18 | www.retailenvironments.org RETAIL ENVIRONMENTS january.february.2015
ing and shopping habits differ significantly
from those of Baby Boomers, are beginning
their ascent to dominance in numbers and
buying power. Retailers know stores must
change to meet these realities, but worry
that no one can show them how to navigate
this uncharted terrain.
Subjective goals popular
Using data from 27 redesigns from retailers
of various types and sizes around the world,
EWI researchers Angela Schrubbe, market intelligence strategist, and Janis Healy,
VP of retail strategy, determined that it is
possible to measure how changes in store
design impact a retailer’s bottom line.
The study shows that the most popular
reasons for redesign are subjective: gaining
a competitive edge by differentiating from
other retailers; appealing more to current
customers; providing a better customer
experience through all channels including
the store; and providing a better customer
journey through in-store navigation.
These reasons are all prompted by customer demand—not retailer intuition, so
acting on them is imperative, researchers
found. The good news: The data shows that
measurements designed to test results for
traditional, objective goals also can be used
to measure progress toward new, subjective
goals. This data can then be combined with
nontraditional metrics to help retailers
evaluate and target their store designs.
The old formula for ROI—(gains from
Fewer goals, better metrics
investment minus cost of investment)
divided by cost of investment—is only
partly helpful for evaluating the effective-
ness of store design. It’s easier to show that
a change in lighting increases or decreases
sales of items being lit, for instance, than it
is to show that differentiating product areas
helps a customer find what she’s looking for
so well that the store becomes her favorite.
So how can retailers use traditional and
new metrics to measure subjective goals?
The research shows that the key elements
are identifying and sticking to a few, specific goals and then measuring everything
that has anything to do with them, from
cost of materials and sales figures to customer satisfaction surveys and employee
evaluations. Researchers identified metrics
for each defined objective and subjective
Redesigned Disney stores, for instance,
saw 20% increases in sales over the older
stores—enviable numbers by any measure.
But overall sales numbers don’t explain
whether there were more customers or
fewer customers who bought more, and
don’t say anything about what those customers liked. Surveys can: In this case, 90%
of customers surveyed in North America
and Europe reported that the new store
design “brought them closer to the Disney
brand,” making shopping at the store a
part of an experience that encompasses
everything from watching the movies and
television shows to owning, wearing, and
playing with items brought home from a
store that has become a destination.
The researchers call this “holistic
approach” to measuring ROI an “ironclad
framework for success.”
Strengthening the connection with their
current customer base is retailers’ stron-
gest motivator for performing redesigns,
according to a recent survey by A.R.E.
Other motivators include gaining a com-
petitive edge, aligning with a redefined or
reinvested brand, and appealing to a new
market segment. Their objective goals are
specific and measurable, with increas-
ing market share by far the most popular
(almost 52% citing it as their biggest goal).
Almost 90% of retailers surveyed
Grail within reach
expected to redesign stores in the next two
to five years, and nearly all considered the
in-store experience to be very or extremely
important to their brand. Eighty percent
considered store redesign to be at least a
moderate priority, while almost 30% con-
sidered it a high priority, and 10% consider
Guiding and measuring uncharted changes
in how stores work and look will thus be
vital to the industry in the next few years.
By targeting designs to specific goals tied to
strengthening brand identity and the customer experience of that brand, then using
many measuring tools to gauge success
toward those goals, retailers can determine
their ROI from store design choices better
than ever before.
Quest continues at GlobalShop
Searching for more insights? We don’t
promise a roundtable, but A. R.E. is
assembling a few brave souls to address
the quest for the industry’s holy grail.
Our panelists will use the EWI/A. R.E.
report as a springboard for discussion
about the ROI of store design during
GlobalShop 2015. For details, visit www.
Gail Deibler Finke is a
specializing in design topics.
study shows that
the most popular
reason for redesigns
continued from page 16