Branded areas have many benefits, introducing real theatre and increasing sales, but how can retailers make the most of them, asks Joanne Ellul
Walking down Tottenham Court Road, a Phones 4U logo is integrated with BlackBerry signage at its flagship to promote the retailer as the destination to buy the smartphone. BlackBerry stores are a common feature in the US, but this Blackberry zone is a UK first.
Areas such as this can help retailers to capitalise on the success of brands to increase their sales. But how do they work? Who holds the power in the relationship and why are more retailers making use of them?
Phones 4U retail development director John Welsh says: “The zone was launched to enhance the customer’s experience and to push sales.”
Demonstration and interaction capabilities of branded areas can help retailers drive sales. Demonstration is a key part of increasing sales of a product, says Richard North, managing director at toy manufacturer Wow! Stuff. The company runs branded areas in retailers’ stores including Debenhams and Hamleys and represents toy brands such as Science Museum, Doctor Who, Britain’s Got Talent and Top Gear.
North says Wow! Stuff sells 5,000 to 10,000 pieces of a typical product in a year, but when it uses demonstration videos and demonstration artists in stores it typically sells 10 times that volume.
Try before you buy
In the Phones 4U BlackBerry zone, customers can try out features of the BlackBerry smartphone and all handsets are live, unlike in normal stores, where only those used for demonstration purposes are live. The accessories range has been extended to cover all the BlackBerry handsets displayed in-store, which themselves are available in a wider range of colours than the usual Blackberry in-store displays.
To demonstrate the instant messaging feature on BlackBerrys, customers can text another person in an opposite chair and, in the audio and gaming bubble, you can listen to music and play games loaded on BlackBerrys. Digital screens showcase pre-loaded social media apps, such as Facebook and Twitter. A ‘hero bay’ features the latest and most popular models.
Interactive features mean “customers spend half an hour playing in the zone while taking a break from shopping”, Welsh adds. Not only does this enhance customers’ experience, it also helps them to engage with the product. The ‘Get to know our BlackBerry smartphone’, a touchscreen where you can move around apps, means customers can personalise their BlackBerry with the help of staff. Live handsets allow consumers to view interactive tutorials on the phone’s features.
Branded areas also enable retailers themselves to reach a new audience. Phones 4U has shop-in-shops in 12 Currys megastores and will enter at least 42 more megastores and Currys/PC World twin fascia stores. “This expands our customer base, because these out-of-town stores attract more mature customers, as they tend to be householders, in contrast to our 18 to 24 customer base,” Welsh says.
True branded areas lend themselves best to megastores, where there is space to introduce real theatre and more experiential opportunities to the shopping experience. In larger megastores, more than 100 brands can be represented.
Dixons Retail head of commercial for megastores Lee Thompson says: “Branded areas in megastores allow suppliers to get their entire range in. Smaller electricals stores will only have two to three products in a brand.
People drive 90 minutes to come to megastores, so they expect the best range and value.”
This doesn’t mean that branded areas cannot be done on a smaller scale. “As branded areas become successful, we’re rolling them back into smaller stores. We don’t have the luxury of space, so a smaller or different execution is needed,” Thompson adds.
This is part of Dixons’ wider store reformatting scheme, launched in 2008, to strengthen brand presence. Customer research prior to the launch found that customers wanted and appreciated leading electricals brands. Branded areas now feature in 12 megastores, 20 PC World/Currys 2-in-1 stores, 113 superstores and 19 high street stores.
It is easy to see why Dixons has a clear roll-out plan, as the branded areas in its stores deliver an average gross profit uplift of 20% and up to 50% in the case of Dixons megastores and 2-in-1 stores. By the end of the financial year, Dixons plans to roll out branded areas to a further 21 megastores, 44 PC World/Currys 2-in-1 stores, three superstores and 12 high street stores. One third of the Dixons portfolio, in revenue terms, was refitted by last Christmas and two-thirds will be completed by this Christmas.
The space of megastores does have its advantages, as products don’t just appear in the branded areas, but also in sections organised by price and department. “Products will be positioned
in two to three areas in-store,” Thompson says. This maximises customer exposure to products and caters for different consumer shopping habits.
Branded areas are used to add to the theatre of the store environment. Customers are excited when meeting premium, trusted brands and anticipate what they’re going to see next as they walk through the store, with branded areas acting as anchor points in-store, Thompson says.
Striking a balance
A balance between the store environment of branded areas and other sections is extremely important to customer experience.
“All brands have their own image, look and feel. Too many brands in stores create visual noise. Most retailers should look for the best brands
in the category, the highest quality and/or the best value, depending on the identity of the retailer,” says Jim Thompson, managing director of design consultancy 20/20.
In any category, one dominant brand, and at most two, could be showcased in branded areas in-store, Thompson says.
Product sectors play a role in retailers’ decisions about brand representation. “For electrical goods, the most recognised brands will be chosen and with food, high-quality brands will be positioned alongside the cheapest ones,” Thompson says.
Partnerships with premium brands can be useful to retailers. Retailers go to the supplier to get tried and tested branding, he says, and benefit from the premium attached to brands. “Branded areas help build our image and build our own relationship with brands. Dixons was first in the UK to get 3D TV and the iPad,” Thompson says.
The relationship between the retailer and brands is complicated and variable. Dixons’ partnership is different with each brand. Brands like Samsung and Panasonic dress Dixons fixtures, like its in-store demo tables, with their own branding. “It’s a very cost efficient way for both us and for suppliers,” he adds.
Apple, on the other hand, has more control over the look and feel of the 160 Apple shop-in-shops in Currys and PC World stores. Apple supplies the fixtures and fittings after Dixons has supplied it with the details of the location, size and catchment area of the store.
This control extends to the staffing levels in stores, where Dixons staff maintain the branded area but full-time Apple consultants are brought in depending on the size of the market. Training provided by Apple is available to all Dixons customer-facing staff, particularly around a new launch, but longer and enhanced training is implemented for those specialising in the computing area.
A similar set-up exists at BlackBerry with it providing training for Phones 4U store staff. All staff can work in the specialist area, and all new recruits are trained in providing BlackBerry expertise as part of a BlackBerry-sponsored session that was added to the Phones 4U training programme last year.
For appliances brand Dyson, training helps it to stand out against its competitors. Areas are staffed with a combination of Dyson demonstrators and trained retail staff. Dyson has branded areas in Currys and Best Buy, a standard for all Best Buy stores that open.
“Branded areas give us a chance to show people how Dyson is really different and better than anything else out there. And often people can only understand our technological product development through trying the machines out,” says Dyson head of retail marketing Nigel Scott.
Staff in the branded areas have to be appropriately trained to convey those differences to consumers. “Customers have questions mostly about the technology and want to get hands-on with products,” Scott adds.
Dyson launched training academies in Japan so that retail staff get a solid understanding of the technology behind the products and can demonstrate them properly. Dyson also offers in-store training days, but Scott emphasises the better opportunity of the academies away from in-store distractions (see below).
A perfectly executed store environment and specialist training can help branded areas achieve their potential.
Training Boot Camp: Why Academies Work
Brands are exploring the use of academies to provide the level of specialist knowledge and skills that can show consumers the value of their products. Dyson launched a Dyson academy in Japan, attended by 700 selected store staff who were already selling Dyson, in May this year. Each academy was a half-day, where staff were invited to visit different training ‘pods’ dedicated to different aspects of Dyson, including founder James Dyson’s story, product development, and taking Dyson machines apart and rebuilding them.
After the academy staff were qualified as Dyson specialists. 304 of the 700 staff signed up for further accreditation by taking an online exam that, once completed and passed, made them Dyson ambassadors. Pass rates for this were about 55% - making 157 of them qualified ambassadors. Videos and questions expanding on topics covered in the academy played a part here in training staff even further.
So why launch the academies in Japan? “In the Japanese market, retail staff are critical, as in Japan customers want to know more about the products,” says Dyson head of retail marketing Nigel Scott. Dyson is also considering rolling out the academy concept elsewhere.
The aim of the academies is to enable staff to become more confident, understand Dyson technology better and impart that knowledge to customers. “Anecdotal examples are credible and weighty if you can talk from experience,” Scott says in explaining the importance of staff getting hands-on with the products.
“It’s the technology that marks a difference between products. Electricals are big commitment products, that need to be robust and reliable,” he adds. Staff with specialist knowledge can help consumers make these tough, important decisions.
Using academies to run sophisticated training programmes is also a tactic used by toy supplier Wow! Stuff. Stringent testing means that only the best candidates become qualified. “Only three out of 10 initial applicants make it to the first interview stage. 70% don’t get through the first stage and about 80% get through the second ‘interview’ stage. At the final demonstration academy day [an X-Factor-style boot camp] about 80% get through,” North says.
Some 300 new demonstration artists will be added to the pool this year. The academy requires that each artist is re-tested every year before the seasonal deployment in October. The value of demonstration is catching on with Wow! Stuff launching branded areas in the Toys R Us New York flagship in the autumn.