The last mile of retail –3 Crossing the threshold and entering the store The next step of the shopping journey of the customer is entering the store to begin shopping. Figure 1 details the three steps of the journey as the customer crosses the store threshold. The left column identifies the influences that a retailer uses to prompt a customer to elicit a response. The middle column identifies the senses by which a customer engages with the prompts used by the retailer or the key sensory driver and mechanism at work. The column on the right identifies the goal of the stimulus, what the retailer is keen to educe in the customer. When a customer is at a distance from the store, the store façade is the primary source of stimulus that is in the control ofthe retailer. Nearer the store threshold retailer options to influence customers increase; he can use store features like design of the entrance, quality of lighting, window displays, and entrance displays to engage customers. Until the customer reaches the store threshold, he can only „see‟ what the retailer is doing to engage him. His primary means of engagement with the retailer is visual. Once he is inside the store, the customer can engage with merchandise using all his sensory faculties. He can touch the merchandise, examine it, evaluate it, and reach conclusions Figure 1–Diversity of options a retailer has to engage with customers on their shopping journey Location of the customer Source of stimulus for the retailer to influence customers Primary customer faculties at work Customer choices retailer seeks to influence At a distance Store façade is a stimulus Near the thresholdInfluence of store features - entrance, lighting, windows, and displays Inside the store Products, displays, signage, and staff begin to influence Visual Perception Visual Perception Tangible experience–sight, touch, hearing, taste, and smell Customer choice - To visit or not Customer choice - To enter or not Customer choice - To browse and buy
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about it. His ease of engagement with the merchandise is determined by how it is displayed. Thecustomer can also acquire knowledge about the product through interactions with store staff.
Therefore once the customer is in the store his shopping behavior is influenced by a more
tangible „engagement‟ with what is around him, increasing the tactical choices available to
retailers to stimulate buying behavior.
To put this knowledge to work it is necessary to link the actions of retailers to in-store consumer
behavior by identifying the mechanisms at work. Deconstruct the retail environment in three
dimensions; product-related (the product categories, and their variety), space-related (the product
displays and signage, how customers can move around the store, and how goods move from
delivery to shelf), and people-related (how customers engage with retail staff in the store). A
retailer can act on any and all these dimensions to engage with customers. The outcome of
retailer actions can also be evaluated on three criteria; their functionality, their contribution to
aesthetics, and their role in creating an ambience. The functionality of design refers to the
effectiveness of the retail environment, assessed on how it enables increasing conversion of
customers to shoppers. Design achieves this through product-presentations, customer in-store
routing (guiding customers reach different parts of the store), displays (assisting customers
notice and examine merchandise), signage (enabling customers acquire knowledge to ease
buying), and the actual buying process itself (its ease and efficacy). One aspect of store
functionality, often ignored, is the ease of merchandise replenishment, the flow of merchandise
from store delivery to shelf. Shelf availability is an important retail challenge, a cause of lostsales, reduced customer satisfaction, and store loyalty. In store, the last ten yard supply chain
bottlenecks often hamper material flow through the store to the shelf. The aesthetic elements of
the design encompass the features that make the store attractive making it pleasant and
quality-price is reinforced by a second engagement with products, you will stop evaluating the
„suitability‟ of the store to fulfill your needs, and continue browsing. Once a customer enters the
store the functional aspects of the store become increasingly important because they determine
how well the store „works‟. The aesthetical and the ambience related aspects remain in the
background forming the backdrop of the shopping experience. The browsing behavior, the way
customers actually behave inside the store, is an indicator of their comfort in the environment,
the ease of shopping, finding the right products, and quality of service. The success of a retailer
requires considerable more attention to detail at each stage of the customer journey in the store.
The retailer has to identify locations in the store that customers will notice and then create
displays on those locations with messages to communicate cues that they can easily understand
and interpret. He has to continually reinforce customer perceptions about products and their
variety-quality-price developed both outside and inside the store, and enabling them make
commitments to search and shop.
This entire process takes place in seconds. The attention of the customer quickly shifts from the
store façade to other visual signifiers that could be images, graphics, fixtures and fittings,product displays, product packaging and other product level communications. From relatively
few dimensions of the store façade (structural, affective, and symbolic aspects) many tangible
and intangible factors now begin to communicate meaning to customers, and the consistency of
the different cues becomes important. Retailers need to pay a great deal of attention to different
store level cues. A customer inside the store is absorbing and interpreting information from
multiple sources. All the cues need to be attractive, consistent and relevant for customer choice
making. The number of cues, if executed with care, reinforcing the messaging, is an opportunityto ease customer experience in the store by enabling choice making. Walmart executed a major
repositioning in 2008, implementing changes in its category strategies expanding and contracting
For us “save money, live better” in store …is about price presentation…as you walk into our stores, we are
making a very loud, bold price impression as we go forward.
…substantial price advantage for people who are looking to save money. Same products, lower price.
And…a good and getting better shopping experience. 1
In a September 2009 story Time magazine ran a story titled „Walmart‟s Latest Move to Crush the
Competition.‟ It presented a store level perspective of the intended changes, seen from the eyesof a senior operating staff.
… the company is in the beginning stages of a massive store and strategy remodelling effort…dubbed
Project Impact... goal of Project Impact is cleaner, less cluttered stores that will improve the shopping
experience…
…One …weekday afternoon I toured a brand new, 210,000-sq.-ft. Walmart in West Deptford, N.J., with
Lance De La Rosa, the company‟s Northeast general manager. “We‟ve listened to our customers, and they
want an easier shopping experience,” says De La Rosa. “We‟ve brightened up the stores and opened things
up to make it more navigable.” One of the most noticeable changes is that Project Impact stores reshape
Action Alley, the aisles where promotional items were pulled off the shelves and prominently displayed for
shoppers. Those stacks both crowded the aisles and cut off sight lines. Now, the aisles are all clear, and you
can see most sections of the store from any vantage point…
…And the discount price tags are still at eye level, so the value message doesn‟t get lost.
“They are like roads,” De La Rosa says proudly. “And look around, the customers are using them. We‟ve
already gotten feedback about the wider, more breathable aisles. Our shoppers love them.” 2
Intended changes in the merchandising strategy called “Win-Play-Show” was based on achievingconsistency in all possible customer contact points – product variety, displays, and messaging.
Win-Play-Show is really a merchandising strategy … In a “show” category, the company carries fewer
SKUs than it has in the past. A “show” strategy is a defensive approach that limits product selection but
does not cause a buyer to go somewhere else for a product. In “win” categories, price leadership is deemed
b l t l iti l l ith h i d d ll iti d di l i th t Thi
As Howard Davidowitz…told the Columbus Dispatch, “They can‟t appear expensive. It‟s got everyoneconfused.”4
The reduction in product variety was experienced by some customers as a „frustratingexperience‟ not the traditional image of a big-box retailer who is expected to have category
width and depth.
“If I go to Wal-Mart, I expect to find almost anything,” Abella said. “Reducing inventory makes thingsleaner and meaner, but it‟s also very frustrating when a big box does not have what you want.” 5
Self-reflection and learning by Walmart
In March 2010 Walmart, cognisant of declining sales over three successive quarters, admittedthat the changes were a self-inflicted wound, taking decisions to reverse many of the changes.
“Self -Inflicted Wound”
… Walmart, which is one of the few retailers that saw same-store sales rise for eight consecutive quartersduring the recession, suddenly experienced sales declines. At stores open for a year or more, sales fell 1.5%
in its second quarter, ending July 31, 2009. Third-quarter sales dropped 0.5%, followed by a 2% retreat in
the fourth quarter.
… Walmart is dialing back. On Mar. 10, COO Simon said the store is reintroducing 300 of the items that
were removed. Dubbing the remodel process a “self -inflicted wound,” Simon said at a consumer
conference: “The traffic decline in the Project Impact remodel stores during the remodels is deeper than we
projected it to be. It‟s responsible for some of the traffic and some of the sales decline as well.”
“Inaction Alley”
One of the key Project Impact moves that hurt Walmart …was the decision to clear out “Action Alley,”
which is the main aisle and primary traffic corridor that separates various departments in supercenter stores
Each stage of the customer journey has the potential for retailer and customer engagement. The
customer is out shopping with an intention to browse or shop. This need creates an opportunity
for the retailer to engage and interact with the customer. Each location of the customer is like an
„act‟ in the „Retail Theater‟ for which the retailer can write the script and device a screenplay to
choreograph interaction with customers. Effective execution of this strategy requires the retailer
to map the steps of a customer journey, identify and understand customer needs and motivations
at each location, and then, using products, fixtures and displays, signs, graphics, and staff,
strategize to engage, communicate with, and assist the customer. The table 2 presents a working
tool to assist a retailer analyze, plan, and execute this strategy. The horizontal row details the
sequence of thinking required. It begins with identifying the customer location and delineating
their important needs and motivations. The third column describes the retailer goals and
objectives. With the context (location and customer) and retailer goals defined, the execution
details, column four, can be planned and detailed. This is an exhaustive process, requires
painstaking attention to detail, and asking the following reflective questions to make the store
design effective.
1. How does the store design accomplish gathering, holding, and focusing customer
attention? It is necessary to „engage‟ or „hold‟ the attention of the customer and
not allow it to „float‟ over the panoramic perspective of the store façade, entrance,
or a category department. The ability of a retailer to nudge and direct attention of
a customer, so that it appears natural and not contrived, is a factor in achieving
design effectiveness.
2.
What is the „most likely‟ psychological state of the customer at this stage of his journey? Customers in a store can have a wide spectrum of expectations and
uncertainties in a store. The emphasis is on „most likely‟ psychological state.
Retailers need to identify and prioritize the most probable state of mind from the