How do you strike the right balance between conceiving a good-looking store and the cost of creating it. John Ryan investigates.
One of retail design’s hardy perennials has to be ‘the store of the future’. Not so long ago, this meant that somewhere out there a new format existed waiting to be discovered where things would be done not just differently, but more efficiently, more profitably, and in a more customer-friendly manner.
All well and good, but Metro’s Future Store, in Rheinberg in western Germany, which first welcomed shoppers in the early years of the last decade, serves as an example of why the ‘future store’ concept is something of a defunct principle.
When it opened, the store featured scales that recognised fruit automatically and whizzy shopping carts with screens, among other things. Ultimately, however, there was something of a so-what about all of this and there is an argument that with the benefit of hindsight nothing much resulted.
What therefore is the store of the future in the current straitened economic climate and is there anything new that is gaining traction with retailers and shoppers in a way that the Metro store may not have done?
A cost-effective future
Talk to the majority of retailers and those who design stores for them and a similar answer tends to come back. The store of the future is one that will cost less to design, build and operate.
If ways can be found to create environments that do not involve quite such a heavy hit on the capital expenditure budget then costs will be controlled and shoppers will reward you with their custom as saving are passed on to them (in theory at least).
It’s simply a matter of interiors that look similar, but which in fact are not.
But as in all things that mean co-ordinating the activities of multiple parties, if only it were that straightforward. Bill Cumming, joint founder and director at Twelve Studio, which works closely with Sainsbury’s, says: “There’s no point bringing costs down if you’re destroying the proposition for customers. The same for less cost is different from a ‘cheap’ shop.”
He continues: “How do I work for less – cheaper, quicker or better quality? All of these are possible, but you can only ever have two of these. Taken to an extreme, what ends up happening is that a format becomes so cheap that something snaps for customers.”
Yet in spite of this, there is a sense that the prevailing impetus is towards store environments that cost less to build and unless you’re a luxury operator, it is increasingly an essential element in making a store’s numbers stack up along the road to profit.
Practically, however, there has to be a starting point for any savings to be made. The almost a year-long evolution of Dixon’s Black format, multiple award winner at the recent Retail Week Interiors, is a case in point. When Dixons opened its Black concept store in Birmingham last December there was one thing that was immediately apparent amid all of the fashion mannequins, Fiat Cinquecentos and dramatic lighting – this was a store that could not have been cheap to create.
The ‘playtables’ that were a major feature of the interior were made of solid wood. This required a considerable number of man-hours to construct with each piece being individually built, according to Neil Hollins, group format and design director.
Visit the recently opened Black store in Westfield Stratford, however, and while the provenance of the design is obvious, it is equally clear that change has been wrought. “You always have to accept that when you’re doing any kind of concept development you’re always going to incur a one-off cost. After that, it’s a matter of understanding what’s customer facing, because that is what’s going to earn the money,” says Hollins.
He adds that if conducted effectively, a retailer can expect to save from between 7.5% and 20%, depending on what has been done. At Stratford, this translates to a lot having disappeared from the original template, but a mildly reconfigured version of the playtables remains. The store features a “simpler set of components” where things have been “standardised”.
So much for bringing the price down, but is this a process of continuous improvement or is there a point beyond which a retailer cannot reasonably expect to go in terms of cost savings? Hollins comments: “Within a year you have worked through most of the savings that you can get and it’s then time to move things along.”
Design to budget
There is another school of thought, however, that is less about value engineering and more to do with designing to a budget in the first place. Arcadia head of design Guy Smith says: “With any experience you do develop a kind of sixth sense about what should be affordable. You develop something that is pretty close to where you actually end up.”
Smith makes the point that when it comes to “the bit that the customer sees”, most designers will have a pretty clear idea of what is required and how much it is likely to cost. “If you’re designing for Valentino, then a bit of gold-leaf might be applicable, but for most retailers the cost structure is understood,” he says.
At the highly cost-conscious end of the scale, it is perhaps a matter of both value engineering and designing to a price, however. Jake Kirkham, design and format manager at Morrisons, says that currently the supermarket has “a number of trials” taking place running from “fresh” to “lean build” and on to “project liberate”. “Fresh” is, to an extent, self-explanatory, but the “liberate” and “lean build” parts of the equation do require clarification. Liberate involves improving processes and reducing labour, while lean build targets a 30% capital expenditure saving on the cost of building a store.
This may sound like two sides of the same coin, but Kirkham is clear about the difference: “One is about the physical bricks and mortar, while the other is about labour and processes. One is like the casing of a machine [“lean build”] while the other are the well-oiled pieces that are inside it. It’s a case of tweak and go. Tweak and go. Nothing is every finished and that’s probably the same with most retailers.”
So where does this leave retailers looking to save money? Tim Greenhalgh, chief creative officer at design consultancy Fitch, says: “I think it’s about attention to detail. It doesn’t matter what you spend, it’s about attention to detail. When the dynamics of low cost mean that your operations become more important than your customer service, that’s when you’ve reached the tipping point. That’s what happened with Kwiksave when they had cardboard boxes everywhere, because they couldn’t be bothered with a reserve.”
Things do change and Primark director of store development Peter Franks says that it’s important not to lose sight of where you started. “One can guard against this happening by always referring back to original core design objectives and mood boards. Logically if the design strays from the original mood colours, textures and tone of voice, the design intent will be lost.”
It’s also worth noting Cumming’s three options for low(er) cost store design: “cheaper, quicker or better quality”. “All parties [the retailer, the designer and the shopfitters/manufacturers] have to be involved for things to work. It also helps if you’ve got scale on your side, which is why it’s easier for a big retailer than a small retailer to make savings,” he says.
Simple really, but then so is the general theory of relativity if you understand any of it.
The (low-cost) store of the future
Design to a fixed budget and take things out which aren’t essential
Value engineer a pilot store and hope that savings will result
Combine the two, but beware of tipping the scale and looking ‘cheap’