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Judging the costs of the theatre of retail

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Cluttered aisles, poor lighting, lack of product interaction and unappealing displays are all anathema to good retail.

The look and feel of a store is intrinsic to the shopping experience. It can enhance or destroy a retailer or brand’s reputation in the mind of the consumer, and tip the balance on whether they make a return visit.

Products are clearly not the only reason to go into a store anymore, seeing as nearly all goods are available online, and so traders need to entice shoppers by developing their retail theatre.

Retailers have a difficult job however, particularly at present, trying to decide how experimental to be with their shops and how much to invest in improving them.

Struggling retailers, with recent examples being JJB Sports and Clinton Cards, often launch revolutionary trial stores just as investors and analysts start to question the ongoing viability of their businesses.

These companies may have little choice than to change how they operate but with high street sales so sluggish at present it has become vital for all retailers to reassess how they set out their stalls.

“It is absolutely becoming more important for retailers to get their visual merchandising right,” argues Andy Hutt, CEO of technology company Triopsis.

“It’s so competitive, both with online and across the rival high street brands, and so retailers need to make sure they are exactly meeting their customers’ needs.”

Triposis is a fast growing business which helps brands and retailers monitor and control their in-store visual merchandise remotely through photos taken by staff, and its success shows the growing preoccupation by traders on getting their stores right.

Dixons has experimented with in-store interaction at its concept Black store in Birmingham
Dixons has experimented with in-store interaction at its concept Black store in Birmingham

New technologies have multiplied the ways retailers can physically engage their customer base, with many now believing that subtle changes in things like lighting and in-store music can result in a noticeable improvement to sales.

Mood Media specialises in matching in-store music, video and scents to core brand values and, along with acquiring waiting room music innovators Muzak, has over the last year signed deals with prominent firms like New Look, Argos and Guess to add to the work it already does for The Co-operative.

Retailers are now being sold iPads, play-tables and innovative augmented reality displays by eager suppliers, which argue that to feature the latest technology in-store is to stay ahead of your competitors.

New mobile schemes such as proximity marketing and barcode scanners are also attempts to use the latest gadgets to improve the bricks and mortar offer.

Best Buy and Apple’s innovations in sales techniques alerted all technology traders that the goalposts had moved in terms of in-store interaction, and Dixons for one has responded by having a major overhaul of its outlets.

Although the variety of ways to improve a store’s theatre of retail have increased, the resources to implement them have at the same time declined, and President of BT Global Services in the UK Emer Timmons argues that it is hard for firms to assess how much to invest.

“Companies operating on the high street are facing some of the toughest challenges of any sector during the current economic climate,” Timmons said.

“They have to prioritise their technology investment so that it delivers to the bottom line and it is no surprise something like operational efficiency comes at the top of their list.

“Ultimately they know that fulfilling customer demands leads to sales growth and increased revenue.”

It is difficult however to judge how much extra fixtures or a different type of music has boosted your customer’s experience, let alone what it has done for sales, but analysis is slowly becoming more sophisticated.

Hutt commented: “Some retailers we work with send visual merchandisers into particular stores everyday for four weeks, to ensure that these outlets are absolutely perfect everyday, and then compare trading at these stores to others in their portfolio.

“Due to its small scale this analysis is almost anecdotal but it does tend to show a percentage points uplift in terms of sales.”

The new-look pharmacy section of the concept Superdrug store in Wimbledon
The new-look pharmacy section of the concept Superdrug store in Wimbledon

Triopsis is currently working on more accurate ways to measure the impact of improved visual merchandise but it is clear that not every company has the funds to invest in revitalising their stores.

Since the economic downturn, Hutt believes firms have fallen into three groups; those which are solely focused on cutting costs and invest nothing in stores, others which are concentrating on efficiency and trialling new concepts whilst keeping costs low, and a small number which see an opportunity to steal market share by spending big.

Retailers such as Superdrug and Hobbycraft are attempting to remake their image through their stores, whereas others such as Harrods are willing to experiment with new technologies like augmented reality window displays.

Time will ultimately be the decider on whether attempts to enhance the retail theatre of stores proves fruitful for individual retailers, but Hutt advises that companies should be open-minded and flexible to new ideas.

“I haven’t seen anyone who has the balance exactly spot-on because it is so difficult to quantify,” Hutt added.

“Nobody knows quite where that line is, meaning companies undershoot and overshoot regularly, but the ones that succeed are the ones who can respond to feedback quickly.”

Published on Monday 06 June by Editorial Assistant

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