The Last Mile - Crossing the Threshold

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about it. His ease of engagement with the merchandise is determined by how it is displayed. Thecustomer can also acquire knowledge about the product through interactions with store staff.

Therefore once the customer is in the store his shopping behavior is influenced by a more

tangible „engagement‟ with what is around him, increasing the tactical choices available to

retailers to stimulate buying behavior.

To put this knowledge to work it is necessary to link the actions of retailers to in-store consumer

behavior by identifying the mechanisms at work. Deconstruct the retail environment in three

dimensions; product-related (the product categories, and their variety), space-related (the product

displays and signage, how customers can move around the store, and how goods move from

delivery to shelf), and people-related (how customers engage with retail staff in the store). A

retailer can act on any and all these dimensions to engage with customers. The outcome of

retailer actions can also be evaluated on three criteria; their functionality, their contribution to

aesthetics, and their role in creating an ambience. The functionality of design refers to the

effectiveness of the retail environment, assessed on how it enables increasing conversion of

customers to shoppers. Design achieves this through product-presentations, customer in-store

routing (guiding customers reach different parts of the store), displays (assisting customers

notice and examine merchandise), signage (enabling customers acquire knowledge to ease

buying), and the actual buying process itself (its ease and efficacy). One aspect of store

functionality, often ignored, is the ease of merchandise replenishment, the flow of merchandise

from store delivery to shelf. Shelf availability is an important retail challenge, a cause of lostsales, reduced customer satisfaction, and store loyalty. In store, the last ten yard supply chain

bottlenecks often hamper material flow through the store to the shelf. The aesthetic elements of

the design encompass the features that make the store attractive making it pleasant and



The feeling that a particular store is an option to be considered to find desired merchandise is

evoked in the mind of consumers when initial examination of products in the store suggests that

the product variety, quality, and price appear to be „suitable.‟ This feeling is enkindled when a

customer examines a few products that „establish,‟ „create‟ or „reinforce‟ a benchmark

Table 1 – Connecting designer actions to outcomes

What design

achieves

What designers use ↓

Functionality Aesthetics Ambience

Products Display efficacy

Displays to enable

noticing, reaching,

understanding and

evaluating products

Appealing quality of

visual displays

Setting of the displays

to evoke meaning of

intended store

ambience

Space Space utilization for

efficient store layout

Material flow in the

store

Directional elements

Graphic and visual

elements

Filled displays

Music

Temperature

Color

Lighting

Displays and signage Efficacy of displays

and signage to matchcustomer choice logic

Visual merchandising

MaterialsColors

Colors

Lighting

Staff Customer service Staff uniform and Service quality to suit



quality-price is reinforced by a second engagement with products, you will stop evaluating the

„suitability‟ of the store to fulfill your needs, and continue browsing. Once a customer enters the

store the functional aspects of the store become increasingly important because they determine

how well the store „works‟. The aesthetical and the ambience related aspects remain in the

background forming the backdrop of the shopping experience. The browsing behavior, the way

customers actually behave inside the store, is an indicator of their comfort in the environment,

the ease of shopping, finding the right products, and quality of service. The success of a retailer

requires considerable more attention to detail at each stage of the customer journey in the store.

The retailer has to identify locations in the store that customers will notice and then create

displays on those locations with messages to communicate cues that they can easily understand

and interpret. He has to continually reinforce customer perceptions about products and their

variety-quality-price developed both outside and inside the store, and enabling them make

commitments to search and shop.

This entire process takes place in seconds. The attention of the customer quickly shifts from the

store façade to other visual signifiers that could be images, graphics, fixtures and fittings,product displays, product packaging and other product level communications. From relatively

few dimensions of the store façade (structural, affective, and symbolic aspects) many tangible

and intangible factors now begin to communicate meaning to customers, and the consistency of

the different cues becomes important. Retailers need to pay a great deal of attention to different

store level cues. A customer inside the store is absorbing and interpreting information from

multiple sources. All the cues need to be attractive, consistent and relevant for customer choice

making. The number of cues, if executed with care, reinforcing the messaging, is an opportunityto ease customer experience in the store by enabling choice making. Walmart executed a major

repositioning in 2008, implementing changes in its category strategies expanding and contracting

d t i t d li t d it POS di l d i W l t t l h d



For us “save money, live better” in store …is about price presentation…as you walk into our stores, we are

making a very loud, bold price impression as we go forward.

…substantial price advantage for people who are looking to save money. Same products, lower price.

And…a good and getting better shopping experience. 1

In a September 2009 story Time magazine ran a story titled „Walmart‟s Latest Move to Crush the

Competition.‟ It presented a store level perspective of the intended changes, seen from the eyesof a senior operating staff.

… the company is in the beginning stages of a massive store and strategy remodelling effort…dubbed

Project Impact... goal of Project Impact is cleaner, less cluttered stores that will improve the shopping

experience…

…One …weekday afternoon I toured a brand new, 210,000-sq.-ft. Walmart in West Deptford, N.J., with

Lance De La Rosa, the company‟s Northeast general manager. “We‟ve listened to our customers, and they

want an easier shopping experience,” says De La Rosa. “We‟ve brightened up the stores and opened things

up to make it more navigable.” One of the most noticeable changes is that Project Impact stores reshape

Action Alley, the aisles where promotional items were pulled off the shelves and prominently displayed for

shoppers. Those stacks both crowded the aisles and cut off sight lines. Now, the aisles are all clear, and you

can see most sections of the store from any vantage point…

…And the discount price tags are still at eye level, so the value message doesn‟t get lost.

“They are like roads,” De La Rosa says proudly. “And look around, the customers are using them. We‟ve

already gotten feedback about the wider, more breathable aisles. Our shoppers love them.” 2

Intended changes in the merchandising strategy called “Win-Play-Show” was based on achievingconsistency in all possible customer contact points – product variety, displays, and messaging.

Win-Play-Show is really a merchandising strategy … In a “show” category, the company carries fewer

SKUs than it has in the past. A “show” strategy is a defensive approach that limits product selection but

does not cause a buyer to go somewhere else for a product. In “win” categories, price leadership is deemed

b l t l iti l l ith h i d d ll iti d di l i th t Thi



putting customers off.

As Howard Davidowitz…told the Columbus Dispatch, “They can‟t appear expensive. It‟s got everyoneconfused.”4

The reduction in product variety was experienced by some customers as a „frustratingexperience‟ not the traditional image of a big-box retailer who is expected to have category

width and depth.

“If I go to Wal-Mart, I expect to find almost anything,” Abella said. “Reducing inventory makes thingsleaner and meaner, but it‟s also very frustrating when a big box does not have what you want.” 5

Self-reflection and learning by Walmart

In March 2010 Walmart, cognisant of declining sales over three successive quarters, admittedthat the changes were a self-inflicted wound, taking decisions to reverse many of the changes.

“Self -Inflicted Wound”

… Walmart, which is one of the few retailers that saw same-store sales rise for eight consecutive quartersduring the recession, suddenly experienced sales declines. At stores open for a year or more, sales fell 1.5%

in its second quarter, ending July 31, 2009. Third-quarter sales dropped 0.5%, followed by a 2% retreat in

the fourth quarter.

… Walmart is dialing back. On Mar. 10, COO Simon said the store is reintroducing 300 of the items that

were removed. Dubbing the remodel process a “self -inflicted wound,” Simon said at a consumer

conference: “The traffic decline in the Project Impact remodel stores during the remodels is deeper than we

projected it to be. It‟s responsible for some of the traffic and some of the sales decline as well.”

“Inaction Alley”

One of the key Project Impact moves that hurt Walmart …was the decision to clear out “Action Alley,”

which is the main aisle and primary traffic corridor that separates various departments in supercenter stores





He synchronizes different aspects of the store as a retail theatre for functionality and aesthetics

through the senses (figure 2).

Figure 2 the three aspects of retail store design that need to be

synchronized

In design of retail stores all these three aspects of design come together. Retail design has three

objectives. It focuses upon store appearance as a means of differentiating the store versus

competition. The creation of an aesthetically appealing store through design is a means of value

enhancement and possible differentiation within the market. The design of the store is a means to

attract customers. And once customers are in the store, they need to become shoppers. Design

must enable conversion, or selling. Application of creative skills within the store is a means of

Store

aesthetics

FuntionalityEvoked

emotions



Each stage of the customer journey has the potential for retailer and customer engagement. The

customer is out shopping with an intention to browse or shop. This need creates an opportunity

for the retailer to engage and interact with the customer. Each location of the customer is like an

„act‟ in the „Retail Theater‟ for which the retailer can write the script and device a screenplay to

choreograph interaction with customers. Effective execution of this strategy requires the retailer

to map the steps of a customer journey, identify and understand customer needs and motivations

at each location, and then, using products, fixtures and displays, signs, graphics, and staff,

strategize to engage, communicate with, and assist the customer. The table 2 presents a working

tool to assist a retailer analyze, plan, and execute this strategy. The horizontal row details the

sequence of thinking required. It begins with identifying the customer location and delineating

their important needs and motivations. The third column describes the retailer goals and

objectives. With the context (location and customer) and retailer goals defined, the execution

details, column four, can be planned and detailed. This is an exhaustive process, requires

painstaking attention to detail, and asking the following reflective questions to make the store

design effective.

1. How does the store design accomplish gathering, holding, and focusing customer

attention? It is necessary to „engage‟ or „hold‟ the attention of the customer and

not allow it to „float‟ over the panoramic perspective of the store façade, entrance,

or a category department. The ability of a retailer to nudge and direct attention of

a customer, so that it appears natural and not contrived, is a factor in achieving

design effectiveness.

2.

What is the „most likely‟ psychological state of the customer at this stage of his journey? Customers in a store can have a wide spectrum of expectations and

uncertainties in a store. The emphasis is on „most likely‟ psychological state.

Retailers need to identify and prioritize the most probable state of mind from the



8. What is the role of staff in the engagement and customer journey? Does the

customer requires assistance, or prefers self-discovery?



Table 2 – Table to enable retailers strategize to engage, communicate with, and assist the customer

Customer

location

Customer

needs and

expectations

Retailer goals Engagement with the customer What to

avoid

Gather attention / hold the attention / focus the attention /engage / information needs

/ communicate

Outside the

store – in

the mall or

high street

Is this store for

me?

Image and visual

identity

commensurate with

target customer

Signage

Material

Windows

Lighting

Store design in perspective

Outcome

Evoke feeling of comfort

Mismatch

positioning

vis-à-vis

evoked image

Window Does the store

have what I am

looking for?

Within the

limitations of space

highlight thepositioning of the

store / brand and

induce entry

Criteria to plan and assess the display

Planning the display

Identify what to display and how – will it engage and holdIdentify the visual message based on thought and feeling to be evoked

Graphics should reinforce product in use imagery

Identify the category / product / feature and price message to be communicated –

will the message be easy to decipher and understand

The how of the execution – colors, lighting, features, props, etc.

Outcome

Evoke interest to enter

Dissonance of

message

Store

threshold

1. Reconfirm

that the choice

to enter is

correct –

product variety,quality and

price match

expectation.

2. Visualize

product in use.

1. Welcome the

customer

2. Hold the attention

of the customer and

allow the customerassess the quality and

price.

3. Direct customer

and eyesight so as to

attract and pull

customer inwards.4. Confirm key

customer choice

criteria to reinforce

quality and price.

The threshold display of products have to hold the customer attention

Communicate the message product variety, quality and price

More focused than the window displays

Planning the display

Identify what to display and how – will it engage and holdIdentify the visual message based on thought and feeling to be confirmed

Identify the category / product / feature and price message to be communicated –

will the message be easy to decipher and understand



OutcomeEvoke commitment to spend time evaluating products

Dissonant

experience



Walkway 1. Where to

find the

products?

2. Easy to find

1. Easy to find

2. Expose the

customer to different

categories

Signage

Directional signs

Search

behavior not a

cause of stress

Category 1. Product

variety isavailable

2. Browse and

search

1. Product variety

arranged to enablesee range.

2. Signs and staff to

assist.

The displays of products should present the product variety, quality, and price to

develop a scale in the mind of the customerPlanning the category display

Identify the visual message based on thought and feeling to be confirmed

Identify the category / product / feature and price message to be communicated



Dissonant

experience

Product

displays

Evaluate

products and

compare

1. Ease the process of

engaging with

products.

2. Product variety

arranged to enable

see range.3. Logic of display to

match choice

behavior.

4. Signs and staff to

assist.

Planning the product display

Identify the product / feature and price message to be communicated

Easy to touch and feel


Graphics reinforce product in use imagery

Staff to clarify doubtsProduct trial

Outcome

Induce buying

Dissonant

experience

Documents

The Last Mile - Crossing the Threshold