of course, activities must be related to the purpose of the place.
Having something to do gives people a reason to come to a place ― and return. When there is nothing to do, a space will be empty.
What does this mean for a wireless retailer? If a store is empty most of the time, then customers are there to make a quick transaction, get advice or request repairs. During that customer’s stay, does the retailer provide additional activities that relate to its business and reinforce its branding, industry or products? Does the retailer offer a sense of community?
Activities in the space must address customer needs. Customers like to be entertained, inspired and educated. If they are offered all four, within the context of the retail space, they will not turn to other sources (news, social media, online reviews) or worse, leave the store.
Retailer should establish and nurture the customer relationship, as it will last beyond the duration of the stay: out of store, online and in all subsequent visits.
Disney stores recently were redesigned to combine entertainment, education and additional information. Disney describes its new stores as "The best 20 minutes of your child's day." The new stores feature a variety of activities for kids, such as an interactive theater, magic mirrors, car building stations and more. Even if a parent isn’t shopping, Disney still wants them to bring their kids to come in and play, each and every day. Even Disney, famous for creating successful public places such as theme parks, resorts and various other attractions, failed to provide activities in its older stores.
Sociability is the hardest quality for retailers to achieve and is the sum (or product) of the previous three. If people feel good about a place ― it's easy to get to, comfortable, clean, safe and offers appropriate activities ― they will enjoy the place, bring their friends and family, and come back on regular basis. Consider how sociability works for a successful cafe, sports venue, local recreation area or big theme park. Or a city. Or a store. Or your store?
Today, the above qualities better describe the time people spend on social networks than in physical spaces. The Holy Grail of the new retail experience will be to bring online social networks to physical spaces and merge the two concepts in a single, seamless experience that benefits both retailers and customers.
“Brick-and-mortar retail can win over online shoppers and turn the burden of real estate into a huge competitive advantage by creating social, family experience. Online [shopping] is solitary, so brick-and-mortar stores have an opportunity now to carve out a clear and differentiated shopping experience,” said Brian Backus, Founder of Kidlandia.
Alen Puaca is Creative Director of iQmetrix, a provider of retail management solutions for the North American wireless industry. Over the past 18 years, Puaca has worked on media and experience designs for virtual and physical spaces, merging the two in seamless experiences. He was part of design teams that delivered a number of themed attractions and exhibits around the world, including the Canadian Pavilion at EXPO 2005, BC Canada House at the Torino Olympics, and Al Khobar, the largest science center in the Middle East. Prior to joining iQmetrix, Puaca worked with DAE-VANOC’s core creative team on the design of the Vancouver 2010 Olympic Ceremonies.