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Store Planning and Design: Enhancing the retail experience

BY CSA STAFF

The store planning and design workshop track at SPECS/2007 provided an in-depth look at the latest in store design trends worldwide, as well as advancements in lighting and the “green” movement.

Industry veteran Joe Weishar, president, New Vision Studios, New York City, kicked off the track with, “Around the World in 60 Minutes,” an in-depth and entertaining look at the latest in visual merchandising and presentation techniques from around the world.

From the great Catalan architect Antonio Gaudi in Barcelona, Spain, to the Louvre-inspired Apple Store on Fifth Avenue in Manhattan, retailers can take inspiration from some of the world’s most dynamic exteriors to bring fresh ideas into their own stores, Weishar said. The “wow” factor doesn’t exist solely on the exteriors, he added, but also comes from within.

“The ability to communicate what merchandising presentation can do for a customer is very important,” Weishar said. “I’ve seen great opening presentations that have fallen flat within the second or third month because they didn’t know how to maintain it. Focusing on how to make the store exciting will make customers return.”

For the H&M flagship in Manhattan, the wow factor lies far beyond its dynamic structure. It also has to do with its constantly changing merchandise displays, particularly when it comes to its key items.

“They had so much action on those items, they decided to change their key areas every hour,” Weishar explained. “They did this by keeping their departments shallow, so you didn’t have to penetrate rows and rows of merchandise to get to the wall. They didn’t overwhelm the customer with quantity, but rather overwhelmed them with variety and changing merchandise. They understood how their shopper shopped.”

Color: In another session, “Color My World—Color Trends,” Leatrice Eiseman, color specialist and consultant to Pantone Inc., discussed the importance of color in the retail environment.

“Just as in residential interiors, there is a need in contract furnishings to integrate classic hues while recognizing that the clever use of color can reflect the more complex world of paradoxes and parallels,” she said.

Eiseman predicted that various shades of browns will continue to be a hot color trend. Although brown has been matched with colors in the blue-green family in recent seasons, it will soon be paired with greyer blues, she said.

Additionally, Eiseman expects to see brown in combination with hot pinks and fuchsia tones over the next few years. The use of brown, black, white and green in high-end stores will continue to convey elegance, with white-on-white also becoming a dominant trend.

Eiseman anticipates the upcoming winter 2007-2008 season will reflect inspirational themes that address change, mutation and transformation. The concept expresses the craving for simplicity and moderation, she explained, yet an always-present creative need for fantasy and escapism.

Sensory design: In a double session, “Emotional Design: 5-Senses Experience,” speaker Linda Cahan took color to the next level to explain how the senses evoke an emotional shopping experience. The session gave attendees the opportunity to participate in an interactive roundtable activity. Each table was given a white-box model and was asked to apply subliminal and direct emotional design techniques.

Cahan explained that in addition to the five senses, feel/vibes, expectations and memory contribute to the shopping experience.

“Repetitive brand images are a really powerful stimulation of memory,” said Cahan, principal, Cahan & Co., West Linn, Ore. “The Home Depot does it over and over again with its color repetition, logo, shape retention and consistency. The more geometric it is, the better it is remembered and retained.”

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Cahan encouraged retailers to create a specific scent for the store, with emphasis on food aromas rather than floral ones.

“We retain odors in our memories more than any other stimulation,” she said. “Pleasant scents encourage shoppers to linger over a product, increase the number of times they examine it and, in some cases, increase their willingness to pay higher prices.”

Taste, which Cahan called the most ignored sense in non-food stores, helps memory retention. Offering a piece of hard candy or chocolate, for example, can create positive memories for shoppers, according to Cahan. Other aspects that might make or break a shopper’s memory of the experience are service, pick-up and delivery, and phone attitude.

Other sessions: In “See the Light,” Charles K. Thompson, president, Archillume Lighting Design, Austin, Texas, discussed innovative and practical lighting solutions for retail design. He stressed that store lighting will change as environmental preservation efforts gain momentum over time.

“With that, lighting will become more complex and more specific than what we’ve dealt with,” Thompson said.

Green design took center stage in the session, “How to Go Green and Not LEED Your Company to the Poor House.” Speakers Maureen Scanlon, from Austin Energy Commercial Green Building Program, and Sheila Morales, architect and LEED Team Leader, HEB Planning & Design, HEB Grocery Co., gave a comprehensive overview of an HEB supermarket in Austin, Texas, that incorporates many leading-edge green features.

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Weekly Retail Fix

BY CSA STAFF

THE NEWS: SAM’S REALIGNS STORE-LEVEL MANAGEMENT

BENTONVILLE, ARK. Sam’s Club is changing the management structure in its stores. In the realignment, approximately 250 positions will be eliminated, Wal-Mart Stores announced last week. The company said it’s replacing five lower level management positions at each Sam’s Club location with three new higher level and higher paying assistant manager positions.

“This is not a cost cutting effort. We expect a slight increase in payroll upon completion of this change,” said Sharon Orlopp, senior vp of Sam’s people division.

THE FIX: Differentiation would better help Sam’s

Since Sam’s decided that its refocus on the business customer was too narrow, it has sought to find ways to make its clubs more attractive to primary shoppers, i.e., women. And that’s a pretty tough row to hoe, as Costco has done a pretty good job at satisfying the club customer in general and BJ’s has been going after female shoppers for several years now, with some success.

Having fewer managers with more direct responsibility could create a tighter knit club-level management and shorten lines of responsibility and accountability. Yet, without differentiating the offering, execution isn’t going to overcome all of Sam’s challenges.

That being said, a store-level management realignment might be overlooked at other retailers, but, this being Wal-Mart, everyone has to make a big deal about it. But that’s the price you pay as the big guy on the block.

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Weekly Retail Fix

BY CSA STAFF

THE NEWS: TOYS ‘R’ US EARNINGS GAIN 40.1%

WAYNE, N.J. Toys “R” Us today posted net earnings of $199 million for its critical fourth quarter, which meant it turned a profit for the fiscal year ended Feb. 3. But special charges and gains had an impact on its numbers.

Sales for the previous fiscal annum were $142 million, the difference translating into a net earnings increase of 40.1% year over year. For the last fiscal year, Toys “R” Us posted net earnings of $85 million versus a net loss of $384 million for the previous period.

Operating earnings in the fiscal 2006 fourth quarter gained 53.1% to $571 million versus $373 million for the fourth quarter of fiscal 2005. For the last fiscal year, operating earnings were $649 million versus an operating loss of $142 million for the previous period.

THE FIX: Improved shopper experience ups comps

Of course, any observer has to take into consideration special financial circumstances. Fiscal 2006 operating earnings were positively impacted by $96 million from gains on property sales, slightly offset by restructuring and other charges. In fiscal 2005, operating earnings were negatively impacted by $410 million in costs relating to the merger of the company, as well as $58 million of costs and charges relating to contract settlement fees, restructuring and other charges.

Still, sales were trending up at last year’s end. Net sales gained 15.8% to $5.7 billion. In the full fiscal year, net sales advanced to $13 billion, up 15.2%.

Comparable-store sales for the Toys “R” Us’ U.S. division gained 0.6% in fiscal 2006, and that represents the division’s first comps increase in six years. Comps at Babies “R” Us were up 4.8% and those at Toys “R” Us international were up 2.6% for the fiscal year.

Jerry Storch, chairman and ceo of Toys “R” Us, said the company is “pleased with the strides we made in fiscal 2006 to improve at all levels of the organization and reposition the company for profitable growth over the long term.”

He said the company’s new management team has been focusing on executing a strategy that would turn the retailer into a global toy and baby products authority.

“This translated into higher overall sales, positive comparable-store sales, improved gross margins and strong operating earnings growth for the 2006 fiscal year,” Storch asserted. “The key to our strategy has been improving the customer shopping experience in our stores. We are accomplishing this by delivering a more compelling merchandise selection, better service and a cleaner and more comfortable shopping environment.”

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