Supermarkets can bolster profits by investing in effective design. Retail News investigates the latest trends.
Retailers in the Middle East are facing stiff competition and under more pressure than ever before to improve their stores’ performances. Fortunately, help is at hand from design gurus.
Mag. Christoph Haibőck is director region Middle East for one of the world’s biggest shopfitting firms, ShopConsult by Umdasch, at its Dubai office.
“Store Branding is the visualisation process of the marketing idea at the point of sale,” he says. “If a customer is going shopping for fashion or food, brands automatically come into his mind so the idea is to build up this brand image.
Customers are exposed to nearly triple the amount of SKUs in a gondola within the same space as two to three years ago.
ShopConsult by Umdasch’s main service Store Branding seeks to turn simple stores into distinctive brands to visualise a marketing idea at POS.
The Store Branding process consists of two chief components: brand strategy and brand design. The former develops the strategic parameters such as definition of target customers and optimal strategic positioning, and the marketing idea then takes shape. For the latter, the strategic issues are implemented, and then the marketing idea is visualised.
The analysis workshop involves consideration of factors including competitors, the site, the target group, company type, image and positioning, while later the design concept deliberates over the space architecture, function concept, merchandising layout, lighting and ceiling concept, and the floor concept.
Visual merchandising training is imperative to attain optimal presentation of items with a target of reaching better sales.
“A lot of money is invested in malls, yet the tenant mix is often incorrect. We try to create a very structured process with Store Branding. The first step is the analysis, the second step is the strategy and the last step is design,” says Haibőck.
The company has its own production facilities at Dubai’s Al Quos industrial area, providing everything from strategic questions to the whole fit-out process, and started its regional business with a supermarket chain in Libya. “Since then, we have been doing a lot of business in Saudi Arabia, where the retail scene is exploding.
Architects try to advance their reputations when they approach the work and bring in their personal styles to projects, Haibőck warns, however “we have to behave like our target groups, we have to see everything with the eyes of the customers”.
“The products are the stars, and they must be presented in the best possible way. All of our clients are ordering flexible shelving in a variety of angles, but they don’t play with the flexibility. All of the international brands are coming to the Middle East and it’s a sport for businessmen to get franchises right,” he says.
“If you are planning a rollout of many stores, every mistake in your strategy or design concept is being multiplied,” says Haibőck. This risk has prompted top management and board members to invest their time at design workshops.
Haibőck says the company is “not fighting to be the cheapest. We want to be the best in terms of quality and functional energy,” and its in-house training academy educates retail professionals in areas including shoplifting protection to visual merchandising, store branding and design seminars.
• Realistic representations are more effective than abstract pictures, and familiar pictures are more effective than unfamiliar subjects.
• Women perceive things differently from men. Whilst the ‘child concept’, being pictures with children, continues to be effective among female customers.
• Umdasch has praised the success of the so-called ‘Smiley Effect,’ which refers to price labels with smiling faces, and proved the customer subjectively registers these prices as an average of 7% lower.
Creativity needs a very structured process, to get the best results out of it. The retail business is so complex nowadays, and the focus should be on the power of the whole team and the needs and feelings of the target group. We are doing a lot of customer research and using neuron-marketing.
Based on the results of extensive empirical studies on the subjects of visual merchandising and product range design, highly effective marketing tools such as LIM (Less is More) and MIL (Mass in Limits) have been developed and employed in retail constellations in the region.
The retail trade’s major concern is to optimise the revenues per range of goods. Depending on its positioning, it is therefore a matter of defining not only the ‘right’ brands, but also the right number of products. If the number of articles presented is too large, the consumer may become confused and experience a sense of frustration.
Ensure that you have enough space and pay points to handle customers’ purchases.
According to ShopConsult by Umdasch, which developed the strategy to find the right balance, the LIM maxim is: “A slim assortment (with only a few models tuned to the target group) promises greater commercial success.” The use of fewer models translates into higher presentation quality.
A POS presentation fulfills all requirements when all of the media employed, including the product and packaging, are derived from the relevant brand’s identity, including leaflets, posters, advertising on shopping trolleys, floor graphics, dividing bars at the till, in-store radio and TV, electronic media, cash voucher advertising and tasting sessions.
However, placement, display and overall appearance are paramount.
The principal questions for retailers are: how does the brand become the space? How does a brand become an object of desire for the purchaser, in which each little detail is dedicated to a coherent task?
Indu Varanasi, architect and designer for Dubai-based ir design has worked on Better Life’s showrooms, and says “every shop should look different.” She reveals the company is now developing its new concept Retail Identity, which involves “starting from their branding, signage, logos and colours then translating the whole process into a retail design.
We will look into everything from tags, shopping bags and packaging, every detail of the brand.”
“Because people have so much choice, they subconsciously react to the space around them, particularly the location of the cash counter. What happens when you first enter a shop? Are you flooded with the products around you or do you have space to look around?”
Varanasi advises bearing in mind smaller factors in the design process, such as ensuring replacements and ad hoc stock are available. She argues that local talents and brands in the region should be encouraged more against a backdrop of global threats.
Before a display is designed, there are a number of questions relating to organization. Checkpoints include the definition of the range of products, the description of the display wall or centre room, size, material, clarification of the way the price is to be displayed, locations, display monitoring, technical questions, logistics, project management, budgeting and cost control.
Wanzl Middle East offers services including conceptual design, space planning for effective use of space, consultation, customisation solutions, production, installation and support, according to interior designer Golzar Sanganian. Clients include i2 Electronics & Home Entertainment in Abu Dhabi and Kuwait’s Sultan Centre.
• The higher the presentation quality, the higher the purchasing incentive.
• The higher the purchasing incentive, the higher the purchasing quota.
• The higher the purchasing quota, the higher the stock turnover, and the higher the stock turnover and number of sales units the lower the cost of logistics.
The latest shopfitting trends are flexibility and sustainability, and the integration of various materials and surfaces to create new and exciting approaches and solutions, which evoke emotion, and crucially, offer safety and functionality.
According to Sanganian, supermarkets should follow basic shop fitting rules, to “create a convenient and friendly shopping environment, as comfort and access are crucial factors.”
There should be enough space for trolleys to pass through aisles easily, even at peak times, and stores should be able to handle large quantities of products while reducing replenishment time by taking advantage of the space.
The products are the stars, and they must be presented in the best possible way.
“Ensure that you have enough space and pay points to handle customers’ purchases. Long queues in supermarkets are one of things people complain most about.
Modular, flexible floor and wall units that provide the ability to integrate various materials, light power and mobility are in strong demand, Sanganian says, as well as organic forms in strong and and flexible materials from a variety of groups, such as polymers, glass, metals, ceramics, and carbon.
Differentiation and segmentation strategies specific to particular styles and target groups on the basis of the relevant motive structure are also rising in importance.
Neuro-marketing is the science that analyses how sales decisions are made and how they can be influenced, and the concept has become a widely used vehicle in retail design in recent years.
In the process from concept to final store design, retailers approach designer with a list of requirements in the form of a brief outlining the commercial and aesthetic objectives for the space, she explains.
The designers develop a design audit and a case study to explain the options. A rough layout based on space planning and circulation is developed, and some sketches and images are created to provide mood boards.”
When the client is satisfied with the general layout, space planning and operational elements on his checklist, the project is taken to technical drawings on CAD-based software with the scaled technical drawing approved. Final renders and visualization can be done if required.
Bold, conceptual design will impact purchasing behaviour and differentiate retailers from their competitors, Sanganian adds, and “clever layouts with flexible shop systems will give a comfortable and entertaining experience that will clearly define your product.
• The merchandise density influences the consumer’s price-perception.
• The overall perceived value of a store is predominantly influenced by the merchandise strategy followed.
• The higher the number of products at the POS, then the more price-aggressive the store is perceived.
The MIL index defines the total number of articles displayed per square metre of sales areas. The volume of goods displayed has a direct interaction with assumptions about price, and accordingly it must fit in with the desired positioning. The more articles displayed, the greater the price aggressiveness as it affects the customer such as in the case of clothing:
Over 35 articles/m² sales area = Hard Discount
25-35 articles/m² sales area = Discount
20-25 articles/m² sales area = Specialist Discount
15-20 articles/m² sales area = Specialist
10-15 articles/m² sales area = Fashionable Verticals
3-5 articles/m² sales area = Luxury Supplier
Source:Research from ShopConsult by Umdasch
RELATED LINKS:Meet the designer: Golzar Sanganian, Wanzl