Visual Merchandising: A holistic approach

Visual merchandisers, the ‘creatives’ in the retail industry have their challenges, when the CFOs are constantly looking at budget cuts. What role does the visual merchandiser play in retail and the bottom line, and what do retailers have to consider? Vanessa Ching speaks to some creatives in the industry at the POPAI Asia Summit.

Store display is a serious consideration as retailers’ main metrics include ‘sales per square footage’ — which is ROI generated for each square foot of sales space.

An example of how a brand utilises its store space and showroom to break into a new market is Target in San Francisco, USA, which went all out to display its Internet of Things (IoT) products in a new concept showroom. This involves a lot of re-thinking, unlike ‘traditional’ visual merchandising.

Dubbed “Open House”, it is seen as the first manifestation of the company’s plans to re-energise its brand and to create a new billion-dollar business outside of its comfort zone. Inside the 3,500sqf acrylic-made Open House features 35 Internet-connected home devices, nearly a third of which are already available at Target. While the chain has no plans to replicate Open House elsewhere, it may export the best parts into its nearly 1,800 stores.

Innovative design thinking and how consumers experience the retailer’s goods in its shop is critical.

Design thinking

“Design thinking is a method. And the method is to facilitate the voice of the customer as a first step in developing a retail strategy,” says James Damian, principal at Brand Integration Services and chairman of the Board of Buffalo Wild Wings, a speaker at POPAI Asia Summit.

“Design thinking is a counter intuitive thought process that really puts the customer in the centre of the conversation, not the retailer. So it uses empathy as a key to understanding what the customers’ needs are and what their desires are. And by understanding that, design thinking can develop the connection between the higher purpose of the organisation, why they are in business in the first place, and who is it that they serve so they can develop a meaningful and sincere customer strategy.”

According to Damian, retailers today have first to put themselves in the shoes of the customers and design emotional experiences — not just put goods on the shelves. And that’s very hard for retailers.

“For example, designing a very memorable experience for a consumer electronics retailer was not easy because the typical consumer electronics retailer just want to put their boxes on the floor and then price it. There’s no distinguishing value proposition in that. And my message to the retailers has been, if that’s what you are going to do, you’ll be going out of business. You are not winning the hearts and minds of the customers.”

Damian adds if the retailer wants to place goods on the floor, why not just list the products on its website? The retailer can list the broadest range of products possible without thinking about floor space.

Engaging the five senses

A testament as to how online shopping is changing the in-store experience can be seen in Europe, where the expanded use of electronic shelf labels has gained much popularity over the past decade.

As more customers ‘showroom’ or scan Amazon.com and other websites to compare prices, retailers are beginning to see the need to invest in electronic pricing displays to ensure price integrity and to cope with increasingly frequent price changes. The upside to the customer at the store is, they would be able to track the prices at the store on their mobile phone, compare in real time and make their purchases.

As an extension to this, Damian says retailers need to fuse both digital and physical in order to deliver the best customer experience at the store. “The best retailers understand they have to do what online can’t do. And that means, retailers would have to deploy the five senses. Shoppers have to be able to put experience, with taste, touch, sight, sound and smell and be able to create a playground of experiences, something online can’t really do. The retailer has got to do both, as a design and as an application. The store has got to be the interface, the interface, the store. And retail will survive physically.

“Why? Because we are humans. We enjoy social connectivity and social experiences. We need that in our lives. A lot of people are saying the retail physical brick-and-mortar store is going to go away. People say the disruptive technologies hitting the market will cause this — that something is going to go. No. It’s just another tool in their toolbox. And they get to choose what they want, when they want.

“We talk about the idea that omni-channel goes away. Why? Because the customers don’t think of multi-channel. It’s like breathing air to them, from the mobile in the palm of their hand to the Web experience, to in-store.

“The customer is always at the centre of everything. It’s the customer who’s driving the economy, not the retailer. So the retailer has got to be adaptive and design to the new behaviours that are being developed by the customer.”

Brand equity and ‘spirit’

Richard Nicoll, chief shopper marketing officer, Saatchi & Saatchi, Greater China says, like Burberry who was rebuilding its brand for the new generation, it’s not necessarily about total consistency in store formats. Instead, it’s about evoking the spirit and brand equity.

Nicoll also cites an example where a store has its store completely wi-fi enabled. Shoppers are able to download information to their phones and link to the store’s in-store TV sets, interactive shelves and augmented reality. Creating a shopper dream state does not necessarily mean a re-organisation of the retail space, but a re-organisation of the way the retailer address its shoppers.

A holistic process

Bob Neville, global retail creative director for New Balance, says: “When it comes to actual stores, I think, more and more we have to become a mash-up between physical and digital. When it comes to visual merchandising, I’d see the role of visual merchandising as giving clarity of the product offering, helping to tell stories, helping to focus what the brand is about and what the product is trying to sell. Visual merchandising is a significant area for any brand.

“It’s a whole discipline. Great retail is going to be the whole discipline coming together — product, merchandise curated in the right sort of way in the right designed store. Yes, the store can be in the right place but if you don’t have one of those pieces, the whole thing is going to fall apart. So, visual merchandising is, if you like, more than just the fluff and puff. It’s not just how things to look. It’s a great tool as well — one that’s significant,” Neville continues.

Damian adds that CEOs and CFOs in retail, and the boards they serve, need to take a hard look at their creative processes and engage both sides of the brain.

“Expectations of reinvention is hard for retailers, especially retailers that are successful — they figured they have to answer to the quarterly report card and that’s why they don’t have the patience. But if they are true to sustainable growth, over time, they have to bring the creative whole minds to the table. Those C-suite leaders have got to be schooled differently. It’s not just about the left brain. We all have a whole mind. And a creative mind. And it’s the combination of the two things that create stronger, everlasting economic growth.”