Appealing retail environment keeps shoppers coming back

When it comes to shopping, Asians have three obsessions: value, luxury and, increasingly, technology. But while brands are actively pursuing these principals in terms of the products they sell, when it comes to the retail environment itself only a minority are getting to grips with these basics.

And yet, in terms of creating a connection with the consumer and building a community of shoppers, they are as important for a grocer as they are for a trendy clothing store.

According to Rodney Fitch, former chairman and chief executive of Fitch Worldwide, brands that have found success in Asia are those who have created a retail environment that lets the consumer believe they are buying into a certain lifestyle at a price that represents good value. H&M, Zara and IKEA have all designed a certain retail experience and combined it with a level of value for money that has made them incredibly successful in Asia.

But is creating such kinds of retail environments possible for all brands? At opposite ends of the extreme, how do the likes of Parknshop or Gucci express themselves as retailers?

This is a big challenge for shop designers who rarely think in such terms when developing the retail environment, aside from using a bigger plate of glass, or thicker marble. They can fail to see what the brand values mean to the consumer and build this into the retail space itself.

Furthermore, few brands outside the apparel sector have managed to create retail environments that define their brand offering. Pharmaceutical and FMCGs can go some way because they have a shop within a shop space, where they own the environment and have three or four shelves, but this isn't cheap.

Simon Holt, regional director of retail activation at Leo Burnett explains that some brands have gone out alone. For example, Procter & Gamble's luxury Japanese skincare brand SK-II now has its own boutiques, but whether this is a long-term definer and creates a retail message is in question.

Even in the luxury sector, where the experience of the retail space itself has long been a
priority, it is becoming increasingly difficult for brands.

For a start, the perception of luxury is changing - Fitch points out that by 2012, there will be 1.5 billion people in the world who are categorised as luxury buyers. As such, there is a danger in trying to be everything to everyone. Halt says that both Prada and Gucci have tried to expand their retail footprint to appeal to a wider, more value-focused market, but in the process they have lost their luxury image and are desperately trying to go back to the image they once had.

Another complicating factor is that the retail experience is becoming more and more digitally focused. Fitch predicts that by 2017, the largest retailer in the world will not be Walmart, but an e-commerce site.

As such, the largest distributor of goods in the world will have a single site to which shoppers will have access 24 hours a day. For retailers, designing shops to appeal to customers and working out how the products fit the market, will present fascinating problems.

This article was originally published in the 15 July 2010 issue of Media.