Retail experience Jos de Vries The Retail Company

Christiaan Rikkers, Director of Jos de Vries The Retail Company, urges German retail to communicate more with its own customers. Christiaan Rikkers has been interviewed by German retail specialist magazine Lebensmittelzeitung and gives his opinion on the German retail world.

Mr. Rikkers, what does intelligent store design mean to you?
Let set the record straight first: we are not store designers, we are strategy and communications advisors on retail concept development.

That sounds expensive. Particularly in a time when retailers have high cost pressures to deal with.
That’s yet another misunderstanding. A good layout, the right merchandising and strong store communication are no more expensive than the same things done badly.

Which German retail company is currently making the most beautiful outlets?
In store development, it’s not just about the prettiest, but about developing a successful retail concept.

Let me rephrase the question: who in the German retail food market has a strongly communicative retail concept?
In terms of developing a ‘Retail Brand’, the Edeka Group has the biggest lead, because they think in a customer, sales and marketing-oriented way. The Globus concept, which we developed three years ago with Ogilvy in Ludwigshafen, is another good example. By comparison, most competitors are product-oriented.

What were the considerations for the new Globus sales concept?
Successful retail concepts are built on three pillars: price, assortment and added value. To date, most hypermarkets only take price and assortment into account, leaving added value by the wayside.

What concrete task did Globus set?
Make the stores more pleasant for customers, so they would visit not only for the product, but also for the shopping experience, like at Ikea. We also wanted to shake the image of outlet as a ‘Brandplace’, visited only by customers of industrial brands, and move towards an emotional ‘Marketplace’ where Globus could come into its own as a ‘Retail Brand’.

That’s easily said, but not so easily done. What’s so special about the Globus brand?
Strong experiences are created, and customers go from shopping experience to shopping experience. They are repeatedly confronted with the following core message: “At Globus, the World is still all right.”

What do you mean by that?
Globus customers find traditionally made foods in each department. This central message is in no small part supported by a variety of product guarantees and product information.

What retail concepts can you recommend to our readers as ‘experience material’ in Europe?
In terms of supermarket chains: Ahold daughter Albert Heijn and the independent company Jumbo, as well as small outlet exploiter ‘Iper’ in northern Italy. In terms of convenience stores, Tesco and Sainsbury’s in Great Britain, and the Tesco ‘Extra’ markets for larger stores.

You mentioned Ikea. What is it the Swedes do so well?
Ikea begins communicating with customers in the parking lot. From that point on, Ikea is in constant dialogue with them, until or even after they’ve driven away again.

Other than Edeka and Globus, you hardly mention any examples in Germany.
In general, German retails hardly communicate. They often only tell their customers their products are cheap. They underestimate the importance of communication. That’s a mistake, because it’s what allows business to profile themselves.

What do you base such a claim on?
How many people work in the marketing departments of Germany’s largest retailers? Three? And how many work on the shop floor? Two, three hundred? That’s a severely skewed ratio. British market leader Tesco employs just as many people in the marketing department as on the shop floor. That’s a huge difference.

If that’s true, what is the cause of this customer marketing blind spot?
Marketing is seen as an annoying expense. There’s still the widespread belief that marketing is little more than advertising weekly specials in the papers. That’s not brand strategy.

Will it still be possible for large-scale stores to reshape themselves in the future?
Globus, the Edeka ‘E centres’ and Hit are perfect examples. They embody what we refer to as ‘New Value Retailing’. We use the term to refer to concepts that deliver top performances in the areas of assortment and price while providing a true shopping experience.

What do you estimate are the survival odds for sales surfaces larger than 10,000 square metres?
If a retailer really listens to his customers, whether a store is 1,000 or 10,000 square metres large is irrelevant.

Based on this assumption, what makes a good sales experience?
Many factors influence the wide field of sales experience. The retailer must first and foremost provide the customer with a product experience with actual added value. My tip: set up every department as if it were a wine department.

Why is the reality so often different from this ideal?
Customers can rarely clearly recognise a strategy behind the assortment. The question the retail must ask himself is: “What do I want to let the customer experience?” At this point, he needs a communication concept.

And what is your definition of a convincing communication concept for retail?
If the customer takes two things home: the products bought and a positive overall impression of the retailer’s identity.

How does one create such an impression?
The retailer must tell a story the entire time the customer is in the store. Storytelling includes answers to the following questions: “Who is the retailer, what does he stand for, and what does he want to achieve together with the customer?” The retailer must constantly work from the customer’s viewpoint and consider what added value the customer is getting.

How do retailers communicate this added value in concrete terms?
A store has a variety of communications options for both in-store and without. Retailers can use the layout, design and signage as direct and indirect means of communicating.

What key consumer trends must retailers take into account in terms of overall communication?
Customers will always develop a value preference for values-oriented businesses.

Can you provide a concrete example of this customer values orientation?
One-third of all Dutch 15 year-old girls is vegetarian. The retailer must consider the impact this has on his business if this group will be his primary customer base in ten to fifteen years.

How can a retailer prove his values orientation through consumer communication?
Via the ‘right’ products, whether that means organic or vegetarian products, by bringing effective Visual Merchandising to the forefront. These products must become the key component of contact with the customer, as is the case with the Whole Foods Market or Trader Joe’s in the US.
We’re all getting older. Should we be paying more attention to the over-50 generation? Does the market need to reinvent itself? The problem with this customer group is that targeted communication is difficult. I don’t buy into the concept of either senior citizen or child supermarkets. The most one can do is provide a sub-selection of products interesting to specific customer groups.

How important is store layout in the grander scheme of communication?
Store layout is one of the most important parts of the market; after all, every metre counts. Without good layout, store capacity cannot be used optimally. Good store layout can lead to a 20 percent turnover increase.

What makes or breaks it?
When designing a retail concept, a lot depends on the retailer’s price positioning and the message he wants to communicate to the consumer. If the retailer is shooting for a high-value concept, he needs to adopt a more flexible layout.

In the industry, they say shelving design is an art in itself. What’s so artistic about it?
Shelving is where logistics and marketing meet. It’s pretty much the end of the line for both. Albert Heijn is an example of this.

Explain.
Albert Heijn’s shelving systems allow 15 percent more products to be presented on the same sales surface. They can be adjusted to the millimetre, but the height of the bottom shelving floors is reduced from 15 to 1.5 cm, and the average height of shelves from 55 to 45 cm.

Visually attractive presentation systems, like Tchibo’s, are often used on the shop floor. Doesn’t this prevent the creation of a visually uniform Retail Brand?
Not if they’re deployed properly. Tchibo does have an incredibly strong marketing concept, though. For example, in Sainsbury’s in England, the surroundings of the Tchibo stalls is still clearly a Sainsbury’s environment.

What’s the take-home message?
Trade and industry are better off investing in joint visual marketing on the shop floor than skimping on advertising costs.

Please contact m.vanderkooij@josdevries.eu or take a look at www.josdevries.eu for further information.