What Makes a Retail

Experience feel Premium?

PurchaseConsideration Post Purchase

PriceProductStoreStaff

PackagingReaction of Others

Quality of constructionAftersales service

BrandPrice

Design Communication

‘Loyalty Loop’

Over a number of recent projects, we’ve noticed how crucial the point of purchase experience is for premium brands in driving the famous McKinsey ‘Loyalty Loop’

Volante do a lot of work with major luxury brands

We wanted to understand what makes a retail

experience feel premium and luxury

…so we ran our own self-funded research into the topic:

Over 1,200 online interviews across

four major markets

• US - 310

• UK - 310

• China - 305

• Germany - 308

Eight x 2hr Groups

• Two groups per market

Two x 2hr Group discussions in each

market

• 1 male, 1 female

• All mid/high incomes

• Shopped in a premium store at least

once in last 12 months

Mix of genders

Mix of income levels

• Medium/high

• Shopped in a premium store at least

once in last 12 months

• Broad geographic spread

Key Findings

Some good news for brands seeking to build global equity -

there was striking consistency across markets and genders

Two factors predominate as key drivers of premiumness:

Spaciousness

• Empty floor space

• Items not cramped on top of

each other

• Shoppers not edging around

each other

Staff

• Easy to find when you want

them

• Welcoming, friendly,

knowledgeable

• But unobtrusive when you

wish to be let alone

When stores get these two basic elements wrong,

regardless of what else they get right,

their sense of ‘Premiumness’ drops

Generally only ranked around 4th/5th; roughly on a par with

being able to get hold of staff when you want them

Interestingly, high design elements can actually mitigate

against a brand if its customer service levels aren’t also high

Premium Design features aren’t enough on their own…

Ultra-stylish interior

+

disinterested/ill-informed/ absent staff

=

Implies the brand is more interested in itself

than it is in its customers

“ Some shops try so hard to be stylish that

they just don’t feel welcoming. Its like,

when you walk in you’re disturbing the

loveliness!”

Female shopper, London

A key sign of a store being premium is that there is a sizeable

proportion of floor space devoted to not selling things

• Bare floor

• Sofas to sit on

Space means a number of things

• It is easy to walk around and to see display items clearly, even when

the store is busy

• Items on sale have plenty of space around them and display cabinets

aren’t over-filled

• in a sense elevating the status of the items on display

More space than is needed = sign of Luxury

“It looks quite comfy, because they

have a sofa in the centre of the shop.

There was a lot going on, but one (still)

has the feeling that one can cruise the

shop very relaxed.”

Female shopper talking about

Thomas Sabo store in Hamburg

However, it is also important that a store isn’t so minimalist

that it looks bare and empty

• Smaller boutiques are sometimes thought to be like this

• The store should feel like it has a wide range of items on

sale

• There needs to be enough store furniture to ensure that the

shopper doesn’t feel like they stand out

Interesting cultural differences emerge

Staff are the other key driver of perceived Premiumness

Question: Thinking about stores that you have been into that sell

premium or luxury items, please rank the following in order of

their importance for making the store feel premium or luxury

“ If I can’t get their

attention [the staff], I

just walk. When I’m

about to drop a large

amount of money I

don’t want to have to

work at it!”

Male shopper,

New York

Americans rate quick

access to staff highest

Germans value

friendliness

Chinese look for

enthusiasm and

knowledgeable staff

British see staff as

less important (lower

expectations?)

“ I like the Swarovski

store, It is very fancy

and bright. The pieces

are always well lit. The

staff are all good

looking and fashionable

and from Shanghai.”

Female shopper,

Shanghai

“ It always gives me a

good feeling when the

staff say hello and are

friendly.”

Female shopper,

Hamburg

Male shopper,

London

“ Frankly, it’s a bit ‘hit

and miss’ with staff

isn’t it - regardless of

how posh the store is.”

Luxury brands have classically focused their

efforts on appealing to a small group of frequent

and high spending customers

The ‘Long-tail’

BUT

…there is another target group for Premium brands

• They don’t go into Luxury stores very often

• But when they do, it will be an important purchase for

them

• Individually they aren’t that valuable (one sale a year

or less?)

• But collectively they represent millions

Valu

e o

f cu

sto

mer

Frequency of purchase

These customers are confident

• they know they can buy almost anything they want in

the store

• They go into premium stores regularly, so know how

they ‘work’

• They aren’t over-awed by the brand (or the staff)

This group are the ones who are most readily put-off by sales staff

(because they know that they are ‘impostors’ in the store!)

• Truly engaged, open and welcoming staff are as crucial for them as they are for core, high net worth customers

Lighting works, not always consciously, to reinforce (or undermine) a brand’s proposition

Lighting Strategies can communicate a lot about a brand’s

proposition

Ralph LaurenChow Tai Fook

Abercrombie

& FitchSwarovski

Bright white, cold,

‘saturated’ light = a sense

of ‘purity’ and calm

Soft warm light,

compliments the ‘club’ feel

Visual metaphor for the

purity of crystals

Aspirationally relaxed

Self-consciously dark –

premium but also

‘naughty’

Low lighting compounds

sense that store is too

cramped /crowded

Designed to be

off-putting for the

‘wrong’ audience

Forces you to work

harder to find what you

want

Music and Scent work at a similar semi-conscious level

Generally only noticed when a store gets it wrong

Premium stores, esp. in Western markets are

strongly associated with nostalgic ‘50s/60s

American singers

• Frank Sinatra/ Billie Holliday / Ella Fitzgerald /

Nina Simone

More contemporary tracks can also work well,

provided that they are relatively relaxed

• Some criticism of Michael Kors stores for playing

music that feels too high energy to be properly

premium

Music seems to be important for relaxing

customers

• Putting them in the mood to buy

As can scent

• Shanghai Tang and Abercrombie & Fitch

both identified for their ‘premium store

fragrance’

Conclusions

Much of the success of a Premium Retail experience is

dependent on getting the basics right

Creating a sense of space

and allowing the products

to speak for themselves

Staff that help, don’t judge

and above all can read the

mood of the shopper

Ranked significantly lower than either good staff

or spaciousness

Too much emphasis is placed on creating a uniquely

luxurious environment

For many, a ‘stylish and premium’ feel to the store can

even be counter-productive

• Can feel unwelcoming and cold – designed to intimidate

Semiotically a sign that the brand is narcissistic, too

wrapped up in itself to notice its customers

Brand

Customer‘this store is impressive, but I

don’t feel welcomed or valued.’

‘Aren’t I gorgeous?’

Different Need states drive differing retail expectations

Premium Retailers are focusing on the wrong Need States

Leave me in peace

Make me in feel important

Excite me

Relax me

Make me feel good about

myself

Staff that don’t pester,

plenty of space

Acknowledged by

friendly attentive staff

Plenty of space, relaxing music,

good lighting, friendly staff

Imaginative displays, premium

design features, glamorous staff

An aggregate of all the above:

space, lighting, design,

staff, music

Arguably too many

stores put too much

emphasis on ‘Excite me’

– trying to create a

‘shock and awe’ retail

experience

Whereas customers

place a higher value on

‘leave me in peace’;

‘relax me’ and ‘make

me feel important’

A Few Words About

Volante Research…

We are

Brand & Comms

Specialists

Brand positioning

Brand equity

Brand architecture

Brand growth

Concept generation

Proposition development & testing

Pack evolution

Conjoint modelling & simulators

Creative development

Ad effectiveness

Mixed media evaluation

Brand Strategy

Innovation

Advertising and

Marcoms

U&A incl. segmentation

Consumer journeys

Retail & new channels

Consumer

Behavior

WE UNDERSTAND THE

LUXURY/HNWI SECTOR

Recruiting HNWIs

Key recruitment learnings are:

• They can be wary and publicity shy; trust needs to be

established and confidentiality maintained

• They won’t come for money but will expect some form of

monetary offer (as a mark of respect for their time), a

charitable donation is sometimes preferred

• They are hard to get hold of; they regularly cancel at short

notice, so determination, charm and persistence are key to

eventually speaking to them (this is one of the reasons why

depths not groups are necessary – they may agree to come,

but on the day may not be free)

• To make it easier, we always let the respondent choose the

venue that is most convenient for them (their home/their

office/their members club/a favoured bar)

• They are often curious to know how their lives compare to

others who are similarly wealthy (can they learn anything

from others; are they doing better/worse than their peers)

• An offer to share research findings with them can often

work well

Volante have considerable experience of accessing

informal networks of affluent potential respondents

Interviewing HNWIs

Many HNWIs are wary of how their wealth may be

perceived by others, leading to guarded conversations

When interviewing them it is important to establish trust and

to gradually get them to open up and be frank

This requires taking the time to build and establish trust

• Meeting at a venue of their choosing

• Reassuring about confidentiality and anonymity

Similarly, many can be classically ‘Alpha’ and this can

require a confident moderating style in order to ensure that

the discussion covers the issues that are needed and in the

depth required

• Being willing to challenge and probe respondents on

their attitudes and motivations

• Ensuring that the conversation covers the topics we

need and not just the topics they want to talk about

Going Beyond the Rational

A huge challenge

is to get beyond the rational

Respondents feel a huge need to demonstrate that their

purchase decisions are entirely rational and based on hard

metrics and a thorough assessment of the marketplace

….of course this is only half the story

Their decisions are also driven by more human

characteristics

• Brand image

• Inertia and unwillingness to change

• A desire to present your own self image in a positive

way

• Etc. etc.

Going Beyond the Rational

Volante employs a number of techniques to do this…..

Wherever possible we interview in person

• Direct human contact encourages a much more open and honest interaction than the more linear

responses gained in an Online forum

Adopting a robust moderating style that challenges respondents to go beyond their first comments

Using Laddering and NLP techniques to access 2nd and 3rd order benefits, digging into the emotional drivers

that lie under the surface of rational decision-making

Ensuring that Online surveys are visually engaging and varied

London Brooklyn Worldwide

Thank you reading!

If you liked what you saw and want to see the full presentation please contact:

Nick Johnson:

nick@volante-research.com / volante-research.com