The retail industry: more complex every day
When you start to develop a new store concept or to restyle an existing formula, you start a complicated process. Success is by no means guaranteed even if your research has been thorough and you have a great deal of experience and the right feeling for it when you make decisions regarding product range, prices and the store's location …
What is it that makes the retail industry so complex? First and foremost the extreme competitiveness: recently a growing number of international players have been offering identical ranges at minimum prices in easily accessible locations. And, of course, the consumers. They often seem like exceptionally well-informed professional buyers! But, at the same time, they are capricious, impatient and insecure. Yet this insecurity also gives you opportunities. Because it makes consumers look constantly for 'anchors', stable values that offer them trustworthiness and security. And they hope to find that trustworthiness in brands with fixed, recognisable values. So it is not surprising that the 'old' brands are, indeed, getting stronger, as demonstrated by a recent survey. Consumers find this trustworthiness not only in product brands, but also in store brands. For they also associate emotional value perceptions with store formulas.
When you start to develop a new store concept or to restyle an existing formula, you start a complicated process. Success is by no means guaranteed even if your research has been thorough and you have a great deal of experience and the right feeling for it when you make decisions regarding product range, prices and the store's location …
What is it that makes the retail industry so complex? First and foremost the extreme competitiveness: recently a growing number of international players have been offering identical ranges at minimum prices in easily accessible locations. And, of course, the consumers. They often seem like exceptionally well-informed professional buyers! But, at the same time, they are capricious, impatient and insecure. Yet this insecurity also gives you opportunities. Because it makes consumers look constantly for 'anchors', stable values that offer them trustworthiness and security. And they hope to find that trustworthiness in brands with fixed, recognisable values. So it is not surprising that the 'old' brands are, indeed, getting stronger, as demonstrated by a recent survey. Consumers find this trustworthiness not only in product brands, but also in store brands. For they also associate emotional value perceptions with store formulas.
Linking fixed values to contemporary Developments
It is a characteristic of stores that have developed a unique and valuable store brand perception that they have succeeded in retaining it for a longer period of time. This requires a consistent policy regarding such factors as product range and prices. In this respect, a link to communications, especially through the store's image, is essential: in this way, fixed brand values are combined with current developments.
The (Dutch) market shows many chains – such as Ikea, H&M and Aldi – that have built up a strong brand position thanks to this consistent strategy. In addition, there are chains that inevitably run into trouble because they anticipate consumer developments too late, or because they abandon their fixed values, such as for instance McDonalds, which introduced fresh salads into its product range in the nick of time. Or the Dutch supermarket chain Laurus (now Casino) that wanted to introduce a national store brand, but forgot that many of the fixed values of the stores were part of their familiar regional image.
Never stop innovating
Retail organisations are forced to choose their own direction. This is absolutely necessary for survival. But they need to realise that the road is often very tortuous and unpredictable, full of unexpected twists and turns and unpredictable dangers. Besides, they should also realise that the final destination is unknown: in order to survive, the organisation needs to continually re-invent a clearly recognisable consumer-oriented strategy. And each time the organisation does so, the consumer's likely response to the new strategy remains an enigma.
What does this mean?
That those responsible need to make far-reaching decisions. Not only about formulas to be newly developed but also about the future of the existing store formula - which is the successful ‘steady anchor’ for customers, with its familiar brand values. And in order to retain those values, the ‘anchor’ needs to develop in step with the customer dynamics. The aim is to retain the regular customers – and to attract new ones.
The store designers' role is becoming more strategic
The increasing complexity of retailing also requires a different strategy on the part of store formula designers. Creativity and expertise are no longer sufficient. Instead, today's retail organisations need a process-based approach. An approach that, in order to form a clear and recognisable store design, combines aspects such as trends, consumer developments, market overviews and also (with regard to restyling) the existing brand values. The main aim is to achieve a process of dynamic innovation in which designers have an increasingly leading and strategic role. They support the client using their market insight and expertise. They ensure that all of the success factors are integrated into the process in the right way and at the right time.
From theory to practice:
Getting to work with the practical-experience based development model. The Jos de Vries The Retail Company Concept Development Model is a handy tool. This successful model is based on extensive international practical experience of dozens of European retailers. Furthermore, the advantage of the model is that it is not only suitable for use during the development of new formulas, but also when restyling existing formulas. The special quality of the Jos de Vries The Retail Company Concept Development Model is that it is based on three pillars. The first is the maximum integration of market developments, trends and consumer behaviour. These are linked to the store organisation’s commercial expertise – the second pillar. And the third, at the same time not only pillar but also the central hub, consists of the designer's creativity and inventiveness.
Thus the model creates balanced solutions, focusing on innovation and practical applicability.
The model consists of three phases, which should be completed in the order given.
1. The discovery phase
2. The development (or Master Vision) phase
3. The concept phase
It is a characteristic of stores that have developed a unique and valuable store brand perception that they have succeeded in retaining it for a longer period of time. This requires a consistent policy regarding such factors as product range and prices. In this respect, a link to communications, especially through the store's image, is essential: in this way, fixed brand values are combined with current developments.
The (Dutch) market shows many chains – such as Ikea, H&M and Aldi – that have built up a strong brand position thanks to this consistent strategy. In addition, there are chains that inevitably run into trouble because they anticipate consumer developments too late, or because they abandon their fixed values, such as for instance McDonalds, which introduced fresh salads into its product range in the nick of time. Or the Dutch supermarket chain Laurus (now Casino) that wanted to introduce a national store brand, but forgot that many of the fixed values of the stores were part of their familiar regional image.
Never stop innovating
Retail organisations are forced to choose their own direction. This is absolutely necessary for survival. But they need to realise that the road is often very tortuous and unpredictable, full of unexpected twists and turns and unpredictable dangers. Besides, they should also realise that the final destination is unknown: in order to survive, the organisation needs to continually re-invent a clearly recognisable consumer-oriented strategy. And each time the organisation does so, the consumer's likely response to the new strategy remains an enigma.
What does this mean?
That those responsible need to make far-reaching decisions. Not only about formulas to be newly developed but also about the future of the existing store formula - which is the successful ‘steady anchor’ for customers, with its familiar brand values. And in order to retain those values, the ‘anchor’ needs to develop in step with the customer dynamics. The aim is to retain the regular customers – and to attract new ones.
The store designers' role is becoming more strategic
The increasing complexity of retailing also requires a different strategy on the part of store formula designers. Creativity and expertise are no longer sufficient. Instead, today's retail organisations need a process-based approach. An approach that, in order to form a clear and recognisable store design, combines aspects such as trends, consumer developments, market overviews and also (with regard to restyling) the existing brand values. The main aim is to achieve a process of dynamic innovation in which designers have an increasingly leading and strategic role. They support the client using their market insight and expertise. They ensure that all of the success factors are integrated into the process in the right way and at the right time.
From theory to practice:
Getting to work with the practical-experience based development model. The Jos de Vries The Retail Company Concept Development Model is a handy tool. This successful model is based on extensive international practical experience of dozens of European retailers. Furthermore, the advantage of the model is that it is not only suitable for use during the development of new formulas, but also when restyling existing formulas. The special quality of the Jos de Vries The Retail Company Concept Development Model is that it is based on three pillars. The first is the maximum integration of market developments, trends and consumer behaviour. These are linked to the store organisation’s commercial expertise – the second pillar. And the third, at the same time not only pillar but also the central hub, consists of the designer's creativity and inventiveness.
Thus the model creates balanced solutions, focusing on innovation and practical applicability.
The model consists of three phases, which should be completed in the order given.
1. The discovery phase
2. The development (or Master Vision) phase
3. The concept phase
This chapter is part of the book "the store manual" of Jos de Vries The Retail Company
The Store Manual (2005) Jos de Vries The Retail Company has been working his way through the marvels of the Retail world since twenty years. Since the Retail branch on its way to professionalism is developing and also scholarly interest was growing, there still wasn’t a manual.Jos de Vries The Retail Company has made a definite change in bringing out “The Store Manual” a must for every store.
You can order this manual for € 35,00 (excl. Postage and Package)
You can order this manual for € 35,00 (excl. Postage and Package)
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