The retail trifecta, Part 2: Great store layouts

The second part in my three part series on the Retail Trifecta is the creation of great store layouts: destinations that shoppers want to go to, dwell too long in and return to. Environments that are so good, shoppers tell their friends about them.

This is the part of the mix that has created some of the most amazing, and enduring, shopping environments in the history of retail. If you’ve ever walked parts of Paris, London, The Grand Bazaar in Istanbul or just really interesting farmers markets in small towns, you’ll understand exactly what I mean. You’ll also understand how difficult it can be to capture that store feel in modern suburban strip malls or giant destination malls.

Having shopped one of the biggest malls in the world, The Mall of America in Minneapolis, it’s clear that size doesn’t matter when it comes to creating a great retail experience. This mega mall tries to create an amazing shopping environment but it fails. Its own scale makes the experience impersonal and more a great expedition than a great experience. In the future, the perfect store size will matter more, but in the perfect store, smaller is better.

In the omni-channel world, smaller store footprints to showcase products, rather than act as warehouses for forward inventory, is the new beautiful.

Respected, though irreverent, retail trend guru, Howard Saunders, talks of great stores acting as “curators” of a fine, carefully thought-through selection of items – just for you. Saunders forecasts the end of huge and confusing shopper-centric trade show-style stores, tens of thousands of square feet in size, housing thousands of items. New large stores like this in the UK and US are becoming few and smaller.

The impact of omni-channel on retail space

With the advent of omni-channel retailing it’s tough to make more money from expanding your store network, unless you’re using the new stores as regional warehouses or to provide a location for nearby customers to collect their online orders.

Pompei A.D. is a New York-based retail design company that has highlighted the need for the industry to change its approach to store layouts. Pompei A.D. calls for more organic layouts, fewer straight lines, more curves, and materials and textures that graduate into each area of the store, rather than end abruptly in a straight line.

They also design stores that appeal to the 96% of shoppers who come to your store to buy your products and make them feel happy to pay for them. This is in contrast to the stores designed to prevent shrinkage via shoplifting by the 4% of shoppers who do it. Pompei A.D.’s approach is bold stuff when you see how many stores still adopt the idea of straight lines of stock lining the walls and through the centre of the store with a checkout at the end of a line.

Just as technology and algorithms have changed the way we shop by making online shopping possible, technology is also augmenting the lower physical stock level stores must carry, as well as improving shoppers’ interaction with stock.

Holographic models in high-end fashion-forward stores bring new fashions to the catwalk within a single store. There are augmented reality screens that encourage shoppers to try on clothes in mainstream clothing stores and test makeup in department stores. Fixed iPads near fresh produce allow shoppers to browse and email recipes to themselves. Near Field Communication “hot spots” allow shoppers to gather ideas, videos, prices and anything else they need, loaded directly onto their smartphone.

All this information combines to mean that the pace of change for the perfect store will be relentless. More dynamic spaces that change and entertain faster will be what shoppers want in the near future. There will be no “new” store format that every retail chain will follow, but a constant evolution of new individual formats and designs that are based on ideas, locations and shopper behaviour. Only the retailer’s branding, service, and POS/BOS systems, to keep shopper’s loyalty data and help ensure a shopper can be rewarded or assisted by the retailer.

So what does the perfect “new” store look like?

I spoke with Kirsten Drysdale from the ABC a few days ago. Kirsten grew up in small town Mackay, Queensland. As a kid there was no Myer, but there was a Myer catalogue. The same was true in small town UK, but there they had the Grattan catalogue. You choose items from thousands of items in the big catalogue and they were delivered to a tiny pick-up store near you.

So, here’s what the perfect new department store layout in a small town anywhere in the world could look like.

You know when you drive through an historic regional town and you see the large, original general store or family-owned town department store? These are generally beautiful old buildings that are gently decaying.

Well, the new perfect store in a regional town will mean that in the shell of an old, early-1900s general store, a shopper can see and shop Harrods in London, Saks 5th Avenue in New York, Myer in Melbourne, Galerie Lafayette in Paris and Nordstrom in Seattle.

A series of giant touch screen panels, fed via the NBN, could stream millions of products, allowing shoppers, via augmented reality, to try on and order items they can collect from that same little store within 72 hours.

These little regional stores will be small footprint “sales agency” stores that have as much stock available to shoppers within 72 hours as the largest department stores in the world. The old catalogue will became an augmented reality store.

The perfect store’s physical layout has been impacted by the rise of online and omni-channel retailing, more than any other part of the Retail Trifecta.

As CROSSMARK CEO, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia and across the world. His international career in sales and marketing has seen him responsible for businesses in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands.


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