New technology, new store designs and cost cutting are often mistaken for retail innovation. In Part 1 we looked at technology. In this article we look at two other impersonators. Design and cost cutting
Store Design is often mistaken for Retail Innovation but it’s not unless it follows the golden rule i.e. it solves a customer problem, does something positive for the business and aligns with your purpose. Being involved in the design of a new store is one of the most exciting things you can do as a retailer. Usually the marketing/design agency will be called in to present a view of macro trends, how they affect consumer behaviour and how they relate to your brand personality and customer journey. Ultimately a design will be presented that looks so good (they never look bad) that it could easily be mistaken for Retail Innovation. It will tick all the boxes from the research. It will include some greenery because your customers are environmentally conscious (which is also part of your purpose) and feel more comfortable in spaces that include plants. It will include places for customers to sit so that they feel happy spending more time in your store. It will include digital technology like screens, assistance kiosks and maybe wi fi because contemporary customers value blending the physical and digital in their shopping experience.
You roll out the first stores in the new design and they look great. Unfortunately, the impact on sales isn’t what you had expected. In addition, when you walk the shopping centre you see a lot of other new stores looking very much like yours (lots of greenery, lots of places to sit, digital screens/free wi fi etc.). The new design didn’t work because too much time was spent on making the store look good and not enough on time on solving core customer problems like long wait times, complicated payment systems and poor omnichannel integration. The store looks so good that the fact that it’s still really hard for customers to do business with you irritates them more than it did before.
Retail design that’s based on looks rather than facilitating customer and business outcomes is common in our industry. When a new design fails to deliver, retailers often try to solve the problem by hiring another designer and going through the whole process again. When a design follows the golden rule, it doesn’t need to change that much from year to year. Apple is a great example. I have pictures of my first visit to an Apple store from more than a decade ago and while some things have certainly changed the look and feel is still very recognisable. The design has substantially survived because it has facilitated ongoing innovation. It still offers customers a better shopping environment than is available in other stores, it still allows Apple to convey their value propositions more effectively than they could in another environment and it still fulfils Apple’s original purpose for building its own retail channel which was to educate and serve.
Cost cutting is also often portrayed as Retail Innovation, but this impersonation is easier to pick. Cost cutting’s disguise consists of a joke store moustache, glasses and funny accent. You would have to be pretty naïve to mistake it for innovation. Management know this and tend to disguise cost cutting programs with futuristic sounding names or even just a date that’s about five years away. When cynicism sets in, they are relaunched with another futuristic name or even just a new date. Cost cutting is good and sometimes necessary, but it shouldn’t be confused with Retail Innovation.
How to spot an impersonator
With a trained eye it’s easy to spot what is real Retail Innovation and what is not. Real Retail Innovation follows the golden rule i.e.it solves a customer problem, does something positive for the business and aligns with your purpose. When it’s real you can see the results in customer count and in the till. When it’s not you make excuses (we’re in the wrong part of the centre, everybody’s down, the government is killing our business). Retail Innovation can definitely be facilitated by technology, design or cost cutting but unless those programs follow the golden rule they are not the real thing