Retailers are faced with some tough choices at the moment and retail design may well be low down on their list of priorities. But can they afford to do without it? John Ryan and Laura Lupton report
As store groups fold and profits plunge, you might be forgiven for thinking that store design would not be among the most pressing priorities for retailers trying to figure out what their next move should be.
After all, consider the facts. Design has a tendency to be costly, both to buy and to implement and there is no guarantee that it will pay its way in the present climate. On this basis, surely the best thing is to close the store development department until such time as the corner is turned, the bottom is called, or whatever other signal is given that will indicate that demand is on the upturn?
This is certainly one way of dealing with things, but the actions of retailers at the moment seem to demonstrate that while there is a keen awareness of the price of revamping stores, it’s something that just has to be done. Tamar Kasriel, director of trend consultancy Futureal, says: “Just being vaguely nihilistic about the whole situation is not actually constructive.” She says that in a recession, making a connection with the customer is even more essential than during good times and that the tendency at the moment to paint things in a rather black and white manner is not helpful.
So battening down the hatches is not the kind of thing that is likely to get results and as Kasriel points out, at some point conditions will improve and retailers have to wonder whether customers who have traded down will actually come back. On which reckoning, store design has to be a central tool in the battle to maintain loyalty, but can it be done when funds are limited?
QS Group chairman and chief executive Finlay Caldwell says that creating new retail environments need not break the bank. Last year, working with design consultancy Dalziel + Pow, Caldwell oversaw the conversion of a number of QS stores into a new fascia dubbed Store 21. The stock was still at the value end of the spectrum, but the interior flattered to deceive by presenting shoppers with a store that was a good deal more upscale in appearance than the prices on the garments might have suggested.
“Store 21 has been successful because we have created a good shopping experience on a tighter budget. We have added value to the product in this way to make it desirable,” Caldwell explains: “My advice to retailers would be design what you want in terms of lighting, flooring, etc, and invest in good quality design as this will often help manage the cost. We cost-engineered the look [in Store 21 branches] to achieve a high level of design. In the downturn, design expenditure has been cut right back, so retailers have to differentiate themselves. This may include focusing on in-store communications rather than thinking about complete redesigns.”
All well and good perhaps, but it’s worth bearing in mind that while this may be a good design for its market, Store 21 operates in fashion’s lower echelons. This means that vinyl floors and fake wood walls for the homewares area are acceptable – and indeed look better than what others in the sector have.
Evolution, not revolution
This does not, however, mean that mid-market players – where most of the difficulties are being encountered – should behave in the same way. Jeff Kindleysides, co-founder of design consultancy Checkland Kindleysides, says that retailers need to be clear about what they want to do. “I think there’s a mixed picture at the moment. We are still doing long-term projects and clients are looking for designers that are not trying to completely reinvent the store, but to analyse what is working and what needs to go without making significant changes,” he says. Retailers, he explains, are looking for more regular change, where a quick turnaround can be effected without incurring large costs.
Practically, this probably means that all retailers are looking at graphic treatments rather than store environmental changes. Gregor Jackson, a director at consultancy GP Studio, notes that retailers “want to spend less on the budget, but want the same results. This drives designers to be more creative with solutions that will work. There has been a move within retail to focus more on in-store communications”.
This is part of the approach being taken by Dalziel + Pow creative director David Dalziel, which numbers many mid-market retailers, including River Island, JD Sports and Next, among its clients. “We are exploring a few directions we have been calling ‘high design, low investment’ – how to spend wisely on things that make a real difference. This means more emphasis on visual merchandising and graphic treatments in-store to refresh an identity without the full cost of traditional shopfitting,” he says. Dalziel also points out that good store design is a little often, rather than a lot infrequently. “Effective design is a moving target, not a short-term solution,” he says.
Fitch chief creative officer Tim Greenhalgh broadly agrees. “We have noticed that big brands are using their advertising budgets to make significant changes to the store and changing the in-store experience, concentrating on in-store communications, to which the consumer will think ‘wow’ and be drawn back,” he says.
He does, however, inject a note of realism. “To be honest, in the States they are stopping budgets completely, not just reducing them. They have said to us, stop the work and we will talk again in X number of months. This is obviously not so good for us and we haven’t experienced it in the UK, but predict we will.”
So where does this leave retailers as far as improving the appearance of their stores is concerned? Campbell Rigg, managing director of the London-based design consultancy of the same name, says: “By investing in low-cost design, say £30 per sq ft, retailers should be able to continue to develop fascias and in-store environments, while keeping a close rein on additional spending. Large-scale redesign is not reasonable now. Low-cost branding, graphics and lighting are top three on my list, and by graphics I don’t mean more promotional material.”
“I was recently with the marketing director of one of the large retail groups, it has more than 700 stores in the UK and lighting was among her top in-store priorities. It’s unusual for a marketing director to be thinking lighting, but at the same time it’s elementary to creating atmosphere.”
Argos, one of the retailers Rigg works with, certainly appears to set store by good and cost-effective lighting.
By all accounts complete makeovers will be few and far between this year, but for those with sharp eyes, steady in-store changes will be apparent. Little and often still, ultimately, amounts to keeping things fresh. Almost all of the retailers that are weathering the storm are united on one thing – do nothing and you may not be part of the retail landscape in 2010.