The Last Mile - Crossing the Threshold
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Transcript of The Last Mile - Crossing the Threshold
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about it. His ease of engagement with the merchandise is determined by how it is displayed. Thecustomer can also acquire knowledge about the product through interactions with store staff.
Therefore once the customer is in the store his shopping behavior is influenced by a more
tangible „engagement‟ with what is around him, increasing the tactical choices available to
retailers to stimulate buying behavior.
To put this knowledge to work it is necessary to link the actions of retailers to in-store consumer
behavior by identifying the mechanisms at work. Deconstruct the retail environment in three
dimensions; product-related (the product categories, and their variety), space-related (the product
displays and signage, how customers can move around the store, and how goods move from
delivery to shelf), and people-related (how customers engage with retail staff in the store). A
retailer can act on any and all these dimensions to engage with customers. The outcome of
retailer actions can also be evaluated on three criteria; their functionality, their contribution to
aesthetics, and their role in creating an ambience. The functionality of design refers to the
effectiveness of the retail environment, assessed on how it enables increasing conversion of
customers to shoppers. Design achieves this through product-presentations, customer in-store
routing (guiding customers reach different parts of the store), displays (assisting customers
notice and examine merchandise), signage (enabling customers acquire knowledge to ease
buying), and the actual buying process itself (its ease and efficacy). One aspect of store
functionality, often ignored, is the ease of merchandise replenishment, the flow of merchandise
from store delivery to shelf. Shelf availability is an important retail challenge, a cause of lostsales, reduced customer satisfaction, and store loyalty. In store, the last ten yard supply chain
bottlenecks often hamper material flow through the store to the shelf. The aesthetic elements of
the design encompass the features that make the store attractive making it pleasant and
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The feeling that a particular store is an option to be considered to find desired merchandise is
evoked in the mind of consumers when initial examination of products in the store suggests that
the product variety, quality, and price appear to be „suitable.‟ This feeling is enkindled when a
customer examines a few products that „establish,‟ „create‟ or „reinforce‟ a benchmark
Table 1 – Connecting designer actions to outcomes
What design
achieves
What designers use ↓
Functionality Aesthetics Ambience
Products Display efficacy
Displays to enable
noticing, reaching,
understanding and
evaluating products
Appealing quality of
visual displays
Setting of the displays
to evoke meaning of
intended store
ambience
Space Space utilization for
efficient store layout
Material flow in the
store
Directional elements
Graphic and visual
elements
Filled displays
Music
Temperature
Color
Lighting
Displays and signage Efficacy of displays
and signage to matchcustomer choice logic
Visual merchandising
MaterialsColors
Colors
Lighting
Staff Customer service Staff uniform and Service quality to suit
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quality-price is reinforced by a second engagement with products, you will stop evaluating the
„suitability‟ of the store to fulfill your needs, and continue browsing. Once a customer enters the
store the functional aspects of the store become increasingly important because they determine
how well the store „works‟. The aesthetical and the ambience related aspects remain in the
background forming the backdrop of the shopping experience. The browsing behavior, the way
customers actually behave inside the store, is an indicator of their comfort in the environment,
the ease of shopping, finding the right products, and quality of service. The success of a retailer
requires considerable more attention to detail at each stage of the customer journey in the store.
The retailer has to identify locations in the store that customers will notice and then create
displays on those locations with messages to communicate cues that they can easily understand
and interpret. He has to continually reinforce customer perceptions about products and their
variety-quality-price developed both outside and inside the store, and enabling them make
commitments to search and shop.
This entire process takes place in seconds. The attention of the customer quickly shifts from the
store façade to other visual signifiers that could be images, graphics, fixtures and fittings,product displays, product packaging and other product level communications. From relatively
few dimensions of the store façade (structural, affective, and symbolic aspects) many tangible
and intangible factors now begin to communicate meaning to customers, and the consistency of
the different cues becomes important. Retailers need to pay a great deal of attention to different
store level cues. A customer inside the store is absorbing and interpreting information from
multiple sources. All the cues need to be attractive, consistent and relevant for customer choice
making. The number of cues, if executed with care, reinforcing the messaging, is an opportunityto ease customer experience in the store by enabling choice making. Walmart executed a major
repositioning in 2008, implementing changes in its category strategies expanding and contracting
d t i t d li t d it POS di l d i W l t t l h d
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For us “save money, live better” in store …is about price presentation…as you walk into our stores, we are
making a very loud, bold price impression as we go forward.
…substantial price advantage for people who are looking to save money. Same products, lower price.
And…a good and getting better shopping experience. 1
In a September 2009 story Time magazine ran a story titled „Walmart‟s Latest Move to Crush the
Competition.‟ It presented a store level perspective of the intended changes, seen from the eyesof a senior operating staff.
… the company is in the beginning stages of a massive store and strategy remodelling effort…dubbed
Project Impact... goal of Project Impact is cleaner, less cluttered stores that will improve the shopping
experience…
…One …weekday afternoon I toured a brand new, 210,000-sq.-ft. Walmart in West Deptford, N.J., with
Lance De La Rosa, the company‟s Northeast general manager. “We‟ve listened to our customers, and they
want an easier shopping experience,” says De La Rosa. “We‟ve brightened up the stores and opened things
up to make it more navigable.” One of the most noticeable changes is that Project Impact stores reshape
Action Alley, the aisles where promotional items were pulled off the shelves and prominently displayed for
shoppers. Those stacks both crowded the aisles and cut off sight lines. Now, the aisles are all clear, and you
can see most sections of the store from any vantage point…
…And the discount price tags are still at eye level, so the value message doesn‟t get lost.
“They are like roads,” De La Rosa says proudly. “And look around, the customers are using them. We‟ve
already gotten feedback about the wider, more breathable aisles. Our shoppers love them.” 2
Intended changes in the merchandising strategy called “Win-Play-Show” was based on achievingconsistency in all possible customer contact points – product variety, displays, and messaging.
Win-Play-Show is really a merchandising strategy … In a “show” category, the company carries fewer
SKUs than it has in the past. A “show” strategy is a defensive approach that limits product selection but
does not cause a buyer to go somewhere else for a product. In “win” categories, price leadership is deemed
b l t l iti l l ith h i d d ll iti d di l i th t Thi
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putting customers off.
As Howard Davidowitz…told the Columbus Dispatch, “They can‟t appear expensive. It‟s got everyoneconfused.”4
The reduction in product variety was experienced by some customers as a „frustratingexperience‟ not the traditional image of a big-box retailer who is expected to have category
width and depth.
“If I go to Wal-Mart, I expect to find almost anything,” Abella said. “Reducing inventory makes thingsleaner and meaner, but it‟s also very frustrating when a big box does not have what you want.” 5
Self-reflection and learning by Walmart
In March 2010 Walmart, cognisant of declining sales over three successive quarters, admittedthat the changes were a self-inflicted wound, taking decisions to reverse many of the changes.
“Self -Inflicted Wound”
… Walmart, which is one of the few retailers that saw same-store sales rise for eight consecutive quartersduring the recession, suddenly experienced sales declines. At stores open for a year or more, sales fell 1.5%
in its second quarter, ending July 31, 2009. Third-quarter sales dropped 0.5%, followed by a 2% retreat in
the fourth quarter.
… Walmart is dialing back. On Mar. 10, COO Simon said the store is reintroducing 300 of the items that
were removed. Dubbing the remodel process a “self -inflicted wound,” Simon said at a consumer
conference: “The traffic decline in the Project Impact remodel stores during the remodels is deeper than we
projected it to be. It‟s responsible for some of the traffic and some of the sales decline as well.”
“Inaction Alley”
One of the key Project Impact moves that hurt Walmart …was the decision to clear out “Action Alley,”
which is the main aisle and primary traffic corridor that separates various departments in supercenter stores
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He synchronizes different aspects of the store as a retail theatre for functionality and aesthetics
through the senses (figure 2).
Figure 2 the three aspects of retail store design that need to be
synchronized
In design of retail stores all these three aspects of design come together. Retail design has three
objectives. It focuses upon store appearance as a means of differentiating the store versus
competition. The creation of an aesthetically appealing store through design is a means of value
enhancement and possible differentiation within the market. The design of the store is a means to
attract customers. And once customers are in the store, they need to become shoppers. Design
must enable conversion, or selling. Application of creative skills within the store is a means of
Store
aesthetics
FuntionalityEvoked
emotions
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Each stage of the customer journey has the potential for retailer and customer engagement. The
customer is out shopping with an intention to browse or shop. This need creates an opportunity
for the retailer to engage and interact with the customer. Each location of the customer is like an
„act‟ in the „Retail Theater‟ for which the retailer can write the script and device a screenplay to
choreograph interaction with customers. Effective execution of this strategy requires the retailer
to map the steps of a customer journey, identify and understand customer needs and motivations
at each location, and then, using products, fixtures and displays, signs, graphics, and staff,
strategize to engage, communicate with, and assist the customer. The table 2 presents a working
tool to assist a retailer analyze, plan, and execute this strategy. The horizontal row details the
sequence of thinking required. It begins with identifying the customer location and delineating
their important needs and motivations. The third column describes the retailer goals and
objectives. With the context (location and customer) and retailer goals defined, the execution
details, column four, can be planned and detailed. This is an exhaustive process, requires
painstaking attention to detail, and asking the following reflective questions to make the store
design effective.
1. How does the store design accomplish gathering, holding, and focusing customer
attention? It is necessary to „engage‟ or „hold‟ the attention of the customer and
not allow it to „float‟ over the panoramic perspective of the store façade, entrance,
or a category department. The ability of a retailer to nudge and direct attention of
a customer, so that it appears natural and not contrived, is a factor in achieving
design effectiveness.
2.
What is the „most likely‟ psychological state of the customer at this stage of his journey? Customers in a store can have a wide spectrum of expectations and
uncertainties in a store. The emphasis is on „most likely‟ psychological state.
Retailers need to identify and prioritize the most probable state of mind from the
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8. What is the role of staff in the engagement and customer journey? Does the
customer requires assistance, or prefers self-discovery?
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Table 2 – Table to enable retailers strategize to engage, communicate with, and assist the customer
Customer
location
Customer
needs and
expectations
Retailer goals Engagement with the customer What to
avoid
Gather attention / hold the attention / focus the attention /engage / information needs
/ communicate
Outside the
store – in
the mall or
high street
Is this store for
me?
Image and visual
identity
commensurate with
target customer
Signage
Material
Windows
Lighting
Store design in perspective
Outcome
Evoke feeling of comfort
Mismatch
positioning
vis-à-vis
evoked image
Window Does the store
have what I am
looking for?
Within the
limitations of space
highlight thepositioning of the
store / brand and
induce entry
Criteria to plan and assess the display
Planning the display
Identify what to display and how – will it engage and holdIdentify the visual message based on thought and feeling to be evoked
Graphics should reinforce product in use imagery
Identify the category / product / feature and price message to be communicated –
will the message be easy to decipher and understand
The how of the execution – colors, lighting, features, props, etc.
Outcome
Evoke interest to enter
Dissonance of
message
Store
threshold
1. Reconfirm
that the choice
to enter is
correct –
product variety,quality and
price match
expectation.
2. Visualize
product in use.
1. Welcome the
customer
2. Hold the attention
of the customer and
allow the customerassess the quality and
price.
3. Direct customer
and eyesight so as to
attract and pull
customer inwards.4. Confirm key
customer choice
criteria to reinforce
quality and price.
The threshold display of products have to hold the customer attention
Communicate the message product variety, quality and price
More focused than the window displays
Planning the display
Identify what to display and how – will it engage and holdIdentify the visual message based on thought and feeling to be confirmed
Identify the category / product / feature and price message to be communicated –
will the message be easy to decipher and understand
The how of the execution – colors, lighting, features, props, etc.
Graphics should reinforce product in use imagery
OutcomeEvoke commitment to spend time evaluating products
Dissonant
experience
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Walkway 1. Where to
find the
products?
2. Easy to find
1. Easy to find
2. Expose the
customer to different
categories
Signage
Directional signs
Search
behavior not a
cause of stress
Category 1. Product
variety isavailable
2. Browse and
search
1. Product variety
arranged to enablesee range.
2. Signs and staff to
assist.
The displays of products should present the product variety, quality, and price to
develop a scale in the mind of the customerPlanning the category display
Identify the visual message based on thought and feeling to be confirmed
Identify the category / product / feature and price message to be communicated
The how of the execution – colors, lighting, features, props, etc.
Graphics should reinforce product in use imagery
Dissonant
experience
Product
displays
Evaluate
products and
compare
1. Ease the process of
engaging with
products.
2. Product variety
arranged to enable
see range.3. Logic of display to
match choice
behavior.
4. Signs and staff to
assist.
Planning the product display
Identify the product / feature and price message to be communicated
Easy to touch and feel
The how of the execution – colors, lighting, features, props, etc.
Graphics reinforce product in use imagery
Staff to clarify doubtsProduct trial
Outcome
Induce buying
Dissonant
experience