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Ideations_JulAug2007

Ideations_JulAug2007

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Published by ibdf
Interbrand Design Forum's Ideations Newsletter - July/August 2007
Interbrand Design Forum's Ideations Newsletter - July/August 2007

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Published by: ibdf on Dec 23, 2008
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05/09/2014

 
Ever since Wal-Mart made it impossible to compete on price,retailers have been heard to declare, “
We
will differentiateon service!”Unfortunately, the retail boneyard has claimed quite a few companiesthat tried to “win by out-servicing the competition.” In most cases,they overlooked the customer.In the shopper’s mind, there is no service in retail. The best astore can do is manage your disappointment. A greeter maywelcome you to the store, but after that it’s all downhill. Youcan choose between a surly cashwrap clerk, self-checkout or the Internet.Even though people are quick to change brands because of it,most retailers remain ill-prepared to address service from ahuman resources or economic perspective. Turnover continues tocome with the territory—churn rates of 79 percent are considerednormal, except for fast-food where normal is 300 percent. For years,retail employment has suffered from a dumbed-down, dead-endimage. So much so, it’s become a job of last resort for the leasteducated. And as customer service falls, sales fall.As one retail expert pointed out, the customer can’t have low prices
and 
a store lled with smiling, knowledgeable, helpful associates.
When the company and customer decide to pay for both, they get both, as in the celebrated Neiman-Marcus experience. Or from theeducated staff at The Container Store. Luckily, a little ingenuity canmake up for the typically small, nomadic staff. Strategic designthinking to the rescue.“The store has a serious role to play in customer service,” says Scott
Jeffrey, chief creative ofcer at Design Forum. “Today we design
stores to do two things. First, to act as the brand champion whichmeans it has to embody the brand promise and make a bold visualstatement. Second, it should make you feel really good to be there,so even though there’s less personal service, the overall environmentmakes up for it. A great design also gives the store credit for thespecialty services it does offer.”In recent years, category leaders have made major strides in
improving the customer’s perception of service with rened layoutsand adjacencies. Big box ofce suppliers reoriented the store around
shopper needs to make selection easy. Retail bank branches havedone away with teller cages, added concierges and provided kiddiespots. Smart auto dealers have brought the Internet into their showrooms, along with relaxed no-sales zones where customers canretreat. The friendlier atmosphere promotes the perception of better service. No additional staff or training required. Convenience is
stressed, as well as exibility of use.
“Experiences have to be more than convenient, they also have to beexciting,” says Jeffrey. “And service is an important sub-set of experience, which includes the sounds, smells and textures usedthroughout the store. Customers interact with those design elements,which impacts their perception.”Apparel stores compensate for small staffs by adding luxurious
lounge areas, attering light and sometimes fragrance. Shoppers feel
 pampered by the surroundings, if not by personal attention. In thefuture, technology will connect to customers to a centralized personalshopper with style advice. But in the meantime, even small innovations
are having a big impact on perception. Gap installed a tting room call
 button, and J. Crew directs shoppers to the red phone in the case of out-of-stocks—a major aspect of service in the customer’s view.Consumer electronics retailers have taken a different tack by focusingtheir labor budget on genius bars and geek squads where it will have thegreatest impact. The store proper is set up for product interaction.Strategically placed digital technology helps, especially with productcomplexity. IMO Independent Mobile stores developed their owntechnology so shoppers can compare phones and plans from everycarrier based on their own needs. Screens that educate, inform or inspirewith creative ideas help take the load off store associates.Accountability—a big part of service—is embodied in a welcomingreturns area. Accessibility also has a huge role to play in taking care of the customer. JCPenney’s fully integrated in-store and online operationsallow shoppers to check their local store inventory from home to makesure an item is available in the right size. And the website is available atthe stores’ cashwraps.Strategically applied design can be both tangible and intangible,involving communication, environment, service and behaviors. It’s alsoin a constant state of evolution, keeping track of behaviors and tweaking
design to inuence purchase. According to Jeffrey, a store’s virtual,
 physical and human interface choices all spring from one strategy. Itrequires a lot of insight into what the brand means and what it wants to be. Even a company’s decision to offer full, semi or self-service isdetermined by brand.“Great stores tell a brand story in such a way that the shopper can insertthemselves into the story, and try on the lifestyle,” says Jeffrey. “And
the more creative, the better, like Urban Outtters and Anthropologie.
Creativity is a major source of value in our culture, and fresh ideas will be seen as part of a store’s customer service.“Brand strategy is central to everything,” says Jeffrey. “At the end of theday, it’s ‘who do you wanna be?’ When the customer leaves the storewith a bag, what else do they leave with? The experience. Now thatdesign is no longer at the back-end of the brand strategy process, it has alot to offer retail: greater customer satisfaction, greater control over your 
offerings and greater prots.”
July/August 2007
 
 
Can You
 Differentiateon Service?
A Retail Publication by 
an Company
 
A Retail Publication by:
7575 Paragon Road, Dayton, Ohio 45459Phone: 937.439.4400 Fax: 937.439.4340Email: retail@designorum.comBranch Ofces: London,Los Angeles, New York, Paris,San FranciscoD. Lee Carpenter, Chairman & CEOJill Davis, EditorAmy Niswonger, Design/ProductionFor more inormation or to be placedon our mailing list, visit out website,www.designorum.comand complete the contact orm.Reprints o articles or excerpts without the express written permissiono Design Forum is prohibited.Ideations is printed bimonthly.Subscriptions: $125 annually in the U.S.;$150 elsewhere.© July/August 2007
Chairman’s Commentary 
 
The Riskiest Job in Retail
Even before the annual Spencer Stuart report
came out to conrm it, and even before
 Fast Company
called it “the most dangerous job in business,” it was impossible to miss the high
CMO turnover at top companies. During the
last few years, a ton of talent has churnedthrough the likes of Wal-Mart, Best Buy, Gap,
Kmart, McDonald’s, Coca-Cola, Circuit City…
to name just a few.My initial take was that it was right to viewmarketing as a link in corporate growth. Itmerits a chair in the c-suite, but it seemed
companies were lling it with the wrong
 people. The advertising guy or gal who can drive a great adcampaign and raise awareness scores rarely has the skill setrequired to manage beyond the tactical.Promoting them to CMO looked
like a case of title ination, with a
huge budget thrown in to boot. Toworsen matters, many companiesnaively expect a marketing
campaign to “x the company” in
eighteen months. That’s almostalways a complicated long-term project, and the CMO shouldn’t bethe fall guy just because their work is the most visible.As it turns out, the problem goes deeper than that. The centralissue is misalignment of expectations. The chief executive in
many cases fails to dene and align the chief marketing role. For 
example, the CMO may see their job as the creation of imaginativemarketing initiatives and the maintenance of brand guidelines.The CEO however, expects strategic guidance, operational know-how, accountability, customer insight, change leadership, andexecutive collaboration.That is a tall order. And one, for me, that seems all too familiar. Itreminds me of an old design dilemma. Like marketers, designersused to be thought of as imaginative dreamers working in a bubble.
That’s changed drastically. Design is now rightly considered a
value driver. Same as every aspect of business these days, thedesign of environments has become very complex. As a result,design, as we practice it, is a partner in strategic decision-makingand accountable for its results. It’s also an incubator for innovation, brand ideas and a mitigator of risk. Marketers andretailers are expected to bring big ideas to the table, and we havelearned to help them feel a little more comfortable sticking their necks out.It still often happens that really large corporations put together very odd and ineffective teams on major initiatives that don’tinteract. That’s why we created a process that encouragesexecutive collaboration across silos and helps leaders facilitatechange. Sometimes the culture needs to be changed in order for the brand promise to be delivered in the store. And when itcomes right down to it, culture can’t change if there’s noexecutive collaboration.The primary source of value for most retailers used to be their  products or brands. Today, value is moving to the customer interface—in other words, theexperience, the lion’s share of which is the store. Because thestore experience helps drivecustomer loyalty and brand building, a bigger share of themarketing budget is coming intothe store. But now you can knowwhat store design is spending andachieving. People responsible for new concepts and formats—and
the CMO is often a major inuencer—would do well to nd aretail design rm that, like them, understands business complexity,cost of doing business, shopper needs, the source of prot for each
segment, and how to measure outcomes.An average CMO life-span of only 23 months has to hurt acompany, as good work gets thrown out and money wasted.Maybe now that the word is out, companies will hire morecarefully. The skills package they seek is rarely found in one
 person—it’s hard to nd in design rms.
Thoughtfully,
D. Lee Carpenter 
 
Chairman & CEO
 
 Like designers, CMOs need cross-functional expertisearound strategy, customer insight and metrics.

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