Last mile retail – 4

What happens when I enter a store

So how is the name of a retail store evoked in the mind of a customer when the need for a
product and brand is triggered? The answer to this question lies embedded in numerous
experiences. I recount.

One, in 2006 on a visit to a large, over 40,000 sq. ft., supermarket store in the UK I sensed a
reasonably strong smell of freshly baked bread as I entered the building. I looked around for a
bakery, found none in the vicinity. The supermarket bakery was at the rear of the store, signs
visible from the entrance. To stimulate demand for products by evoking a feeling of freshness, or
just to make shoppers hungry, the supermarket had engineered to blow the aroma of freshly
baked bread throughout the store.

Two, working on the design of a chain of supermarkets, I was exposed to a long list of
psychological principles behind grocery designs, all engineered to create the right psychological
conditions for consumers to buy what the retailers want them to buy. (See the list of the type of
design principles). I found this list to be very limiting because it focused upon maximizing
opportunity for the customers who are in the store. None of these addresses the store choice
question, how does a retailer make a customer choose his store?

Supermarket design principles

ENTRY

Flowers - They enhance the image of a store, consumers walk in to something that is pretty, smells great
and builds the notion of fresh.

Produce - To create a tempting sensory experience. Stores need to communicate to shoppers that produce
is fresh.

Merchandising guideline – Freshest produce at the back.

Bakery - The smell of fresh food makes a person feel hungry, and buy more products.

Merchandising guideline – Make the smell of fresh bread waft around the store.

Grab-n-Go Items - To get back business lost to convenience stores.

Merchandising guideline – Create a small C-store in front of the store making it convenient for the
shopper.

Bank ATM at entry - To enable customers’ access cash to spend.

PERIMETER

End-cap displays – Distributors / manufacturers pay for prominent “end-cap” placement - on the ends of
the aisles - to launch or promote a new or popular product.

Merchandising guideline – Opportunity to increase margins.

 Retail as entertainment – Create opportunity to enliven store atmosphere with live demonstrations and
displays.

Merchandising guideline – Slow customers down by make atmosphere livelier.

CENTER AISLE

General merchandise/canned goods – Pull the shopper deeper into the store and expose them to items
along the way.

Merchandising guideline – Use end-caps and displays to pull customers into aisles.

BACK OF THE STORE

Dairy products / eggs / meat / breads – Place these essential product categories in the farthest reaches of
the store to expose shoppers to the maximum amount of product on their “quick trip” to maximise impulsive
purchase.

Merchandising guideline – Create feeling of natural circulation through a race track concept to make the
customer overcome feeling of distance traversed.

Merchandising guideline – Keep height of shelf displays low to enable customers see through to
department and promotional signage.

EXITS

Registers / exits - Convert waiting time into buying time.

Merchandising guideline – Impulse products to sell and distract attention away from the waiting time.

SHELF LAYOUT

Top -- Smaller brands, regional brands and gourmet brands.

Shelf 2/3 (going down) - Best sellers and other leading brands. This is the “bulls-eye” zone. Not for the
lowest-priced item in this most effective spot.

Kid’s eye level- Products with kid appeal are here.

Bottom - Store and private label brands, oversize and bulk items. Store brands can also be placed next to
mainline brands to enkindle evaluation. In general private label or store brands can be placed at the 4/5
shelf depending upon the store visual display strategy.

COMPLEMENTARY SERVICES

Deli/Coffee Bar – Create an opportunity to rest and relax.

Pharmacy and other complementary categories like travel, telecom, health club, doctor clinic and
other services – Create opportunities for frequent visits, each a purchase opportunity.

Convenience – Take the stress out of shopping by creating Create opportunities for frequent visits, each a
purchase opportunity.

http://frugalforlife.blogspot.com/2009/06/psychology-behind-grocery-store-design.html

Three, retail in India was booming and I found the CEO of one of the largest chain comment that
the Indian retail customer was looking for the „look, touch, and feel‟ of the Indian bazars. Was
this perception based upon a deep understanding of the meaning of shopping to the Indian
consumer? It is one thing to say that a store should be designed so that their interiors closely
match the „aspirations‟ of their core customers and a completely different thing for the customer
to say that this is „my kind of store‟ by creating a store to reflect the atmosphere of an Indian
bazar where people congregate without being intimidated by the surroundings. It is fairly
common for retail CEOs in India to emphasize the role of price in the context of organized retail,
„organized retailers have the advantage of large scale operations. This can be used to eliminate
intermediaries and offer better prices to the customers by passing on the middlemen‟s margins to
them. The retailers are also able to get better bargains with suppliers and manufacturers by
offering business scales higher than the local kirana.‟ There was something missing here. The
logic of retail appeared too mechanistic. Emphasis on scale, low price, variety, and bazar
ambience appeared incomplete. Was the competitiveness and sustainability of retail this simple?

The 1970s giants of retailing Tesco and Wal-Mart made it their business to „pile it high, sell it
cheap‟. The thinking was that consumers would buy as long as they believed they were getting
cheap prices and that the goods were of reasonable quality. In a seminar on retail design 1 Wal-
Mart presented interviews with several shoppers, who one after another, admitted that they like
shopping at Wal-Mart because the prices and selection are good, but they don‟t want one of the
stores near their house. The customers were saying, „Yeah, you guys are great, but don‟t come
near my house.‟ So what was missing? Was Wal-Mart sensitive to what it stood for culturally,
and what its customers really wanted? This is best understood when customer feedback tells us
that a housewife shopping is actually an expression of her „caring,‟ „nurturing instinct,‟ and
„doing the best for her family.‟ Lists, prices, and savings are a means to that end. Customers
wanted Wal-Mart to be: caring (compassionate, not cold), real (approachable, not phony),
innovative (smart, not complacent), straightforward (simple, not complicated), and positive
(motivating, not pessimistic). In practical terms Wal-Mart focused on meeting this goal by
focusing upon architectural design. We have already discussed the changes in the design of Wal-
Mart in 2008 and the unexpected consequences.

Four, if Wal-Mart was about architecture, how do customer cultural perceptions and needs
manifest in products stocked and retail operations the basics of retail? The example of
OfficeMax, a large US office supplies company, explicates this. Many companies articulate a
description of their customer profiles and personas when planning product mix and store
environment. OfficeMax‟s persona is Eve, a woman between 22 and 55 years old. Eve is a
business woman, and has children. Eve cares about five things: inspiration, style and design,
organization and efficiency, value, and expertise and trust. And all that OfficeMax does is geared
to give the customer an OfficeMax experience - in-store displays, product benefits, and
cleanliness of the environment - is designed to appeal to Eve. The company operates an “Eve
panel” of 5,000 consumers, 71 percent of the Eve panel says they expect OfficeMax to have
“new, interesting and designed products,” and this largely drives the company‟s private label

1
http://www.retailcustomerexperience.com/article/21520/GlobalShop-Walmart-on-the-return-of-retail-architecture
initiative. 2

Five, I managed the start-up and operations of the franchise of Disney Corners in the UAE until
these were shut-down by Disney in 1998. The Disney stores and corners were envisaged to
create a magical experience in-store. This was always a challenge because of the product-
centricity of the business, the implicit emphasis being on pushing short-shelf life film
merchandise. Disney Stores in the US have also undergone a metamorphosis over the years and
have launched stores focusing upon „immersive‟ experience, where by integrating technology
and creative store planning Disney seeks to provide one-of-a-kind retail experience for children
and families.3 Landry‟s Restaurant Inc.,4 operators of the Rain Forest Café,5 and Aquarium,6 is a
company that is focused on creating experiential and fun-filled dining environments. The
company is committed to serve great food at a reasonable price and courteous service in a „fun-
filled‟ atmosphere. The company focuses on ensuring that from the moment a guest walks into
one of their restaurants, the ambiance lets them know that they‟re in for something special.

All the above experiences suggest that customers connect with retail stores and store
environments at a profound psychological level, beyond the products, their prices, and
merchandising. Customers have a tendency to „categorize‟ retail environments. They derive
hypotheses regarding the personal and social aspects of the retail environment. The
categorization is beyond the formal-casual-fashion styling, or price-quality oriented scales.
Customers use labels to classify „people‟ who visit different retail stores. In a supermarket
perception study in Dubai different brands were categorized on the ethnicity of the dominant
customers; a Spinneys was for Western expatriates, Lulu for South Asians, and Union Coop for
UAE citizens, the labels being shorthand for ethnicity, income levels, and occupation type, etc.
The reality of the consumers visiting the stores was different and more heterogeneous than the
perceptions appear to suggest.

This tendency for categorization of stores by customers is fairly widespread. It serves as

convenient shorthand, a way of positioning stores in the mind. Assume you walk into a store that
you have never visited. Without conscious effort you will start to develop perceptions about the
store. You develop an instinctive feel about the price range of products, about whether it is an
expensive store or a mid-priced store? You may also get a sense of the „kind of customers‟ who
shop there. We have all sometimes instinctively felt when walking into a store, „Is this store
really for me? Do I belong here?‟ Customers form perceptions, which strengthen into opinions,
based upon experiences and feelings aroused while in the store environment. The perceptions
2
http://www.retailcustomerexperience.com/article/21536/GlobalShop-OfficeMax-on-visual-merchandising
3
http://www.retailcustomerexperience.com/article/113014/New-Disney-Store-is-immersive-one-of-a-kind-retail-
experience
4
http://www.landrysrestaurants.com/pages/about/pg_whoweare.htm
5
http://www.rainforestcafe.com/
6
http://www.aquariumrestaurants.com/
 and conclusions are self-developed and based upon the totality of the in-store experience evoked
by all the constituent elements like merchandise, merchandise arrangements and display, store
furniture and layout, decorations, and sales staff and their behavior, etc.

Retailers use this tendency of customers to design stores at a conceptual level focusing upon
their target customer base using the physical and functional aspects of the store to give cues to
customers. This is manifested when one experiences retail stores in a country different from the
one you reside in. Does the store evoke perceptions? Different emotions used to be are aroused
when one used to walk into a Wal-Mart versus a Target, the design character of the store stark in
Target. See images in table 1.

Three stores from the same retail company, Gap, Banana Republic, and Old Navy, connote
different meanings to customers. Gap is positioned to epitomize „iconic‟ American style whereas
Banana Republic is designed as „easy to get to‟ dignified luxury, and Old Navy is „accessible‟
fashion. We may not experience the three brands the way the company intends, but different
feelings are evoked while shopping in the store or even when thinking about a visit.

Store image is evoked through diverse attributes – location convenience, merchandise suitability,
value for the price, store services, store congeniality (warmth – my kind of store), and post-
transaction satisfaction. Table 2 summarizes the different aspects of the retail store that influence
residual store image in the mind of customers.

Table 1 – Before and after pictures of Wal-Mart 7

Left photo of „Action Alley‟ and displays And after

before

7
Source Walmart investor presentation in 2009.
 Table 2 Creating store image – small things matter
Merchandise Quality
Assortment
Styling / fashion
Guarantees
Pricing - Value
Service General level of service expectation
Behaviours and feelings communicated by
salespersons
Adjustment (for apparel)
Availability of self-service
Policy and ease of sales returns
Delivery
Credit
Clientele Perception of social class appeal
Congruency with self-image
Store personal
Physical appeal Lighting
Flooring
Store layouts
Displays
Merchandise clearly marked
Colour
Store architecture
Signage
Convenience Location
Parking
Convenience internal to the store
Promotions Sales Promotions
 Advertising
Display signage
Store congeniality Feeling of warmth
Acceptance
Institutional perception Conservative / modern
Reputation
Reliable
General perceptions Good or bad value
Fair
Innovative - Shows new styles / products before
others – always something new
Carries brand names / also has similar value
merchandise
Adequacy of staff
Speed of check-out
Friends shop / don‟t shop here
Near other stores – complementary
Pleasant
Been in the community for a long time – belongs to
the community
Growing or falling behind
A comfortable place to shop
Good for specific products – category
Store is unique / or like the others

Shoemart is a retail chain of over 100 stores for shoes in the GCC countries. In the initial years
Shoemart was positioned as a category killer, selling a mix of branded and own-branded shoes.
Shoes did not carry the name Shoemart as a brand name. They were given brand names. Shoes
were displayed by style in long steel racks, understating the brand (right photo in figure 3 shows
the type of displays). Some prominent brand names used to be displayed on the peripheral walls,
with products displayed in brand fixtures below the branding. In 2007 Shoemart redesigned the
stores. Shoes were now displayed by brand and the store designed as a series of brand islands.
The fixtures were trendier, using glass, steel, and wood (left photo in figure 3). The range of
brands carried by Shoemart also underwent change. (Shoemart is a private company. No details
of the merchandise and category changes are available.)

Table 3 – Compare fixtures and displays in new and old Shoemart

New Shoemart Old Shoemart Racks

This was another test case of assessing the impact of store design on customer perceptions.
Customers respond to store design at a subconscious level. They draw inferences from the
design, social and environment of the store when evaluating stores. A new store or a newly
designed store is an unfamiliar territory when the customers walk in for the first time. It is an
ambiguous context. As customers walk in they explore the environment, experiencing it through
the senses, visually, physically, and experientially. They slowly decipher the store setting, and
make judgments about the setting based upon direct and indirect cues, and information available.
In the case of a redesigned store like Shoemart or Walmart customers tend to make judgments
and attribute characteristics based upon their past experience and inferences. A similar process
also occurs in new stores shaping expectations, the assessment there being influenced and
benchmarked against similar stores. The first reaction, in the case of Shoemart, will be a
response to the visual perspective. The store is different, disconfirming older perceptions about
the past experience with the brand. A need may be triggered to „understand‟ and „explore‟ the
new store. Customers questions will be many, „how is it arranged, how can I look for what I
want, and can someone help me?‟ A secondary perception, after a little exploration, could be, „It
looks different, more upmarket. Is the same product range available? What is new? Are the
prices same?‟ And the key question „Is the new Shoemart for me?‟ After some exploration,
seeking help from staff, the evoked feelings to the new display strategy could be, „I used to
search by style, compare brands and prices and select, and now I have to move across from one
brand to another brand display.‟ The customer will balance the extra effort to browse and search
with his outcome expectation, the value proposition in terms of styles, quality, and prices of
products. If the expected consequence of the extra shopping effort, the physical and psychic cost,
is worth it, and the customer finds what he is looking for, the new store design will be
experienced as positive.

Shopping is concurrently a simple and a complex activity, a mix of the conscious and
subconscious working together. During shopping attention is not turned on in a rational sort of
way. Many spontaneous and reflexive questions are asked and answered in an intuitive way. The
customer entering the store is subconsciously asking „What is this?‟ or „Is this for me?‟ even
before asking „Where is what I want?‟ Visiting a store can be visualized as a „learning‟ process
where the customer seeks and gets answers to his questions from the retailer. The retailer
transmits his expert judgments to consumers about the products via the products, their displays,
signage, store architecture, and staff etc. The store is a means of communication. It is a symbolic
representation of the statements „Here is what we have to offer. Here is our pricing. What do you
think?‟ And if the customer‟s respond by making purchases, the behavior is saying – „this is
quality merchandise at great prices. We like the products and the store.‟

As soon as a customer enters the store, he has to familiarize himself with the store; he has to get
a feel for the products-quality-price equation, figure the layout of products inside the store, and
start searching for what he wants. Customers appear to „pause‟ after entry as they begin
processing of information from the visual imagery of the store. The pause is intellectual, not
physical, as the human faculties seek to connect with what is proximate and inside the store.
When one is sees a panoramic perspective of scenery, attention is drawn to prominent focal
points in view. As humans we cannot focus on too many focal items in view, it diffuses and
dilutes attention.

Store design features

Customers experience the design of a retail store before engaging with the other elements of the
store like products, displays and staff. Outcomes of the initial experience are the preliminary
perceptions and expectations that begin to form in the mind of customers. Let us see how this
happens. In table 5 & 7 & 9 three different stores of each product categories – supermarket, cell
phones, and sports shoes – are presented. If you are asked to rank your „expectations‟ of what
„may‟ be the nature of shopping experiences in the three store on different attributes, the ranking
may be as in table 6 & 8 & 10 respectively presented below the set of photographs. The
experience of store design and ambience are visual cues that trigger consumers to form initial
perceptions of the store. The store design creates a frame of reference, a context in which the
merchandise is seen, and indirectly influences consumer‟s perceptions and expectations about
product „quality and variety,‟ „in-store experiences,‟ social aspects of the store „crowding,‟ and
customer service.

The goal of a retailer is to either reinforce the initial perceptions and expectations, if they support
retailer goals, or contradict and weaken them. If after crossing the store threshold the customer
„feels‟ that the products in the store will „meet‟ his expectation of „value,‟ based on product
quality and price, he will be comfortable continuing his shopping into the store. The customer
may also feel uncertain about the store if his initial perceptions based on the initial design cues
are dichotomous with his needs; if the design elements suggest a more „exclusive‟ and
„upmarket‟ store environment that correlates in his mind with „higher levels of service‟ and
„higher prices.‟ In table 7 a budget customer may feel more comfortable walking into an
exclusive Nokia store (S 1) or a „conventional‟ looking multi-brand retailer (S 2), and little
tentative entering a more „exclusive‟ looking store (S 3). On the flip side another customer may
walk into the exclusive store seeking „personalized‟ service, less sensitive to price, comfortable
that value of convenience, time and bespoke service may be valued in the higher price for an
undifferentiated product; the same cell phone may be available in the three stores. From a
consumer behavior perspective at the store entrance the store „character‟ or „atmosphere‟ may
generate price perceptions, that are independent of the actual prices for undifferentiated products.

So how does a retailer catch the attention of the customer?

 Table 5 Three supermarket photos

Clockwise from top left –S-1, S-2, and S-3.

Table 6 Expectation of the store experience from visual cues

Experience SP 1 SP 2 SP 3
expectation
Expectation of High Lowest Highest
product quality
Expectation of Middle Lowest Highest
product variety
available
Expectations of High Lowest High
product price
Expectations of staff Highest Lowest High
service
Expectations of store Exclusive Crowded Easy and comfortable
being crowded Easy and comfortable
 Table 7 Three cellphone stores

Clockwise from top left – S-1, S-2, and S-3

Table 8 Expectation of the store experience from visual cues for cell phone stores

Experience S1 S2 S3
expectation
Expectation of Identical Identical Identical
product quality
Expectation of Least Highest Low
product variety
available
Expectations of High Lowest High
product price
Expectations of staff High Lowest High
service
Expectations of store Easy and comfortable Crowded Exclusive
being crowded Easy and comfortable
 Table 9 Three sports shoe stores

Clockwise from top left –S-1, S-2, and S-3

Table 10 Expectation of the store experience from visual cues

Experience S1 S2 S3
expectation
Expectation of Highest High High
product quality
Expectation of Selective High Low
product variety
available
Expectations of Highest Lowest High
product price
Expectations of staff Highest Lowest High
service
Expectations of store Exclusive Easy and comfortable Easy and comfortable
being crowded Easy and comfortable
Attentiveness

Customers in a shopping environment are both exploring and browsing, with or without the
intention to buy. The way in which customers notice the environment around them, in these two
generic classifications, differs. A customer browsing without a shopping intention is more
exploratory. He pays attention to the big picture. His attention to specific stimuli in the
environment is fleeting. He pays attention in an unfocussed way, sees things but may not notice.
He allows his attention to shift from one stimulus to another. He may see a product on offer, a
value proposition, and will not exert himself cognitively evaluating the option. If a customer is
browsing with the intention to buy a particular product, he is in a self-directed search and goal-
seeking behavior. His attention will be focused. He will notice and pay attention to stimuli that
serve his shopping objective. If he is searching for clothing, he will pay attention to new brands
or brands he has not purchased before. His attention on other product categories will be
marginal.

Store level communication needs to be first noticed, then absorbed and understood, and then
used. In the first few seconds after entry the retailer has to grab the attention of the customer by
using the product range, variety, quality, and price by answering the initial queries of the
customer „Should I evaluate the store? Is it worth the effort?‟ The retailer has to give cues to the
customers that are noticeable (easy to see where customer eyes move in a natural manner), hold
the eyes (are engrossing), easy to understand (decode in logic of the customer), and interpret.
Table 11 lists the goals of the retailer for testing his strategy at the point of entry – location of the
display, its creativity, simplicity, and message logic. The test of the retailer strategies is how it is
understood and interpreted by customers. The deeper a customer reaches into a store is a function
of the „intentionality‟ aroused in the customers mind to explore the store searching for products
near the entrance. The intentionality evoked in the customer is a function of the shopping intent
of the customer (browsing or buying) and is also influenced by actions of the retailer.

Table 11 - Key goals at entry

Retailer objective - what Goal outcome
the customer should do
Notice Hook the customer attention
Engross Focused attention to make
effort to understand
Decipher Receive the intended
communication of the retailer
Interpret Understand the meaning of the
cues
Tests of a retailer to assess his strategy
Locate the initial display where the eyes of the
customer will sweep
Captivate through creativity of displays
Simplicity of cues
Present visible, tangible, and tacit cues in the
logical sequence of how customers choose

Hook
Customers while shopping don‟t like to absorb new information that requires deep thinking to
understand and interpret. They are prepared for a certain amount of visual and product novelty,
even if it requires effort to understand. The effort to understand the novel holds the attention of
the customer making the associated information „sticky.‟ Visualize looking at a 3D television or
handling an IPad for the first time. The cognitive processing appears a breeze because visual
elements of the product and display generate positive feelings of pleasure and happiness. Stores
induce customers to engage in search behavior by introducing „novelty‟ by using signs like „new
fall range‟ or „new washing machine.‟ Even for feature-intense technical products, like computer
or cell phone, customers often commit to the extra effort required to understand them, motivated
by the value proposition.

Information processing

Retailers use displays, signage, and products to communicate with customers using visual,
tangible, and tacit cues. The key characteristic of good visual communication is its vividness and
clarity. Signage should be bright and colorful to be noticed. Vividness makes the customer linger
and has a positive impact on information acquisition rate. The messaging should be terse, and
easily understood. It should follow the sequence of customer decision-making, enabling
immediate use. The range of products displayed at the store threshold should reflect the store
positioning in terms of quality and price ranges, and represent the product category to entice the
customer to explore the store. A moot question is whether a single display at the threshold is
sufficient to enkindle the desire to search the store in a majority of customers. To increase foot
fall it is appropriate that the displays near the threshold of the store follow the principles of being
noticed and engrossing. A second positive evaluation of products by the customers near the store
entrance ensures that the question of store appropriateness, „Is this store for me?‟ may be
answered and not evoked again.

Willingness to explore and search

Once a customer has deciphered the store at the threshold and is ready to enter deeper into the
store, he needs to become comfortable by getting a sense of the shop layout and department
locations, evoking a feeling of confidence that they will discover the way around. Customers
visiting stores develop mental maps of the store layout. A mental map consists of locations of
product categories and assortments. A mental map leads to shopping convenience because
customers don‟t have to „exert‟ and engage in „search‟ for categories. The convenience factor hit
me once when Carrefour changed the location of the categories I visit on a regular basis. I had to
exert, search, locate, and reconfigure the store layout in my mind by redefining the route from
the entrance using adjacent categories as milestones. The store maps we carry in our minds are
landmarks and directional communication. Store landmarks are the distinct merchandising
themes (the logic of contiguous departments) or the bold signage visible from afar (ability to see
the back of the store from the store entrance recognizing the peripheral departments), or visually
striking product display zones (the promotional display gondolas in the central aisles of a
Carrefour or the floor to ceiling wall of televisions). Mental maps ease the effort that customers
need to make searching for products by guiding and easing customer flow through the store.

Causes of shopping stress

At any moment during the shopping cycle situational variables can create uncertainties in the
mind of customers leading to anxiety. Imagine the feelings that arise when customers reach a
display and are unable to get the size of shoes or dresses, or the product display is poorly
merchandised, or the store staff is unavailable, or if available, are unable to answer product
related questions. A poorly merchandised display near the store entrance is „noticeable,‟ doesn‟t
engross, and creates a negative perception about the store. Similarly perceived difficulty in
„understanding‟ the store layout to move deeper into the store, and unavailability of staff or signs
to resolve the uncertainty may trigger a store exit. Shopping stress evokes a sense of
helplessness, and diminishes the intentionality that customers give to search and evaluative
behavior. If the anxiety crosses a threshold, customers may walk away. At the store entrance, as
the customers are choosing to explore the store, retailers have to eliminate or minimize potential
sources of dissonance.

The question for a retailer is how to use this knowledge of consumer behavior in the design of
the store forecourt.

How customers read displays?

The question arises how does the design of a store influence a customer? Baker et al. (2002) 8
detailed the underlying mechanisms linking store design to store patronage. Figure 1 presents the
important influences that emerged in their empirical research. Store design and in-store service
standards are the choices of a retailer; he can either make an opulent or a basic store, and can
choose to provide one-on-one customer service or on the other extreme, be a self-help store.

The decisions on different aspect of store design evoke different perceptions in customers. And
this is when the customer has only seen the store, not touched and evaluated the merchandise as
was demonstrated in tables 5 through 10.

8
Baker, Julie., Parasuraman, A., Grewal, Dhruv., and Voss, Glenn B. (2002). The influence of multiple store
environment cues on perceived merchandise value and purchase intentions. Journal of Marketing. Apr 2002; pg. 120
Visualize store design as an „expression‟ of the intent of a retailer, as a means to „create‟ an
image in the mind of customers about the brand, and „evoke‟ a feeling about the products and the
retailer. The following extract identifies three aspects of wearing Armani; the product is
characterized as „finery,‟ the product experience as „comfortable‟ and the person wearing the
dress feels „like a star.‟

… “Armani is synonymous with fashion at every level,” said Sara Forden, the Women's Wear Daily
reporter based in Milan. “At weddings even in small villages throughout Italy, it‟s not unusual to find the
mother of the bride or members of the wedding party wearing Armani.”

Most likely, those wedding guests felt that it was worth splurging for designer finery that was comfortable
and flattering, with the added value of feeling like stars when they got dressed. Conversely, Glenn Close
favored Armani because she wanted low-key elegance that would let her shine through, as a normal person.
Armani had accomplished what seemed impossible. He made ordinary people feel like stars and made stars
feel like regular folks. 9

Let is dig deeper. Consider a brand like a Rolex. At a basic level it is a watch. The persons
wearing a Rolex may have different idiosyncratic opinions about the Rolex watch. One person
may think of the inherent „value‟ of the watch. Another consumer may think of the „design‟ of
Rolex as an „expression‟ of his sophistication. A third may visualize the Rolex as an expression
of his personality; of being „unrivalled‟ like Roger Federer. He is communicating a „derived‟ or
interpreted meaning to others. He wants to be seen as incomparable. The ways of thinking about
a Rolex, the way consumers attach or attribute personal meaning from the brand‟s purchase and
consumption reflects three dimensions of how luxury brands are conceptualized. The first
dimension of the brand is functional, the physical and material attributes - what is the product,
what is it made of, how it performed, etc. - that can be objectively assessed. The second
dimension is experiential, the sensations, feelings, thoughts, and behaviors evoked by brand, the
subjective meanings attributed by the individual using the product. The third dimension is the
symbolic meaning of the brand, what the brand connotes about the person using the brand in his
social context. The symbolic dimension of a brand is the role of „brand as a signal‟ to others, to
constitute and reinforce a self-image of the person using the brand. Figure 1 summarizes the
three dimensions that constitute typology of brands. All brands can be described using these
three characteristics, and all brands appear to lie on a continuum of these dimensions.

Brands have objective and subjective meaning and value. The fact-based tangible meaning of a
brand is embedded in the product materials, features, and functionality. It is based on how the
product is engineered. Whereas the subjective and connotative meaning of a brand is construed
by the customer; it is dynamically constructed by customers through participation in a social
context. Imagine taking an Armani or a Rolex to a tribal deep inside a forest. His understanding
and experience of the brands will be devoid of meaning. He can feel the softness of the fabric or
use the watch, but will not experience the social meaning of the brand. Since the experiential and

9
Agins, Teri. (2000). The End of Fashion. Page 160-161. HarperCollins Publishers Inc., 10th East 53rd Street, New
York, NY 10022.
 symbolic identity and image of a brand is interpreted by the user, it is choreographed and
constructed - choreographed by the retailer and self-constructed by the user. The role of the
brand manager and retailer is to enkindle the desired perceptions, experiences, and the inherent
symbolism though product features, brand communication and messaging, and product
experiences at the point of sale.

Figure 1 – Typology of brands

What does
Functional the brand
value do?

Dimensions
of a luxury What does the brand
What do I feel brand communicate to
when I use the
others about me?
brand? My
Experiential Symbolic Who am I by showing
experience of
value value the brand?
the brand

So how does a retailer go about doing this? Retailers execute their strategy by creating the
subjective perception of the brand using two tactics. They use visible elements like pictures, art,
objects of beauty, and quality to evoke an aesthetic judgment in the mind of the consumer as an
„acquired‟ taste. They use ontological10 ideas; they use visible symbols to make the brand
synonymous with an imagined state or image desired by the customer. The consumption of the
brand becomes a means of becoming „something,‟ a shorthand reference for belonging to an
„exclusive‟ collection of people with shared characteristics, and a trigger for experiencing
mental events, the „feeling like a star‟ of Armani or the „invincibility‟ of a Rolex discussed
earlier.

The retail store has to become a reflection of the brand strategy. Brands have to use the three-
dimensional spaces to present the brand. Let us see how this is done. As already identified, at a

10
Ontology is the philosophical concept of the nature of being or existence.
very basic level, the visual perception in the forecourt of the store, in a few milliseconds, before
merchandise is examined, the customer must feel that „visually‟ the store is for me. Table 11
presents photos of four stores; two high-end - Hugo Boss and Anteprima, and two mid-market –
Gap and Nine West. Table 12 presents the comparison of the visual characteristics.
The first perception is of the type of overall store design. Both Hugo Boss and Anteprima
communicate a perception of being chic, sophisticated, and refined. Gap and Nine West are more
conservative and conventional. The structural elements that a customer notices near the entry,
and therefore are available to the designer are – the overall „feel and look‟ of the store, density of
merchandise, lighting, and openness of space. Once the store is operational two additional store
features become visible – density of customers and availability of staff. Let us examine the role
of each of these cues.

Display of merchandise

In a flea market merchandise is usually piled in a haphazard way on tables with no apparent
order. In an Aldi merchandise is on pallets on the floor. And the four examples of Table 11
merchandise are neatly displayed. The difference is in the structure of displays, the neatness, and
the density of merchandise.

Flea Market 11 Aldi 12

Store lighting

Hugo Boss and Anteprima have subtle lighting with an enhanced contrast of shadows and bright
spot-lights. Gap has a brighter lighting across the store but the spotlights appear more diffused.
Nine West is a very bright store with uniform intensity of lighting. In Anteprima and Nine West
rear product lighting creates a white background to frame the merchandise.

11
http://blogs.philadelphiaweekly.com/style/tag/punk-rock-flea-market/
12
http://www.4cmi.com/project_gallery.php
Openness of space

Hugo Boss and Anteprima are stores with low density of fixtures making it easier to move
around the store. The stores give a feeling of abundance of open space. Gap requires careful
navigation with a mix of display units – racks and tables. A customer will need to move carefully
around displays since the space between the units appears less than a meter. Nine West appears
to be a store with narrow walkways.

Eye-catching element

In Anteprima the stylized roof and bags hanging from the ceiling attract attention. In Nine West
the rear TV contrasts the rest of the store.

Display units

At first sight of the display units the display density of the stock becomes visible. Hugo Boss and
Anteprima appear to use customized units with low stock density. The table top displays have
very few items. Gap has high-density traditional fixtures packed with stock. The table top
displays of Gap have a higher stock density than Hugo Boss. Nine West has engineered units
with uniform stock density across the store. Bags and shoes are displaced together. Both Hugo
Boss and Gap are using mannequins to assist customers visualize the appearance of merchandise
in use.

The display unit strategy says something about the brands. If one was to articulate high-end
designer brand strategy it would be - obsess about quality, limit distribution, sell by educating
customers about the subtle nuances of the brand, which makes product what it is. They are keen
to make few exotic pieces, keep products scarce, increasing want and keeping prices high. There
is always tension in accessibility and ephemeral nature of high fashion. This is reflected in store
design. High-end designer brands plan fixtures with low stock density for exposure of the
product and catching customer attention. The table tops may just have a few single pieces (with
a lot of empty space) making it easy to examine and evaluate. The area is spacious and lighting
focused. The rear walls have just a few hangers displaying merchandise. They seem to be saying
that we have few but high quality merchandise for discerning customers.

Gap and Nine West seem to present merchandise closer and accessible to customers, everything
close at hand where it is easy to touch, unfold or open, and examine closely. The flat tables also
display lots of merchandise, creating a feeling of many choices.

From a financial perspective the positioning of the brand in terms of status, display strategy in
terms of space utilization, and pricing appear linked. All other things being equal Hugo Boss and
 Table 11 – Comparing stores

Hugo Boss 13 Gap 14

16
Anteprima15 Nine West

Table 12 – Simple visual characteristics of stores

Feature What is seen What is seen

Hugo Boss and Anteprima Gap and Nine West
Type of visual design Trendy and stylish Conventional
Sophisticated
Lighting Subtle and spotlights More uniform and brighter

Accessibility Very open and accessible store Less gap amongst fixtures needs careful
Perception of openness navigation
Display density Low density displays High density
Type of fixtures Engineered wall and floor units Conventional except Nine West floor units
Number of customers Few customers Many customers
Exclusive

13
http://www.thecdaily.com/2009/12/10/now-open-hugo-boss/
14
http://www.nytimes.com/2007/02/27/business/27gap.html?_r=1
15
http://www.anteprima.com/en/about_anteprima/history/index.html
16
http://www.danieldemarco.com/client.php
Anteprima are much more expensive than Gap and Nine West for the same product categories.
Hugo Boss and Anteprima seems to suggest that all other things being equal, for them the brand
context - the retail space - is more important. They will balance brand aesthetics (fixtures,
lighting, presentation, stock density, etc.) and the intended brand image, and charge an
appropriate price for the merchandise. Whereas Gap and Nine West are saying that have a
different balance of aesthetics, functionality, and image. They emphasize the products, focus less
on the context, spend less on fixtures and store design, giving customers‟ quality at a reasonable
price.

The intent of the retailer reflected in different constituents of the store presentation. This is seen
by customers as an image or identity of the store or brand. Over time and over many shopping
journeys customers appear to develop a tacit knowledge about the intent of retailers as
manifested in store design. Customers see the displays, lighting, products, etc. on entry but use
the visual perspective at a macro-level to reach conclusions. They see meaning in relative
emphasis given by the retailer to store aesthetics, store products, and efficiency of space
utilization (fixtures and stock density), and begin to attribute price and affordability to brands.

Figure 2 maps the process of store design at the moment of entry in a strategic way to influence
shoppers. On the left are the various design decisions that are taken by retailers. And on the right
are the store design outcomes as seen by customers. Customers see stores in terms of its
functionality, aesthetics, and meaning.

Figure 2 Retailer design decisions and constituents of store image

Fixtures and
displays

Lighting Store functionality

Space utilization
Store design Store aesthetics
Stock density

Symbolic meaning of the

Fixture density store

Store design intent and Store design outcomes

retailer decisions seen by customers
In designing stores retailers have to delicately balance two dichotomous influences; a superior
design may be perceived as a high-priced store. The Walmart redesign exemplifies this
challenge. Walmart embarked on a redesign and remerchandising exercise to provide a superior
in-store shopping experience as a competitive strategy against other stores offering similar
merchandise. The implementation of redesign manifested in declining sales performance. The
customers responded negatively to the Walmart strategy. The image transformation of Walmart
was perceived as a repositioning of price upwards. The challenge of a high-end retailer is the
exact converse; the high image retailer uses superior design to create a perception of offering
high quality and value derived from connotative meaning of the brand, even when product prices
are high. The challenge of retail design is to balance the impact of design, store environmental
cues picked up by customers, on perceptions of high price. Retailers have to use explicit
strategies to counteract the impact of high-price perceptions – Walmart reintroducing the „Action
alley.‟

Figure 3 Influence of perceptions evoked from store design and customer store patronage
intentions 17

Perception of
merchandise
price Perception of
Store service
level decisons merchandise
Perception of value
merchandise
quality
Store design

Perception of Store patronage

service quality intention

Perception of
convenience

Perception of
pschic cost

17
Abbreviated model from Baker, Julie., Parasuraman, A., Grewal, Dhruv., and Voss, Glenn B. (2002). The
influence of multiple store environment cues on perceived merchandise value and purchase intentions. Journal of
Marketing. Apr 2002; pg. 120
At the forecourt of the store, before a customer has examines merchandise, he has to take a
decision to venture deeper into the store. Baker et al. (2002)18 recognized the different
influences on store patronage intentions of customers and identified the mechanisms that linked
store design decisions to patronage intentions (Figure 3). The research confirmed that store
patronage intention of customers (extreme right in Figure 3) is influenced by four perceptions –
their assessment of the value of merchandise in the store, expectations of the quality of customer
service that they will get in the store, estimation of the time and effort they will need to spend in
the store to find what they are looking for, and the psychological cost of shopping.

Assessment of merchandise value – store ambience

Customers make assessments of merchandise value based price-quality-brand combinations. At

the forecourt of the store the customer has not examined merchandise, and his assessments about
products are influenced by store ambience.

If the products are presented in personally „agreeable‟ store environment it appears to increase
acceptability of product prices. A customer in Target was always prepared to pay slightly higher
prices for staples. And when Walmart changed its appearance, the acceptability of prices for
some customers appears to have diminished.

Assessment of merchandise value – social ambience

A retail store is a social place. Customers draw inferences from the perceived social
characteristics of retail stores - the „kind‟ of customers that are frequenting the store, the
crowding or customer-density, and the availability and appearance of store staff. If customers see
and feel that the store is frequented by „their kind of customers,‟ the store, products, and prices
are „sensed‟ as acceptable. Crowding of stores, number of people in the store, is positive when
seeking value merchandise, and negative for more exclusive products. Crowds are like magnets,
attracting some people, and repelling others, „crowding out‟ customers.

Assessment of merchandise value – service expectation

The availability of sales staff is indicative of the intention of the retailer in providing service to
his customers. If a number of identifiable staff is seen serving customers on entry, a higher level
of service can be expected, compared with other similar stores. If few staff or no staff are seen,
an uncertainty is aroused; „does the store have adequate staff?‟ Just as quantity of staff is a cue to
higher service standards, the grooming of staff, their dress sense and neatness is also a cue to a

18
Baker, Julie., Parasuraman, A., Grewal, Dhruv., and Voss, Glenn B. (2002). The influence of multiple store
environment cues on perceived merchandise value and purchase intentions. Journal of Marketing. Apr 2002; pg. 120
higher quality of service expectation. Consumers expect well-dressed staff to be more service-
oriented.

Ease of shopping and psychological costs

It is a cliché but store design is an important structural influence on the quality of customer
shopping experience. Customers use store design and layouts as a cue to develop expectations of
the time and effort they may spend shopping in the store. An uncluttered store, with clear line of
sight, no fixtures directly in the pathways, where a customer can easily understand the layout and
establish mentally his store travel itinerary makes shopping appear easy and stress free.
Uncluttered display fixtures with a lower stock density and adequate space between units, is
suggestive of easier merchandise examination. The relationship between ease of shopping and
quality of customer experience is sometimes counter-intuitive Walmart made the shopping
experience easier and lost sales. What customers are saying is that for getting „value‟ they are
prepared to sacrifice „ease of shopping.‟ In a T J Maxx customers will sacrifice ease of shopping,
take a rudimentary store layout, very close fixtures distances, because they „expect‟ to get a
bargain that will obviate the shopping „stress.‟ There are other customers who use their
perception of time and effort required for shopping and the associated psychological costs in
taking store patronage intentions. They will avoid stores where they perceive that the shopping
experience is bad (poor layout, lower service, time at check-out, etc.) without weighing the costs
against the benefits of getting quality merchandise at low prices. Whereas at a high-end fashion
boutique, where the context of shopping and the shopping itself is connotative of the brand they
want the store to be designed for the exceptional shopping experience. Walmart sells Jeans at $
9.95, Calvin Klein at $ 99.95 and Diesel Jeans retail for $ 150. For Walmart to manage store
productivity fixtures and displays have to be congested. And customers are saying that they will
„overlook‟ the design to bag a bargain. Whereas Diesel and Calvin Klein have to judiciously
manage the store design, balancing store productivity, brand image, with ease of shopping. This
is the challenge of retail design.

These are perceptions that transform into beliefs after the customer touches and evaluates the
merchandise.