Speaking "Design" at Retail

Featuring Paco Underhill, Envirosell; Tim Dorgan, J. Brown Agency; Jason Press, G2; Mike Pytlinski, formerly of Kraft. Reprinted from The Hub, November 2005What's the difference between a consumer and a shopper, and how can marketers make sure that their "design language" bridges that gap at retail? Tim Dorgan: The shopper is really just a more active version of the consumer. While the consumer is defined often by demographics or psychographics, the shopper is defined by behavior. For example, my wife is a different kind of shopper when she's at Trader Joe's versus Target versus Wal-Mart, and so on. Marketers can make sure that their design language bridges those differences by really understanding that consumer in the active shopping mode. They're not just sitting there, thinking idly about a product; they're in a mode to buy. The design language needs to bridge the brand itself, the marketer's brand, and the retailer brand. All of those things must come together to drive activation at the shelf. Jason Press: Design language is a tool that can be used at the point-of-decision, within the shopping environment, to do one of two things. Either it's to communicate that you've found the brand you're looking for -- because you walk into a store looking for a particular product. Or else it's to interrupt the shopping experience and give the shopper something else -- another brand -- to consider. But design language is not something that's limited to the shopping environment. It's also something that spills over quite naturally to marketing communications in general. Design language can build bridges between all communications in an integrated marketing program. Mike Pytlinski: The best way to bridge the difference between the two is to do consumer research with both. Traditionally, the brand folks have done research only with consumers. What's emerged is the need to do research with shoppers, as well. The key is to determine what reaction -- or experience -- people are having with your brand -- not only in terms of their awareness or their physical interaction after they've purchased it, but from the time they're considering it to the time they've actually bought it. The industry has moved more toward shopper research on the sales side; the brand marketers have gotten much better and savvier and more collaborative with retailer partners in terms of doing shopper research. But we haven't taken it to the next level, in terms of bridging that with the individual brand marketers. The big opportunity is to bridge the brand insights with the shopper insights. Paco Underhill: One of the key issues that a retailer has to recognize is that if they don't sell something to a shopper, then at least that shopper should leave the store better informed than when they walked in. Many shopping expeditions start as fishing expeditions -- that is, shoppers sometimes look first, and then return to buy. In a shopping mall, for example, pre-teens and young teens will often make the circuit, look around, and then return with mommy and daddy to make a purchase. You also need to recognize that the shopper's journey from the back of the store to the front may be just as important as the journey from the front of the store to the back. For example, in a convenience store, shoppers may be largely driven by thirst. So, they march to the cooler, and once they've got a beverage, they might consider other purchases. So, the store needs to be designed for customers who are moving from the front to the back, rather than the other way around. How are retailers changing from a design perspective, and what are brand marketers doing to adjust to those changes? Underhill: There are a couple of things to consider. First, the retail design community is increasingly aware that in different mission states, the "clock" in people's heads is ticking louder or softer. Therefore, ensuring that a marketer is using a retailer's store in an efficient manner is much more critical in 2005 than it was in 1995. For example, if I were running a mass-merchandise or a grocery store, I'd put my milk in the back left-hand corner; I'd want to drive the customer all the way through the store so that to get their milk they'd have to walk through everything else. By comparison, the classic Target or Wal-Mart now often has a milk fixture up at the front that allows shoppers to use the store as a convenience store if they want to. In terms of being able to market brands, one of the critical pieces has been somebody taking over as "signage czar" who is taking better control of the store as a three-dimensional information system. Part of the problem, historically, is that there has been a cacophony of signage thrown up by everybody. With in-store marketing taking on increasing importance, the design community today is spending a lot more attention on the execution of information and brand strategy on the floor. We're also seeing increasing empowerment of the divisional, regional and store managers to do a better job of tuning their stores to the customer mix that's coming in. Pytlinski: Safeway is doing a good job with their lifestyle stores. They understand their consumers in terms of what they're looking for, based on both psychographics and demographics. Meijer has done a very nice job of messaging the store for health and wellness. We've seen HEB do some great things in terms of messaging the store within different sections -- in baby care, health and beauty, and cleaning supplies, for example. They've worked in conjunction with Procter & Gamble to segment depending on whether shoppers are looking for something for babies or toddlers. Similarly, even Wal-Mart, which has traditionally been behind the curve in terms of design language, has done a very good job in some of their newer stores. Of course, the one store that really comes to mind in terms of setting a high standard is Target. They've really done a nice job of making the shopping experience easier to navigate. Retailers are a step ahead of the brand manufacturers. The brand folks are just waking up to the fact that the retailers are actually doing something with their stores, and that the retailers can actually be their partners. Dorgan: If you walk into Trader Joe's, Target or Whole Foods, there's a whole design "feel" that fits with the brand essence of those particular retail brands. Brand marketers really have not yet responded to that. It's got to be designed in such a way -- not just functionally, but graphically -- to fit in with whatever the evolving retail design language is of that store. That takes marketers into a place where they've never been before. They're promoters and they are advertisers, but they've not been forced to be designers before. It's a new area for them. Press: We've had a lot of experience in dealing with Kmart, in trying to make sure that everything we did in the way of signage and point-of-sale materials reinforced the overall positioning of Kmart. The idea was to help consumers find what they were looking for, and deliver product and information in a smart and inspiring way. When we are developing a display for Wal-Mart, meanwhile, we are reinforcing the brand's great value; if we were creating a display that was going into a Target, we would make it more style focused. Clearly, brand marketers need to try to figure out ways that their own marketing message about their products can dovetail and compliment the retailer's marketing message. What are the best research tools, at both the retailer and consumer levels, to arrive at the right language to use with different types of shoppers? Pytlinski: Probably the best technique is a "shopalong," where the consumer goes into the store, and you watch what works and what doesn't work. Are you reaching them and getting the intended message across? Try different things. It's not so much of A versus B, but A versus B versus C versus D, and so forth.That's much more of a qualitative assessment. Then, ultimately, it's about exposing them to quantitative measures to get a final read on what's working and not working and arrive at something that's more statistically reliable. But you have to identify who your key shoppers are, qualitatively expose them to a number of different stimuli, and then quantitatively measure what works best once you've whittled things down a bit. Press: You need to speak to both users and non-users of your products, and conduct focus groups to try to figure out how they view both the category, and more specifically, the brand. And you need to spend a lot of time in the retail environment checking out what's new and what's different. Dorgan: It's more a matter of looking at it in a way to link research findings to a new outcome than perhaps has been asked of that research before. It's a matter of revised interpretation -- looking at where the puck is headed. In the past you did the research so you could come up with an ad, with a promotion, with a piece of point of sale. This requires a much bigger and more strategic output. Underhill: The broader issue here is that we are still defining the nature of the "tool box" that the merchant uses to solve problems on the floor. Part of the problem is that the wrong tools are often chosen. Someone might choose to do a focus group when really they should be using some form of ethnography. Or it's somebody using a digital tracking system when basically what they need is analog systems. One of the problems within the nature of our retail culture is that generating data is easy, but making that data useful is really tough. I'd look at the current fascination with Customer Relationship Marketing (CRM) where we're collecting all of this market basket data and yet we don't see huge victories being won with it. Or, the victories are won the first time they do it, but as they continue to collect data on an ongoing basis there's a diminishing return from it. Who pays the cost to develop "design language" at retail and how do you quantify the payout? Dorgan: Retail design language, as it is implemented, is a capital expenditure that ultimately falls to the retailer. But the design part of it -- the cost of getting that retailer to a point where perhaps they have a vision of how a given department or section of the store might look -- brands are willing to pay for that because the retailer would reward them for going to the trouble of being the "design" category captain. In terms of how you quantity the payout -- ultimately it's going to be quantified in terms of recapturing customers who have left and then retaining those customers. It's always a matter of increased sales and increased visits. However, with so many shoppers migrating to Wal-Mart, a big part of the metrics will be centered on whether you can get those customers back and keep them. Underhill: The link between professional and commercial success is a little transitory; design victories don't always turn into commercial success. One of the most blatant examples is Selfridges, in the U.K., where its stores won every award possible in 2003 and yet by the end of 2004 they were firing people left and right because the stores weren't performing. Let's recognize that the appreciation schedule for retail fixtures is five years. It isn't how well the store works the first year; it's how well it functions the third or the fourth year. How fast does it get tired? The thing to recognize within the context of retail design is that everything is going to get ripped out -- the only question is when. Press: It amazes me how much money is wasted reinventing the wheel every time there's a point-of-purchase display assignment. We find that by doing the design language development up front, you actually save a lot of money downstream in the development of each individual aspect of a brand communication program. The payout is more in terms of displays that get put up. For example, Absolut is probably producing fewer materials, but the actual usage of them is approaching 100%. Very little winds up going to waste because they're providing communication materials that retailers want and will use. Pytlinski: There should be collaboration between the brands and the retailers. Unfortunately, many retailers today are not involving the brands. That's too bad because there's a lot to be gained and a lot of resources to be shared to create a win-win for both parties. The payout should be quantified as much on a baseline basis as on a promoted basis -- in terms of purchase rates, volume, revenue and so forth, versus the cost of making those changes. Both long- and shortterm costs must be factored in, as well. It will take a next generation of analytics to determine how well it's working for both the retailers and the manufacturers. Which brands are doing the best job of leveraging design language at retail and why? Press: Jelly Belly is doing a really nice job in the candy aisle. If you look at the design of their packaging, the design of their product and the point-of-sale pieces they're doing, it's really right on the mark. If you cover up the logo you would still know who the marketer is. Clearly, Jelly Belly decided to spend a couple of bucks to get it right and really invest in good point-of-purchase materials. It's not about using off-the-rack displays or tried-and-true cookie cutter approaches. It's about not being afraid to invest the dollars to be innovative. Pytlinski: It's not necessarily individual brands that are doing a good job; it's more that certain companies are doing a good job. Kraft has done some great things in terms of promotional events. For example, when we launched our South Beach Diet line, I think we did a terrific job of creating an overarching architecture of communication. In this case it was "right carbs, right fats." Then we had a whole line behind it -- all with the same color scheme and messaging. Then we carried that through not only from the brand side, but also all the way through to retail promotions, in the true sense of integrated marketing. We created an environment, both directto- consumer as well as in-store. In terms of promotional design, Pepsi has done a terrific job behind individual, big events -- be it Star Wars or football. There's a certain consistency -- a certain "bigness" to it. But at the same time there's a degree of customization, storeto- store, that works fairly well. I'd also cite Procter & Gamble, in terms of what they're doing in their promotions as well as their brands with HEB and Target, in particular. In terms of helping "message" the store, aligning brands to help facilitate that messaging, P&G is more on the cutting edge than most. Dorgan: It's really the retailers who are doing the best job -- it's the Trader Joe's and the Whole Foods and the Targets that have really captured the essence of what their brand is and driven it down through everything that is designed in the store. Whether it's the point-of-sale, the fixturing, the way the end-caps are laid out, the colors, the textures -- they're all very well synchronized to deliver against whatever that brand message is and convert it to retail design language. Underhill: Trader Joe's actually is a client of ours. Trader Joe's really is a dollar store, just better dressed, and more enthusiastically run. There are a couple others, such as Room & Board, in the housewares category. Part of what they've done is honest pricing; they've also done a great job integrating the store and the catalog. I would point also to Williams-Sonoma, which takes good-looking merchandise and makes it look fantastic. It is one of the best merchandised stores in the United States. Globally, the most successful merchant over the past ten years has been the Spanish merchant, Zara, which functions in 89 countries, and is totally vertically integrated. Zara has trained its customers so that if they see something that they like they should buy it right away because it won't go on sale next week -- it might not even be there. The replenishment cycle for many of their European stores is five days -- from the factory floor to the floor of the store. There is no U.S. merchant that comes anywhere close to that. The cutting edge of retail design is no longer in North America. It's elsewhere. And that's because we're in a place where money is getting progressively older. So where is money young? It's young in Mexico City, Brazil, Russia, Dubai, Bombay and Shanghai.

Speaking "Design" at Retail

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