Does new retail need a new prototype?
Elaine Kleinschmidt, EVP, Strategy & Experience Design, WD Partners
Through a special arrangement, what follows is an excerpt of an article from WayfinD, a quarterly e-magazine filled with insights, trends and predictions from the retail and foodservice experts at WD Partners.
The old prototype store model is obsolete. It is too inflexible and tone deaf to serve the needs of today’s sophisticated customer.
This one ideal-state design sized to small, medium or large leaves retailers stranded with anomaly stores, which are difficult to replicate, may contain un-scalable experiences and/or operational challenges posed by a lack of integration between storefront and digital operations.
Most importantly, the prototype design fails to accommodate the new reality of retail, ruled by personalized experiences, local flavor and nuance, new options in order fulfillment and service offerings dictated by what customers need for on-demand access to product de jour. Yet, for all those flaws, giving up the prototype is hard to do.
“We’re still talking about retail development through the lens of a traditional prototype. That is exactly our problem, and we wonder why it’s been so painful,” says one senior executive we visited recently.
When planning a new store concept and/or DTC growth strategy, some dynamic and tectonic shifts must be weighed that lie beyond the old prototype model’s reach:
- Product innovation
- Experiential retail
- Distribution logistics
- Localization
- Omni-technology
- Value-added services
Retail brands need a flexible set of modules to help create a strategically designed system of integrated parts and operations — to achieve synergy and scale, with both customers and their brand in mind.
Retailers can now strategically plan new build and remodel programs by evaluating both customer and business needs with market expansion and real estate strategy as key components. Brands are free to solve problems and stay locally relevant while reining in and fine tuning the costs of providing experiential retail and value-added services. Regional and cultural nuances that the prototype-store design fails to serve can be accounted for. And stores can be reconfigured to account for both clicks & bricks — as portals to and from each other.
To the customer, retail is retail. The challenge for brands is seeing themselves from the customer’s point-of-view. Brands will succeed by investing in integrated brand experience and technology strategies that map a shopper’s experience, agnostic to place, space, and time.
Discussion Questions
DISCUSSION QUESTIONS: Are traditional prototype store models no longer scalable for the shifting dynamics of retail? How may the approach to concept, design and execution around store formats have to be rethought?
Poll
BrainTrust
Jeff Sward
Founding Partner, Merchandising Metrics
Charles Dimov
Vice President of Marketing, OrderDynamics
This new thinking is terrific! Let’s make it a race; a contest. Which mall retailer can get the first testing of this thinking in place the fastest? And then scale the fastest?
Great piece Jeff! This is the type of new thinking necessary to explore future potential. Maybe another way of looking at prototypes is how they do come together. It’s not a store design experiment in a vacuum, but one that integrates design, assortment, visual and signage, technology, and training in a customer centric environment. There has to be more focus on changing the internal organizational structure to effect a seamless cross departmental effort to match the external goal of a “seamless” customer experience.
Thanks Mohamed. And I vote that it gets tested in a “B” mall. Get proof of concept at a moderate level, and then scale in both directions.
I think Elaine has really captured the problem with prototypes as we know them, and I think her proposed solution makes a lot of sense. As creative, localized and personalized experiences become a requirement for most stores in most locations, we must have both flexibility and organizational discipline to design stores that align to local shopper expectations while staying on brand. Elaine’s modular approach seems ideally suited to give retailers both the flexibility and the discipline required.
Hear! Hear! I work with a group that hosts an event for store designers and their respective suppliers. The problem, IMHO, is that the obvious missing attendees include tech suppliers and experience professionals, to name but a few. It is high time for new components to store design and this pretty much hits the nail. For my 2 cents.
Totally agree about the “new” kit of parts factor. The other thing to consider is how the performance of physical units is measured. Instead of just revenue, comps and dollars per square foot, there’s now the online sales add-on, the brand billboard/ambassador element and of course, the distribution center factor to entertain. Let’s face it, the idea of stamping out zillions of stores is long, long gone.
Other possible metrics: frequency of BOPIS, repeat of same customer BOPIS.
A cookie-cutter approach to store design may have worked 20 years ago or more, as big-box and discount retailers were building out their locations coast to coast. But the need for economy of scale is trumped these days by the need for flexibility and localization. Stores that didn’t see the physical requirements of omnichannel coming 15 years ago (and who did?) have spent a lot to retrofit locations — to make them work operationally, or to rationalize square footage, or both.
Great model. Great concept. But it is not clear that this will really change how quickly retailers deploy new systems, technologies and customer services. It is good conceptually, but the modular approach needs to also be a standard the retailer takes. On the tech side, for example, retailers need to adopt more NO CODING technologies. That means they don’t need to call in and plan for recoding their systems by consultants. Rather, their own people can be nimble and just reconfigure to the new needs. A step in the right direction.
I see this more as a comment on store layout and the use of that space for interaction. The benefit being the avoidance of heavy CapEx for an unsure outcome. One assumption we can make is that the technology mix can be changed to fit the type of store (in this modular example), but that regardless the technology itself can remain the same and to your point not need to be customized just because it’s being used in different environments.
The idea of designing through flexible modules is intriguing. For a few nail-biting retail minutes, retailers didn’t seem to know what to do with all those stores. Thankfully, the potential to modify and utilize kicked in and many have done an admirable job of refining existing locations and embracing a test-and-learn mindset. Stores of all sizes are teeming with experiments and retailers are finally in a position to harness the data being collected (often thanks to third-party partnerships). Are retailers well positioned to manage and modify fleets dominated by “anomalies”? Will this delay the perceived need for an entirely new model?
Traditional retail is grounded in a consistent and constant effort to maintain brand standards and control over all aspects from floor sets to the voice and tone of sales associates. After all, many retailers sell black jackets. The differentiator is how each brand executes its vision of the black jacket through a carefully selected choice of product attributes. I applaud the modular kit of parts concept. Creating local POV and services in a seamless agnostic retail experience enables dynamic, thoughtful interactions between associates and customers. The question, who will lead and what teams will execute each and every local vision?
The “new” store needs to convey the same brand messaging and offer all the services to address each shopper/customer – regardless of her shopping and purchasing journey. In order to know what really works and is valued the new prototype store environments need to be designed with extensive measurement tools — a measurement holodeck if you will. From this core environment, any brand can introduce innovative concepts, test them, measure them, and optimize them in a relatively short time. If they work, great. If not, change, optimize, or abandon them. The idea is to keep moving forward – innovate, test, measure, and optimize.
I love that the new prototype model uses “local POV” as a factor. It’s an important aspect of connecting with communities and driving excitement through physical retail. WayfinD’s new model is perfect for businesses that want to scale quickly.
However, for start-up and indie businesses, in certain cases I would suggest starting an e-commerce operation first to grow a customer base both online and on social media — then launching a physical operation where the largest demographic of customers turn out me be. Lots of young upstarts — Warby Parker, big Amazon, and event Showpo — are finding success with an ecomm-first game plan.
Personalization extends beyond the customer experience. Personalizing store layout, design and technology is the next phase of customer personalization. With different customer demographics and cultural nuances in each region and even within a metro area, store designs should reflect the distinctive characteristics of each store’s customer personality. Their color palate, their style, their closet, pantry or refrigerator. In a real time technology environment retailers can bring the Amazon experience to the store and match the cadence of the customer coupled with technology that varies assortments, planograms, and inventory to the market.
In this instance size does not matter but substance does.
While there may be unique differences in each store, there will need to be a core set of features and branding that reflect the retailer’s brand image.
This modular kit of parts approach is a great start – but it is a start. I would follow this with a new set of metrics to measure success that goes beyond the traditional measures of conversion rates and same-store sales, etc. It’s definitely time for a change and this model is a great way for retailers to look at how their stores are designed to serve customers. the cookie-cutter approach of yesterday won’t work anymore and the need for that restraint has passed – consumers expect more relevance than those old approaches allow.
Are the modules just a set of categories designed for small, medium, and large stores or are the modules uniques to each store? If they are the same groups of categories, the problem is not addressed. Where is the module that is unique to a specific store? The time has come for innovation that can accommodate different geographies, consumer tastes, and experiences. Modules of the same products is not flexible enough. A contest to see which retailer can come up with the most creative approach is intriguing.
The line in the article, “to the customer, retail is retail” says it all and we can’t forget that. Shoppers are bored, and retailers are frustrated, trying to quickly adapt to what the customer wants. Expects.
Each of the modules offered have promise, and I particularly like the infusion of local flavor – what sells in NYC doesn’t always go over big in Milwaukee. It’s going to take new thinking and a lot of trial and error before a new prototype is embraced by big retail, but it’s time.
“Does new retail need a new prototype?” YES! Check out my posts here since 2003. I’ve been griping about stores looking and operating basically the same for 100 years. Retailers must hold offsite leadership brainstorming sessions to clear their minds, acknowledge their target audience, define their brand identity and start with a truly clean sheet of paper to design the 21st-Century Store.
My company was founded in 1986 as a testing agency for prototype stores. 33 years later it is still 35% of our work. 46 countries and almost half of the Fortune 100 list later — retail is the dipstick of social change. What made a good store in 2005 and what makes a good one today are different — those differences are a reflection of the changes in us. Five issues.
1) Our visual language continues to evolve faster than our written or spoke word. What we see whether in-store, on-line is different.
2) The status of women, retail’s key customer continues to change. We used to sell them clothing, food and cosmetics. Today they are key buyers of everything.
3) Time is what is driving customers to e-commerce. How do we understand time? Again, from in-store to online.
4) What is local and what is global. The same store in Albany New York, Union Square San Francisco, and London England — all have differences.
5) In 2019 we need to cater to new money — which means we have to educate before we sell.
Prototyping, whether in the cyber or physical world, is about the meeting of art and science. NEW MERCHANTS and OLD MERCHANTS need smarter and more informed design.
I think this is a really interesting approach and I think a lot of retailers have already come round the to the thinking that a one-size fits all approach isn’t the way forward. We’re getting more individuality and localisation in a lot of refits, and for the digital native brands going offline quite a lot of effort goes into making spaces unique. Often this means making them feel like part of the community where they’re located. A modular approach certainly could help retailers to scale this and provide some structure for this individualism.
The retail world has changed. We can watch successful retailers work through all the issues (negative” that are impacting retail stores, malls, etc. Take lessons from those winners and don’t copy, but adapt them to your customers changing needs and expectations. By the way, do you know their needs and expectations? If you’re a struggling retailer, that may be a good place to start to move into the new reality of retail.
Interesting concept. Certainly in terms of speed at which things are changing more flexibility could provide a competitive advantage. Anecdotally on the technology front, I am seeing similar desires — for example a retailer I spoke to recently was swapping out their out-of-the-box web front end for something build in house using microservices to avoid being restricted by the vendor’s development roadmap.
I think we’ll continue to see retailers re-think their approaches to personalizing their mix of products, services, and experiences to adapt to customers’ ever-changing needs. A great example of this in the industry is Best Buy. We’ve seen a change in their layout to make “Pickup” and “Customer Service” now take a lion’s share of the square footage at front-of-store. Best Buy has done this over the last few years and worth noting have not opened a new store in close to seven years. Target as well. “Exchanges and Returns” is now the first thing you see.
Adaptation to client needs will ensure innovative retailers get rewarded for staying nimble.
Customers are craving authentic, ever-changing experiences. In this context, velocity is key. There is no doubt that modular, more adaptable prototypes that are much more likely to succeed than traditional prototypes.