Monday, August 17, 2009

Design strategy for Downturn

As the well-known architect Charles Eames put it, “Design is a plan for arranging elements in such a way as best to accomplish a particular purpose.” And retail, simply, is the sum total of various elements to boost consumption. Unfortunately For a few Retailers in India, retailing is still defined by the number of outlets that house a brand rather than the presentation of the brands.

Today, well-known retailers such as Selfridges and Harrods are taking the ‘recession’ opportunity to redesign and remodel their stores. It is no news that through the design history, many of the most exciting periods have been during economic downturns. The result? Consumers develop the interest of simply ‘checking out’ the ‘new’ store, and end up buying the products. The first element on the brand strategy, ‘design’, has hardly been given its due till date. Design can establish the most-specific purpose of attracting footfalls, especially when the consumers are cutting down on their spending budget.

Shantanu Saha, CEO, Idiom Design and Consulting Pvt Ltd explains, “Design is an intrinsic part of the overall brand strategy and should not be the last point. Retail design is not about creating attractive shops that have no walk-ins.”

Mukul Kulkarni of Caem India believes that ‘design always holds the competitive edge’ in any business, be it retail, architecture, interior, product design, textile, furniture, packaging or be it graphic design.

In tough times though, while the retailers are looking for alternatives to push sales, they are also cautious of spending the moolah on redesigning or remodelling their stores. Lara Balsara, business development and diversification manager, Madison+rkd retail iQ offers the alternative, “Store design is generally taken to mean environmental change and often involves structural changes to a building in which the internal shape of a space is altered. In consequence, it tends to be expensive.”

Vivekanandan G, head - operations, Four Dimensions Retail Design (I) Pvt Ltd is of the view that the retailers, earlier, were certainly spending lot of money on design to be competitive. But with the changing scenario, it is really important to decide what needs to be done and what can commercially be held back or delayed until the economic situation improves.

S Sundar, MD, Dovetail, explains, “Once retailers are reasonably certain that their product mix and pricing is correct, and the location is still relevant, they would then look at the store ambience and seek to improve it. They would need to work within tight budgets and focus on improving the customer shopping experience rather than wowing them with the brand story.”

Vikram Rao, director marketing and business development, Future Research Design Company (FRDC) Pvt Ltd is of the view that at the time when cash flow is a problem, “Retailing can explore new design concepts and revaluate their stand on the design aspect. Healthy economic trends tend to be non-beneficial to exploring new concepts, as the focus areas are bottom line driven.” And he states the well-known fact that retail in India has not graduated to a level where the design element and store planning has yet been identified as a catalyst to the growth of the bottom line. The retailers also would want that the money they invest on the store per square foot also gives them return.

The three vibrant elements that include the store deign planning include: entrance and visibility, support of store prototype, store circulation requirements and product displays.

Capping the Costs

The technology of AC used, lighting etc has to be questioned with respect to the design being proposed. “Think long term. Invest in better technology than going for cheap versions,” suggests Rao. Retail design shelf life should be now taken as 10 years, as compared to four-five years earlier. Once you do this, long term investment will work better.

Retailers might agree to relook their design strategy to attract the consumers and increase footfall. But how do they keep the costs low to ensure maximum benefits? The scope for cost-cutting exists in every element of design and is a challenge to the design firm as well as the retailer. Many-a-times just a moderate part of redoing a store in terms of colour palate, lighting and some fixture movement can bring a fresh new visual approach without going on a spending spree. One can create the best effects by quick and easy visual enhancements, an updated paint job with a new corporate identity or high-impact graphics for effects or simply by sporting newly designed fixtures/shelving.

These quick-fix solutions also ensure that the store does not remain non-operational for long. “While the fundamentals of store design are still valid, the focus of remodelling a store would be to change or improve on the more impermanent elements, than redo the complete interior,” says Sundar of Dovetail.

Going forward

As the real estate costs start to pinch retailers, who are still concerned with topline growth, optimum utilisation of the space inside the store will be increasingly sought. “We might see a shift to more modularised interior elements, so that if the location does not work then most of the interior can be dismantled and reinstalled in another location. We could see new materials used that are cheap and exciting, that have not normally been associated with retail interiors,” thinks Sundar of Dovetail.

Perhaps the greatest challenge is to provide enough on-floor stocking in order to limit the usage of stockroom space since that the retailers pay square footage rent for that space. The retailers, want as much merchandise attractively displayed on the floor. Thus, shelves and hanging bars are incorporated into the design scheme to keep stockroom space limited to 15 to 20 per cent of the total leased space. It is also important that at least 90 per cent of store’s merchandise can be seen on the shop floor.

Sundar further adds that the responsive shopfit providers would modify their product-service propositions accordingly based on their revised market positioning – are they the cheapest, the best quality, most proactive, and so on. We may see companies offering a more all round service that could include complete design and execution with the idea being a better coordination and therefore a faster time frame, quicker decision making and elimination of non-value-adding time, effort and communication.

As an essential part of design, visual merchandising enables the retailer to constantly evolve the overall look and feel in tandem with changing market scenario. This can be a key selling tool and yet be extremely cost effective. The in-built basic visual merchandising hotspots and techniques in the store design itself might appeal more to the store visitors.

As Scott Adams famously said, “Creativity is allowing yourself to make mistakes. Design is about knowing which ones to keep. But do not repeat your mistakes.” The coming months will be very interesting in terms of innovation within constraints in store design. Happy Designing for Recession!