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Designing for Outlet versus Traditional Stores

BY CSA STAFF

By Tricia Downing, VP, FRCH Design Worldwide

Many retailers today are looking to bolster profits by offering merchandise outside of traditional locations. Well-known brands such as Gap, J. Crew and Disney all have been on the outlet side of retail for several years. Opening an outlet store, with its lower overhead costs, may seem like an obvious decision. For an outlet to be successful, though, its marketing mission must be well understood from the start. Plus, there are the practical considerations of different space constraints, new merchandise and more. What are the key design issues in getting an outlet store right?

Don’t go to outlets for the sake of going to outlets
In opening an outlet, you must have a strategy. Many see outlets as a salve for falling sales at traditional stores. As a retailer, you need to first think carefully about what you want your off-mall store to accomplish and a clear understanding of how to get there.

There are several key questions to ask before embarking on developing an outlet store including:

  • Is it to be a true factory outlet, or just a clearance center? Will you be manufacturing separate product lines specifically for the outlet? For example, retailers like Gap have developed completely separate lines of merchandise for their factory stores, similar in design to the products in their mall-based stores, but at a lower price point.
  • Who are your target shoppers– where will they shop and how much are they willing to spend? Are you looking to attract a whole new demographic or simply offer a new format for your current customer? Remember that an outlet may be a new channel for new shoppers, not just a shift in venue for the usual clientele. For example, luxury stores such as Saks may open an Off 5th location in a region where there are no Saks department stores, and vice versa. They determine the store format based upon the demographics of the region and their growth plans.
  • How will you ensure that the new outlet spaces do not cannibalize your brand, or at least, how do you minimize cannibalization?

See your outlet as a completely different channel from the traditional storefront. Knowing your outlet’s unique objective is crucial as it affects design decisions.

Design still matters
Careful store planning & design for outlet spaces is becoming the norm. No longer are outlet stores afterthoughts. Many such spaces today feel as if they could fit in any shopping center across the country. The main endeavor in outlet design is to balance the price point with the fixtures and finishes while working within the constraints of the location.

Outlets present unique design challenges. When creating a traditional store, you design from the storefront all the way through to the back of house. There is a retail story that covers the entire store. In outlet locations, there is typically less control of the design at the storefront; typically, you add a storefront sign and that’s as much design differentiation as you can get at the exterior. How, then, can you continue to provide at least some of the customer experience you’ve worked so hard to develop at your traditional stores?

Also, outlets today are a completely different animal than they were even 10 years ago. The centers are being designed as entertainment destinations, with an eye to keeping the customer there all day, or longer. Once there, the customer is a captive audience, but this customer is a savvier, more sophisticated shopper than ever before. It’s important that the design of the store cater to the needs of this shopper and create an in-store experience that is unique, but on-brand.

Pick and choose, to uphold the brand
To design outlets in synch with your traditional stores, it’s important to consider which elements of the store design are central to the over-arching brand and which elements are specific to format. You may be able to economize on fixtures and finishes but still replicate your brand’s most characteristic design features while keeping the customer journey familiar.

Ask yourself, in the standard brick and mortar store, what is mission critical to your brand? Key elements to consider might be:

1) Logo
2) Signage
3) Other design elements — signature colors or finishes
4) In-store technology such as monitors or point-of-sale tools
5) Lighting design
6) Floor and perimeter fixtures

Economize sensibly
You don’t have to sacrifice design sensitivity to hit a lower construction cost. You can focus on one or two focals, be it a special fixture at the entry or accent lighting at the cashwrap, and shave costs elsewhere. Retailers such as J. Crew or Disney, for instance, opt for a different lighting package and a level of finish in their outlet stores.

Generally, actual construction costs won’t vary considerably from the mall to the outlet. While not having to provide a storefront will reduce costs, the largest savings will be gained by having an overall simpler level of finish and less detail than traditional stores. Using less expensive lighting and fixture packages as well will also cut costs yet not take away from the outlet’s merchandise.

Treating an outlet as a new venture with goals and considerations quite distinct from its parent store will help you and your creative team make intelligent decisions regarding its design. Determining your brand’s most critical identifying features will allow you to keep the customer journey recognizable even as you economize on less vital elements such as fixtures, finish and lighting.

Tricia Downing is VP of FRCH Design Worldwide, Cincinnati, an international architecture and design firm.


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Tracking Tuesday with new UPS’ Kindle app

BY CSA STAFF

UPS expects to accommodate more than 78 million online tracking requests on Tuesday, December 17 thanks in part to new mobile capabilities that offer shoppers unprecedented supply chain visibility.

To cope with the volume on UPS peak package tracking day, an increasing percentage of which is originating from mobile devices, UPS introduced an app for Amazon’s Kindle Fire tablets. The new UPS app for Amazon’s Kindle Fire family allows customers to track and ship their packages, find nearby The UPS Store locations and manage shipments through UPS My Choice service, which enables consumers to reroute and reschedule their shipments for more convenient delivery. One of the newest features available for all UPS Mobile apps, including the Kindle Fire app, allows customers to log in using their Facebook account credentials, giving them one less username and password to remember.

“Residential deliveries account for more than 40% of our total U.S. volume,” said Alan Gershenhorn, chief sales, marketing and strategy officer for UPS. “There is growing consumer demand for both online shopping platforms and technologies like the new Amazon Kindle Fire UPS app, which we have designed to provide our customers with added accessibility, whether they are looking for the nearest The UPS Store or checking to be sure a much-anticipated holiday gift arrives in time.”

“We are thrilled that UPS has brought its popular app to the Amazon Appstore for use on the full line-up of Kindle Fire tablets,” said Aaron Rubenson, director of Amazon Appstore. “At Amazon, we know that customers love to purchase products online and want fast, accurate information when tracking their purchases.”

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Hershey touts palm oil sourcing efforts

BY CSA STAFF

The Hershey Company is working with its suppliers to achieve 100% traceable and sustainably sourced palm oil by the end of 2014.

The company has also achieved its commitment to source 100% mass balanced Roundtable on Sustainable Palm Oil-certified palm oil more than a year ahead of its original 2015 commitment.

“The Hershey Company is committed to continuous improvement and transparency in our sustainable sourcing efforts,” said Frank Day, VP of global commodities. “Our move to source 100% traceable palm oil is the latest step forward in our efforts to ensure we are sourcing only sustainably grown palm oil that does not contribute to the destruction of wildlife habitat or negatively impact the environment. Our sustainable sourcing programs continue to improve and evolve and progress is reported annually in our Corporate Social Responsibility Report.”

The company’s step toward achieving 100% traceability will assure that the palm oil in its supply chain is produced using the most rigorous sustainability practices. The company will work closely with its suppliers and industry experts to ensure palm oil comes from sustainable sources. Suppliers will be required to independently verify that sources:

  • Do not contribute to deforestation or the destruction of wildlife habitat
  • Do not clear high carbon stock forests
  • Do not contribute to peat land expansion
  • Operate in compliance with local laws and regulations

According to the company, the goal of these requirements is to identify palm oil producers that are engaging in unsustainable practices, work with suppliers to remediate these actions and, if necessary, remove these producers from Hershey’s supply chain.

In November, Hershey’s palm oil sourcing efforts were recognized in the World Wildlife Fund’s 2013 Palm Oil Buyers Scorecard, where Hershey scored 10 out of a possible 12 points with 12 being the highest score.

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