|
[FEATURE STORY]
Organized for Profits
The path to retail success is clutter-free
By Maura Keller
Courtesy of Philip Morris USA |
The basic premise of a successful retail business is to provide customers with high-quality products in a convenient and accessible location. Yet once at that location, most retailers feel a need to use their store and shelf space to the maximum, hoping to provide their customers with the best product selection and most satisfying shopping experience and reap the profits. Experts say that is easier said than done, especially when it comes to small, clutter-filled retail environments. To the experts, a clutter-free environment is key.
Retail organization, they say, fundamentally boils down to deciding, sorting and storing. The key to being organized is to actually use one’s storage tools. Lousy storage creates piles. Indecision creates piles. Laziness creates piles. And piles create stress. This is particularly important when many tobacco retail customers tend to be people who appreciate the calming influence that organization can bring to their shopping experience, especially when they are interested in taking the time to discover a new tobacco blend or explore the intricacies of RYO/MYO.
In fact, the retail atmosphere greatly impacts consumers’ overall shopping experience as well as employees’ productivity and efficiency. Is the store aesthetically pleasing? Is it clean? Is it comfortable? Is it energetic? Is it quiet? These things affect the senses, which in turn affect our work performance, our shopping experience, and how we respond to our environment. And using the customer’s experience as a marketing tool is becoming more common as retailers have to differentiate themselves more from competitors.
On-the-go consumers continue to demand the most of retail destinations. Because of this, retailers often find themselves constrained when trying to offer the correct product mix within the confines of low square-footage. As a result, some retailers are unable to expand their profit centers to include products that their key demographics demand.
To address these concerns, retailers and retail management experts are turning their attention to the “shoppability” of stores.
“From the customer’s perspective, shoppability is simply how easy it is for them to see and buy everything in the store,” says George Whalin, founder of Retail Management Consultants, which provides business-building services to retail companies and industry suppliers all across North America. “From the retailer’s perspective it is how well the store is laid out and how well they display their merchandise.”
According to Whalin, a clean, clutter-free retail environment is important for several reasons. “First, consumers prefer visiting and shopping stores that are clean and well-maintained,” Whalin says. “They also prefer stores that present the merchandise in a way that best shows off the merchandise. Cluttered stores do not accomplish that goal. They are harder to shop and are not inviting to consumers.”
The basic concept of shoppability is not a new one. “For many years, the nation’s best retailers have been using planograms to focus their merchandising efforts to make the best use of the space in their stores and maximize sales,” Whalin says. “A planogram is a diagram or map of a store showing all of the fixtures and display space.” By creating this planogram, the retailer can decide where to position every item in the store based on whatever criteria he or she thinks are important. Merchandise may be positioned by brand, price point, usage, the size and shape of the packaging, seasonality, profitability, overall importance to the store or any of the things that will help position products to maximize sales.
On the other hand, there is no planning. “For many retailers the decision is easy,” Whalin says. “If they have an empty space, they simply put any item in that space that they have available. Increasingly, savvy retailers are no longer using this approach. They are using sales data and their own knowledge to position merchandise in the store to maximize sales.”
Think like a customer
This optimized merchandizing strategy is at the forefront of design firm King-Casey’s approach of systematically decluttering stores. “An optimized shopping experience is one that is designed from a customer’s point of view,” says Howland Blackiston, principal at the design firm. “Shoppability is an environment that is all about the customer. It makes the customer experience more enjoyable, easier and even more fun. When retailers get it right, they create a competitive advantage over other brands. And they develop the kinds of customer loyalty that result in increased sales and return visits.”
“A clutter-free environment is easy to obtain, but it can be a challenge to maintain,” Blackiston says. “It’s tempting to overload the customer with information. Mostly that’s because the retailers tend to think of a store as one big, single environment. ... Banners, posters, danglers, wobblers—you name it, up they go throughout the store. And we sit back and hope for the best.”
But, as Blackiston points out, that’s a sure-fire way to sub-optimize merchandising strategies and contribute to retail clutter. He notes that the most successful retailers have recognized that their stores are not just big, branded boxes. “Each store is actually a collection of many individual ‘customer-operating zones,’” Blackiston says. “Customers behave differently in each zone. Their needs and expectations are different. Each of these unique zones is right for one merchandising strategy and dead wrong for another. By identifying these zones and understanding how customers behave in each zone, retailers can craft zone-specific communications and merchandising strategies that are sharply responsive to how customers use these zones. This makes the customer experience faster, easier and more enjoyable ... and it minimizes clutter by eliminating communications and merchandising that is irrelevant to a particular zone.”
“When planning and organizing retail zones, failing to ‘think like a customer’ can lead to a hodgepodge of clutter, inappropriate messaging, and customer confusion and overload,” Blackiston says. Rather, retailers need to ask the following key questions:
- How will the customer use a particular zone?
- What information would they be seeking in this zone?
- What are the retailer’s specific business objectives for this zone?
- Is what you are providing in this zone relevant to your customers’ needs?
- Will the designs and communications you use in this zone help encourage desirable sales?
“You need to think of the store as a collection of many different ‘customer zones,’” Blackiston says. “Each zone has a unique objective. Each zone is used by customers in unique ways. And each should have its own unique strategy when it comes to communications, displays and designs.” (For a downloadable copy of King-Casey’s COZI Report, “Using Strategic Zone Merchandising to Increase Sales and Customer Satisfaction,” visit www.king-casey.com.)
How does the customer think?
Philip Morris USA recently launched a new consumer-centered category management program called insights c3m™ to help retailers market and merchandise their products in such a way as to appeal to the demographics of their particular store or market. The results include improved sales for retailers and an improved retail/purchasing environment for adult smokers.
Courtesy of King-Casey
|
As David Sutton of Philip Morris USA explains, c3m includes various research strategies, such as focus groups and in-store research, to find out what drives adult smokers to make their purchasing decisions—such things as how consumers make their brand choices and how they respond to in-store marketing/merchandising techniques.
Some of the c3m research clearly indicates that a clutter-free shopping experience is paramount. “Customers want promotions and feel they need to see organized information about product selections available,” Sutton says. “The c3m research also indicates that consumers want to easily locate brands, see organized racks and displays and have clear pricing signage that is easily discernable.” Finally, customers want product lines behind counters to be placed and organized so that they are able to pick out product offerings clearly.
To help retailers implement the ongoing strategies discerned within the insights c3m program, Philip Morris USA provides a newsletter and a password-protected Web site, which is tailored to the individual needs of each retailer and his or her specific retail location(s).
“The newsletter provides best-practice articles and category news and information that helps retailers implement consumer-centered strategies,” Sutton says. “Both the Web site and newsletter are resources that bolster support for these product categories.”
“When our retail partners succeed, we succeed,” Sutton says. “That’s why, when we share category data, research and consumer preferences, we are helping our retailers build loyalty and maximize success.”
Retailers interested in participating in the insights c3m program and accessing the retailer-specific Web site, should contact their Philip Morris USA sales representative.
What the future holds
Will retailers jump on the clutter-free bandwagon and streamline their stores to enhance shoppability? Experts agree that it’s hard to say.
“Great retailers have clutter-free stores,” Whalin says. “Retailers who simply don’t understand what customers want and expect have dirty, cluttered stores. Unfortunately, there have always been and likely always will be store owners who just don’t care.”
“When we recognize that retail environments should be designed from a customer point of view, we take a significant step toward designing a space that makes the customer experience easier and more enjoyable,” Blackiston says. |
