Designing the Next Generation of Retail Places (Part 1 of 5)

Jan 09, 2012 — Alen Puaca

I think we are most interested in the idea of shopping as a new kind of public space. How can we enrich these experiences? Can we bring new content, information, ideas and visual experiences to shopping in a thoughtful and dynamic way?

I believe the above quote, from New York City-based design studio 2x4 Inc., defines the direction in which new types of physical retail locations must go.

The entire retail industry has already experienced a tectonic shift due to e-commerce, mobile apps and social networking. Brick-and-mortar retailers, cognizant of the increased competition from virtual retail, must undergo a similar transformation, but of a different nature.

More and more customers come to stores, check out a product, and then place the order. Unfortunately, the order is often placed via smartphone, with a different online retailer than the store the customer visited, at a lower price (see Amazon Price Check App). How can retailers compete with that? What else can a retailer offer to a customer, that is different from a massive warehouse or an e-commerce site? 

The answer is in redefining the purpose and philosophy of a store. At the most recent iQmetrix Wireless Summit, Doug Stephens offered his view of the 21st Century retail location, whose role shifts from being the end of the marketing/distribution channel to becoming the start of the channel.

The days when the physical store was the sole transactional point-of-sale are behind us. Today, the focus is on customer experience: creating excitement and inspiration, invoking social engagement, offering a relaxing experience through the use of design elements in the space, and providing interactive tools, personal communication devices and friendly staff. These spaces not only build a loyal customer base, but loyal and motivated employees as well.

For most stores, moving from a transaction mind-set -- “how do we sell more stuff?” -- to a value-creation mind-set will require a complete overhaul.Ron Johnson, J.C. Penney CEO and former senior VP of retail at Apple

High-tech device manufacturers are indicative of the customer experience trend -- they have increased their physical store presence in spite of having the necessary distribution channels for their products. The Apple Store, ranked #1 in customer service since it opened, leads the way. Microsoft has followed suit (see photo below), and other hardware manufacturers have too, but so have purely online retailers like eBay or Amazon

Google recently opened its first Chrome Zone store in London and another big Androidland store in Sydney (with carrier Telstra). Online retailers are starting to realize that meeting customers face-to-face -- and offering a unique experience and relationship in addition to effective shopping -- is crucial to developing brand awareness.  

The next four articles of this series will examine the underlying principles of creating a successful retail place. This is not referring to aesthetic design, but rather to conceptual, functional and organizational aspects. These articles will focus on physical locations, the in-store part of the retail process. Of course, in-store cannot be analyzed without out-of-store and online parts, so the latter two will be dealt with in the context of a specific topic.

First, we'll take a look at the qualities that turn a physical space into a public place. Next, we'll examine the guiding principles to creating a place, and what are the specifics of a retail place. Last but not least, we will analyze the tools and summarize the checkpoints that can help retailers to create the next generation of retail places.  

Once retailers are brave enough to let go of the idea that their stores are solely places of transaction, they can focus on giving customers a rewarding experience. FITCH

Next: Part 2 of 5 - Qualities of Successful Public Places
Part 3 of 5 - Guiding Principles of Place Design
Part 4 of 5 - The Basic Areas of the Retail Environment

Part 5 of 5 - 5 Checkpoints for Next-Gen Wireless Retail Places

Topics: Retail Operations, Wireless Trends, Mobile Industry, Customer Experience, e-Commerce, Retail Marketing

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