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Consumer purchases from Internet retailing websites continue to expand, and their share out of total retail sales increases. Yet there is no real reason to declare the demise of physical, bricks-and-mortar stores and shops any time soon. Online purchases from e-stores (including through apps) indeed pose a stressing challenge to many physical stores, but the latter still hold a solid and dominant majority share of retail sales. Nonetheless, owners of physical stores will have to make changes to their mission and approach to retailing in order to answer effectively and successfully to the challenges from electronic retailing (‘e-tailing’).

The share of sales revenues from online retailing varies across categories (e.g., from groceries to electronics) yet the share overall out of total retailing revenues still floats around 12%-15% on average; there is also important variation between countries. Tensions are high particularly because of the threat from overarching e-tailers such as Amazon and Alibaba who grew their businesses in the virtual online environment. However, retailers do not have to choose to be either in the physical domain or the virtual domain: Many large and even medium bricks-and-mortar retailers are already double-operating through their physical stores and the Internet and mobile channels. Moreover, the master of Western e-tailing Amazon is lurking into the physical world with the establishment of its Amazon Go food stores, its venture into physical bookstores in selected US locations, and notably the acquisition of the food retail chain Whole Foods — what better testimony of the recognition that physical stores are still in need. All these observations should tell us that: (1) The lines between physical and virtual (electronic) retailing are blurred and the domains are not exclusive of each other; (2) It is a matter of linking between the domains where one can operate as an extension of the other (and it does not depend on which is the domain of origin); and (3) The domains are linked primarily by importing technology powered with data into the physical store’s space.

Technology alone, however, is not enough to resolve the challenges facing physical stores. Focusing on technology is like harnessing the carriage before the horses. The true and crucial question is: What will consumers of the coming future be looking for in stores? This is important, because consumers, especially the younger generations born after 1980, still have interest in shopping in bricks-and-mortar stores but they could be looking for something different from past decades, moreover given the digital options available to them now. The answers will have to come through rethinking and modifying the mission and strategy set for physical stores. The direction that seems most compelling for the mission is to shift emphasis from the merchandise offered in a store to the kind of experience offered in the store. The strategy may involve reconsideration and new planning of: (a) the product variety and volume of merchandise made available in the store; (b) interior design and visual merchandising; (c) scope and quality of service; and (d) the technologies applied in the store, all tailored to the convenience and pleasure of the shoppers.

This article will focus primarily on aspects of design of stores, including  interior design and decoration, layout, and visual merchandising (i.e., visual display of products); together with additional sensory elements (e.g., lighting, music, texture, scent) they shape the atmosphere in the store or shop. Yet it should be noted that the four strategy components suggested above are tied and influence each other in creating the kind of experience a retailer desires the customers-shoppers to have while in-store.

Shopping experiences in a store rely essentially on the emotions the store invokes in the consumers-shoppers. Notwithstanding the sensorial and cognitive reactions of shoppers to the interior scene of the store, the positive and pleasant emotions the shoppers feel will most likely be those that motivate them to stay longer and choose more products to purchase (further desired behaviours may include recommendation to friends and posting photos from the store on social media). Prior and close enough to consumption itself, the personal shopping and purchasing experience may invoke a range of positive emotions such as joy, optimism, love (non-romantic), peacefulness, and surprise; of course there also are potential negative emotions that retailers would wish to reduce (e.g., anger, worry, sadness)[*].

The need for shift in emphasis in physical stores is well stated by Lara Marrero, a strategy director with Gensler, a British design firm: “It used to be a place where people bought stuff. Now it is a state where a person experiences a brand and its offerings”. Marrero, who is leading the area of global retail practice at the firm, predicts a future change in mentality of shoppers from ‘grab and go’ to ‘play and stay’ (“Retail 2018: Trends and Predictions”, Retail Focus, 15 December 2017). This predicted shift is still inconsistent with a current retail interpretation of linking the digital and physical domains through schemes of ‘click-and-collect’ online orders at a physical store. Additionally, consumers nowadays conduct more research online on products they are interested in before coming to a store: The question is if a retailer should satisfy with letting the consumer just ask for his or her preferred product at the store or encourage the consumer-shopper to engage and interact more in-store, whether with assistance from human staff or digital utilities, before making a purchase — the push may have to come first from the consumers. Marrero further notes the social function of stores: retail environments become a physical meeting point for consumers to share brand experiences. Retailers will have to allow sufficient space for this in the store.

In order to generate new forms of shopper experiences the setting of a store’s scene also has to change and adapt to the kind of experience one seeks to create. New styles and patterns of in-store design are revealed through photo images of retail design projects, and the stories the images accompany, on websites of design magazines (e.g., VMSD of the US, Retail Focus of the UK). They demonstrate changes in the designing approach to the interior environment of stores and shops.

A striking aspect in numerous design exemplars is the tendency to create more spacious store scenes. It does not necessarily mean that the area of stores is larger but that the store’s layout and furnishing are organised to make it feel more spacious,  for example by making it look lighter and allowing shoppers to move more easily around. Additionally, it implies ‘loading’ the store’s areas which are accessible to customers with less merchandise. First, merchandise would be displayed mostly on fixtures attached to walls around the perimeters of the store, but even then it should not look too crowded (i.e., in appreciation that oftentimes ‘less is more’ for consumers). Second, fewer desks and other display fixtures are positioned across the floor to leave enough room for shoppers to walk around conveniently (and possibly feel more ‘free’). In fashion stores, for instance, this would also apply to  ‘isles’ of demonstrated dressing displays. Third, desks should not be packed with merchandise, and furthermore, at least one desk should be left free from merchandise — leave enough surface for shoppers and sellers to present and look at merchandise and to converse about the options. In some cases, it may allow for the shoppers to socialise and consult among themselves around a desk at the store (e.g., inspired by Apple stores). Opportunities to socialise can be enhanced in larger stores  by allocating space for a coffee & wine bar, for instance, which may serve also sandwiches, patisseries and additional drinks. Stores would be designed to look and feel more pleasant and enjoyable for consumers-shoppers to hang around, contemplate their options and make purchase decisions.

  • Large stores that spread over multiple floors with facades turning outwards to the street may fix the facades with glass sheets, and in order not to block natural daylight from entering into the store they would place desks and mobile hangers or other low shelf fixtures along the windows.

Modissa Fashion Store set for Christmas

In the new-era store not all merchandise the store may offer to sell needs to be displayed in the ‘selling areas’ accessible to shoppers. Retailers may have to retreat from the decades long paradigm that everything on display is the inventory, and vice versa. It is worth considering: First, some merchandise can be displayed as video on screens, and thus also add to the ‘show’ in the store; Second, shoppers can use digital catalogues in the store to find items currently not on display — such items may still be available in stock on premises or they may be ordered within 24 hours. But furthermore, customers may be able to coordinate online or through an app with a store near them to see certain products at a set time; up-to-date analyses of page visits and sales on a retailer’s online store can tell what products are most popular, subsequently guaranteeing that the physical stores keep extra items of them in stock on premises.

Here are references to a few exemplars for illustration of actual store design projects published in design magazines’ websites:

Burberry, London — The flagship store of luxury fashion brand Burberry on Regent Street is highlighted for both the use of space in its design and the employment of digital technology in the store. A large open space atrium (of an older time theatre) occupies the centre of the store (four floors, 3000 sqm), impressive in how Burberry allowed to keep it. The digitally integrated store is commended for its fusion of a ‘digital world’ into its bricks-and-mortar environment: a large high-resolution screen plays video in the atrium, synchronised with a hundred digital screens around the store, some 160 iPads (e.g., for finding items on the catalogue that may not be on display), and RFID tags attached to garments (VMSD, 18 December 2012).

Hogan, Milano — The footwear ’boutique’ store (277 sqm in via Montenapoleone) is designed to reflect the brand, “luxury but accessible”. The store’s mission has been described as follows: “Hogan is a lifestyle brand, championing contemporary culture. The store therefore needed to be dynamic, working hard to adapt from retail space to live event or gallery space”. Characteristic of the store: tilted surfaces for display, lying on top of each other like fallen-down domino bricks; and an animated display of patterns by LED lighting behind frosted glass walls — they both reflect movement, the former just symbolically while the latter more dynamically, to “express the dynamism of the city”. The store of Hogan also fosters social activity around its host bar and customization bar (Retail Focus, 15 February 2018).

Black by Dixon’s, Birmingham (UK) — The technology retail concept aspires to make “the geeky more stylish and exciting”. Digital technology is “dressed” in fashionable design, aiming at the more sophisticated Apple-generation (distinctive in the images are the mannequins “sitting” on desks as props, and colour contrasts on a dark background). (VMSD, 24 May 2011.)

Stella McCartney, Old Bond Street, London — The re-established flagship store resides in an 18th century historic-listed building (four floors, 700 sqm). Products such as dresses and handbags are displayed (sampled) across the store in different halls. The design and lighting give a very loose feeling. Refreshingly, the ground floor features an exhibit of black limestones and “carefully selected rocks” from the family’s estate, a piece of nature in-store (Retail Focus, 14 June 2018).

Admittedly, some of the more distinctive and impressive design exemplars belong to up-scale and luxury stores, but they do give direction and ideas for creating different experiences in retail spaces, even if less lavishly. Furthermore, technology can enrich the store and add a dimension of activity in it. Yet it is part of the whole design plan, not necessarily its central pillar, if at all.

Installing digital technology in a store does not mean importing the Internet and e-store into the physical store. Features of digital technology can be employed in-store in a number of ways, and the use of an online catalogue is just one of them. There is no wisdom for the physical store in trying to mimic Internet websites or compete with them. It should find ways, instead, to implement digital technologies that best suit the store’s space and transform the experience of its visiting shoppers.

Moreover, the store owner should identify those aspects that are lacking in the virtual online store and leverage them in the bricks-and-mortar store (e.g., immediacy, non inter-mediated interaction with products, sensorial stimulations other than visual and audio, feeling fun or relaxed). Thereof, the store should borrow certain technological amenities that can help to link between the domains and make the experience in-store more familiar, convenient, interesting, entertaining or exciting. According to an opinion article in Retail Focus on “The Future of High Street” (Lyndsey Dennis, 25 April 2018): “To draw customers back to brick-and-mortar, [retailers] need to rethink how they use their physical space and store formats. The key is to give customers something they can’t get online, whether that’s information, entertainment, or service“. Advanced technologies such as Virtual reality (VR) and Augmented Reality (AR) are part of the repertoire that are increasingly introduced in high street stores [e.g., AR applied in the fitting rooms of Burberry’s store, triggered by the RFID tags].

Matt Alderton, writing in ArchDaily magazine of architecture and design (25 November 2015), details key technologies and how they are implemented in stores to create new possibilities and leverage shopper experiences. One group of technologies can provide vital data to retailers which in turn can be applied to interact with shoppers and return useful information to them (e.g., beacons, RFID tags, visual lighting communications). The second group includes display technologies that may be enriching with information and entertaining to shoppers: for example, VR and AR, touch screens, and media projected on a surface such as table-top which thus becomes a touch screen. Alderton clearly sees consumer need for physical stores, the question is how consumers would want them: “What the data says is that shoppers want to move forward by going back: Like their forebears who visited Harrods, they crave emporiums that are experiential, not transactional, in nature“. (See also images in this article as they portray new-fashioned designs in space and layout; notably these stores feel less crowded by merchandise, and some show in-store digital displays.)

These are challenging times for bricks-and-mortar stores. New possibilities are emerging for physical stores to grow and thrive, yet they will have to adapt to changed shopping and purchasing patterns of consumers and develop new kinds of experiences that appeal to them. It should be a combined effort, with contribution from interior design of stores and visual merchandising, utilities and amenities based on digital technologies implemented in the store, and the support and assistance by human personnel. The in-store design is especially important in setting the scene — in appearance, comfort and appeal — that will shape shoppers’ experiences. Retailing could evolve as far as into new forms of ‘experiential shopping’.

Ron Ventura, Ph.D. (Marketing)

Reference: [*] Measuring Emotions in the Consumption Experience; Marsha L. Richins, 1997; Journal of Consumer Research, Vol. 24 (September), pp. 127-149.

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The major British grocery retailer Tesco is in a crossroad. Strategies that have brought the retail chain success, good reputation, and a leading position do not work as well as in past years. Tesco has been frequently commended for its Clubcard loyalty programme, established in 1996, that implemented an exemplary customer data-driven approach in the realm of relationship marketing; it has put the chain way in advance of all its UK competitors. During the previous decade Tesco also initiated its advanced concept of segmented network of different types of stores for different types of shopping that is continuously growing. Notably, the UK-based company has expanded into more countries and to more types of business, becoming a giant global retail group. But now Tesco finds itself in difficulty. The mission is to find where matters have gone wrong and how to put Tesco back in order.

The recent accounting blunder in which the group over-stated its profits, troubling enough, is truly only a symptom of deeper problems in the management of Tesco, going at least three years back. The profit error in excess of £263m corresponds mainly (£118m) to the first half of the current financial year (2014/15), but it extends to the previous two years, too (following an investigation by Deloitte concluded in October).

  • This error was caused, in the words of departing chairman Broadbent, by “accelerated recognition of commercial income and delayed accrual of costs in the UK food business“(1), referring to incorrect timing of reporting payments made to suppliers (done late) and concessions Tesco received from them due, for example, to promotions given in its stores (done too early). The accounting misstatement may have occurred innocently because of lack of professionalism and a guiding hand in running the company’s finances (Tesco, reportedly, did not have a CFO for a while). In the worse case, it was done to conceal the decline in its business and poor financial performance. Either way, it is evident of underlying faults in the way the company was run in recent years.

The years 1997-2010 have been a significant period of intensive activity and growth at Tesco, led by two successive CEOs, Leahy followed by Clarke. It was a period full of ambition to extend internationally and engage in additional product and service categories, beyond Tesco’s core competence in food and general household retailing. But then Tesco was caught unprepared to cope with the financial crisis of 2007-2008 and the recession that followed, especially since 2010. Tesco under Clarke was late to respond, and continued its expansion “business as usual” despite the evident decline in consumer spending. Time has now come to re-align and to take a more focused approach on those business areas and retailing activities in which the company is more capable to satisfy both its customers and shareholders. The new CEO Dave Lewis, as of August 2014, re-stated that Tesco sees itself as a customer-centric company that intends to continue providing best value to consumers through its pricing, services, and stores. It remains to be seen how the new management keeps true to this commitment.

Tesco’s Stores in the UK

The British retailer distinguishes between different patterns of consumer shopping under different circumstances or for varied purposes; about ten years ago it split its mother-chain into four main types of chain stores. At the core are traditional supermarkets, known as Superstores at Tesco (482 stores as of Oct. ’14). It has added Extra mega-size stores with a much larger range of products and at lower prices for shoppers who want to stock-up their households for longer periods on fewer concentrated shopping trips (248 stores). On the other hand, Tesco developed a Metro type of store (reduced supermarket) to be located in centres of large cities and accommodate the unique needs and time constraints of working shoppers (194 stores). In addition they established a sub-chain of Express stores in a format like convenience stores for really rush trips and smaller baskets for products in immediate shortage — this is in fact the largest sub-chain currently (1,709 stores).

Mainly the three new groups of stores have grown since 2005; all four types account for more than 2,600 stores in the UK (there are some additional 800 stores of other retail-formats). The Express chain stores faced particular resentment from independent merchants because these stores have been established at their expense, by buying them out or by drawing local customers from them in their neighbourhoods (some have resolved the issue by becoming franchisees). However, it apparently was a more correct move to make than creating the Extra stores. To the surmise of Tesco, consumers are less attracted to the mega-store format because they are now less interested in making large purchases on any single shopping trip. Instead, consumers are more inclined to fill-in their stocks for the coming days (e.g., as budget or available cash allows). The advantage of buying at lower prices at Extra stores, as in the chain as a whole, also diminished in face of a challenge from more efficient discount chains like Aldi and Lidl from Germany.

Tesco has several concerns to confront and resolve. Its position is furthermore unfortunate because it is sandwiched between discounters as mentioned above and high-quality, high-status chains such as Sainsbury’s, Morrisons, and Marks & Spencer. Tesco invested in its own-brands and in prepared as well as fresh meals, and yet it is still not considered in the same class with the high-quality chains. Those chains have a much clearer proposition with regard to product and service quality than Tesco. In addition, analysts argue that Tesco’s stores have become complicated to shop — they are too large, hard to navigate, difficult to find products needed from a selection too broad, and particularly too difficult to find value. (2)

From 1994 until the end of 2005 the market share (MS) of Tesco climbed consistently from 17% to 30%, surpassing in 1995 Sainsbury’s, the leader until that time, and leaving all food and grocery chains far behind. Since 2006 and until the beginning of 2014 Tesco’s MS was essentially stable (30%-32%), then it started to slip below 30%, according to data of Kantar Worldpanel reported by the BBC. Sainsbury’s has kept floating between 15% and 20%. Three challengers are notable — although they are still well below Tesco, they can and do cause trouble for the leader: (a) Morrisons (11% after a steep leap forward from 6% to 10% in 2005); (b) Asda (Wal-Mart’s branch into the UK , 17%, climbed mainly until 2005); Aldi & Lidl (MS grew more slowly from 2% to 4% until end of 2010 and then accelerated in almost four years to 8%). Kamal Ahmed, Business Editor of the BBC, suggests that the position of Tesco has been eroded due to structural changes in retail attributed primarily to online shopping, overall weakening position of the four big chains, and customers who want “smaller daily top-up shopping”. (3)

It seems early to predict if the recent slip in MS is a sign for an ongoing decline, and it depends very much on how Tesco will react. As already indicated by CEO Lewis, Tesco is going to reduce its range of products. It may have to consider the scale of its Express sub-chain, that might got too large. It will have to carefully assess if it can and should compete again hard over price with upcoming discounters or develop and enhance other competitive advantages like shopping-related services and in-store design. Tesco is already in the midst of a project to re-model and improve the layout and design of its stores (“Transforming Our UK Stores”). While part of this work is dedicated to improving their Extra stores, Tesco’s management may want to consider alternative approaches to these stores. For instance, re-arranging the store as a cluster of several autonomous shops under the same roof (e.g., food & grocery; personal care; home improvement & gardening; repairs) which shoppers can visit independently and pay at separate cashiers.

Extended Lines of Business

Tesco has added a variety of services “in a supporting role”, that is, they do not intuitively belong in a food and household merchandise retail business but they may be regarded as facilitating acquisition and fulfilling complementary needs of customers who come to shop at the chain-stores. But even under this flexible definition, Tesco may have reached too far. Consider just the next few examples:

  • Tesco Bank provides, in addition to current accounts, also savings, loans, and credit card services (even car insurance and travel services are available);
  • Tesco Mobile offers mobile telecom service packages and smartphones, and has even introduced its own-brand tablet device “hudl” (generation 2 just launched), acting as a technology company;
  • Tesco operates a network of gas stations for shoppers to fuel their cars;
  • Extending from beauty and cosmetic products for personal care, Tesco is also in the healthcare and pharmacy business, supplying medications, medical devices and NHS-approved services;
  • Internet services (broadband, e-mail & storage) are also available from Tesco.

The top management of Tesco may have to show greater scrutiny not only with regard to the range of product types it displays in its stores (and online) but also those supplementary services and products, finding a correct balance between benefit and value they provide and the burden and complication they cause.

Tesco owns the analytic company Dunnhumby as a subsidiary to perform in-house the important work of analysing purchase and personal data of Clubcard customers, and exploiting new possibilities of Big Data, to produce intelligible insights. Yet, the retailer needs to make sure that Dunnhumby keeps to its original charter. Expanding services to external clients, for instance, could complicate its activities too much, distract the company from fulfilling its vital duties for Tesco, and expose it to unnecessary business risks.

Customer Service —  Tesco is repeatedly criticised that its in-store staff is not available and helpful enough. It has been further argued that over-reliance of the retail chain on automatic self-service scan & pay posts in its stores (instead of human cashiers) signals to customers that the staff tries to avoid contact with them. These customer concerns are worrying especially given the difficulties in shopping at large and product-crowded stores. Problems with customer service may better be resolved in parallel to issues of merchandising as well as store layout and interior design to obtain greater improvement in customer-shopper experience.

Tesco has made great effort to execute an inclusive Brick & Click approach in its retailing business, not to foresake any of the physical and online channels. The retailer furthermore works to keep the channels inter-linked. It established, for example, a Click & Collect service —  to their convenience, customers can make the order online in the morning before work and pick-up the shopping package from a store of their choice (out of 260) on their way home. It is a demonstration of effort in the right direction.

Reaching Internationally — Tesco is operating store chains in twelve countries beyond the UK, either under direct ownership or through franchising and co-operation with local retail chains. Besides nearby Ireland, the group’s overseas reach is mainly into Central and Eastern Europe (e.g., Czech Republic, Poland, Hungary, as well as Turkey), and Asia (e.g., India, Thailand, South Korea). A discussion of global operations should take into account economic, cultural and legal considerations with respect to each country. For example, operations in China had to be ceased; they are expected to restart in a new formulation with a local chain. Nonetheless, the venture of Tesco in the US, that lasted between 2007 and 2013, is knowingly the most damaging and embarrassing for the company. Its Fresh & Easy chain of neighbourhood supermarkets on the West Coast was hit by a strong opposition from US-based strong retailers, mainly Wal-Mart and Trader Joe, and in addition its approach was not well accepted by the American consumers. Tesco eventually had to fold out and leave the country.

Vis-à-vis the slip in market share of Tesco in the UK, sales of the retailer at home dropped by 2.6% in first half of FY 2014/15 (Feb.-Aug. ’14) compared with the same period last year. Like-for-Like sales (same-stores, excluding petrol) fell by as much as 4.6%. However, the more alarming outcome for stakeholders and analysts about Tesco has been a decline in profit of 55% in the UK (trading profit for H1 stands at £499m post-correction out of  £23,566m in sales, a margin of 2.3%). (4)

Overall, the sales of Tesco group (£34bn) fell 4.4% and trading profit (£937m) declined 41%.  Both Asia and Europe have seen a fall in sales, though profits in Asia dropped (-17%) and in Europe they increased (+38%). Markedly, Tesco Bank  has enjoyed a rise in both sales (4.6%) and trading profit (16%), to the envy of the retailing business. Analysts doubt that Tesco can overcome and offset these declines by end of the financial year in February 2015. The upcoming Christmas and New Year season is clearly crucial for Tesco. It is also needed as an injection of optimism for its share price that fell from nearly four pounds to £2.50 in the past two years, and then dropped furthermore to just £1.50 in September, recuperating somewhat lately to a little below two pounds.

Undoubtedly Tesco has made positive moves into the 21st century to enhance the consumer shopping experience in its brick-and-mortar stores, establish its presence online, and strengthen endurable relationships with its customers. Yet, improvements it achieved have been swollen in the wave of expansion in different directions, wherever it seemed possible and connected somehow with its main field of business. It is, therefore, ever so important and desirable for Tesco to identify and focus on those areas wherein it is more competent, especially with respect to improving the quality of shopping experiences of individual customers.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Tesco Group Interim Results: Financial Performance, H1 2014-15 (26 weeks ended 23/8/14), Press Release 23 Oct., 2014 http://www.tescoplc.com/index.asp?pageid=188&newsid=1074.

(2) Tesco Admits Accounting Missteps; Stock Slides, Stanley Reed, International New-York Times, 23 Sept. 2014

(3) Tesco Share Slumps After Raised Profit Error, BBC News: Business (Online), 23 Oct. 2014 http://www.bbc.com/news/business-29735685

(4) Ibid. 1

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As a shopper approaches the entrance to a store or shop, and walks through the doorstep, he or she quickly figures out how inviting the venue is. Does the store look interesting and compelling, showing a potential for exhibiting merchandise articles of value? Or does the scene look so crowded and messy it is hard to believe one can find there anything he or she may need or desire? More basically, do the store’s interior design and display appear pleasant to the eye or annoying? While consumers generally like to keep things simple and in good order, some degree of visual complexity can help to capture shoppers’ attention and make the store more attractive and inviting for prospect customers.

A simple design, stripped of any form of art and modestly furnished for displaying merchandise, stands the risk of being perceived too boring to justify spending time in the store or shop. An element of surprise, a break from the ordinary or standard, may be necessary to intrigue the shopper and entice him to enter and study the store more closely. But deciding on the right measure of complexity can be difficult. A store owner may not want to complicate its design and display to a level that is overwhelming for the shopper, making it hard for the eye to absorb (e.g., an unruly mixture of deep and flashy colours, every furniture or fixture in a different form and style). Challenging the shoppers is welcome, but the challenge should be carefully planned and designed so as not to scare them off. Importantly, planning for visual complexity is not just a matter of amount but even more so a matter of its form and composition.

Introducing variability (e.g., in shapes or colours) and irregularities (e.g., construct displays in non-parallel lines), for example, increase the complexity of a design. Complexity does not have to be extensive — a few elements can be sufficient to spice-up the design of a store; and even a disruption of “normal” order can have rules. When increasing visual complexity in the store one should take care to maintain the aesthetic appearance of its scene. In reference to the design of products, Hekkert (1) proposed four goals towards an aesthetic and pleasant visual design: maximum effectiveness from minimum means (e.g., use a few and simple features, apply correlated features that co-align into a meaningful construct); unity in variety (i.e., follow specific principles like those of Gestalt to maintain order and control in variety); striking a balance between novelty and typicality that excites but does not shock the consumers; and, co-ordinate between stimuli that relate to the different human senses.  Hekkert argued that the aesthetic experience should be considered in tandem with the experience of meaning and emotional experience. We may refer to these goals as a benchmark for constructing discernible but sensible complexity — for instance, breaking away from a Gestalt principle (e.g., symmetry) increases complexity, but it should be done without dissolving the whole organization of the store’s scene. Such guidelines could be of particular relevance for the design of product display, that is, visual merchandising.

Visual complexity may arise from different factors such as the number and range of elements or objects in a scene, the variety and density of visual-graphic features present (e.g., colours, shapes, texture), and deviation from principles of organization and regularity (e.g., symmetry, similarity, repetition). Clutter is associated with complexity but is not synonym with it. Clutter frequently represents the objective information-side of complexity, that is, the (excessive) detail and (weak-structured) layout of information in the scene. It is viewed as a driver of complexity though it is not the only facet to consider. Visual complexity, on the other hand, often reflects the personal subjective perspective, such as the evaluation by individuals (e.g., with respect to attractiveness) and their response to complexity. However, references in research to ‘complexity’ can be as complex and diverse as the term itself suggests. The effect of visual complexity on consumer processing, evaluation and behavioural response is important with respect to appearance of products and their packages, ads, webpages, and scenes of retail and service physical environments.

Store owners have the choice whether to display more or less merchandise in the main space of the premises, and where and how to display it (e.g., on tables, counters or shelves at the centre, along the wall, or as a fixture attached to the wall). Additional elements of interior design would accompany the display to create the overall impression for the shopper-viewer. Orth and Wirtz (2) tested direct and mediated effects of visual interior complexity on store attractiveness in two types of environments, deli stores (merchandise-oriented) and coffee shops (service-oriented). They showed that greater complexity (e.g., many products crowded on a long counter) hurts the perceived attractiveness of the store. Attractiveness is furthermore mediated by the pleasure experienced by shoppers-viewers from the display and overall scene. That is, lower attractiveness is driven, or can be explained, by shoppers being unhappy with or annoyed by the visual scene. It is also attributed to a decrease in processing fluency of the more complex visual scene (fluency is mediating between complexity and pleasure). The consequences, as this research shows, can be a behavioural tendency of avoidance from a more complex store and weaker intention to revisit it.

  • The researchers measured “attractiveness” with respect to aspects of overall attractiveness, product quality and price level. However, information on products and prices was only implicitly shown but not manipulated, or alternatively not shown at all.  Hence, our ability to learn how complexity, as an attribute of visual design, fares in its effect on store attractive relative to the other two aspects is very limited. The effect of complexity that seems truly to matter relates to pleasure experienced from viewing the store’s scene, pertaining particularly to its visual appeal (not mentioned in the scale of attractiveness) — complexity is less appealing to the eye. This experience is sensibly influenced by the lower fluency when perceiving the visual scene.

A rich view into the store-perhaps too rich

But the case for visual complexity in the store is not yet lost. The answer for employing complexity to the advantage of the store or shop may be in selectively implementing particular layers or facets of visual complexity in the interior design and visual merchandising of the retail outlet. We may learn a lesson from research by Pieters, Wedel and Batra (3) who analysed visual complexity and its effects in the context of advertising from the consumer perspective. They made an important distinction between “feature complexity” and “design complexity” and showed that these layers of complexity have opposite effects on attention and attitude (through techniques of eye-tracking and direct questions).

Feature complexity refers to the variation, density and layout of visual features (colour, luminance and edges) across a whole scene. For example, an ad image that contains more colours all over is more feature-complex. In other words, feature complexity is enhanced as the eye has to shift more frequently between areas of different colour, luminance or texture and cross more edges of objects and frames. Clutter is associated in this account with feature complexity. Design complexity pertains to the appearance of identifiable objects contained in the scene (e.g., a picture of a product or a fashion model figure, a brand logo). The six criteria defined by the authors may be divided into two groups: (a) criteria concerned with the appearance of specific objects (irregularity of object shape, dissimilarity of objects [differ in shape, colour, texture or orientation], and having more edge and colour detail); (b) criteria concerned with the layout or arrangement of objects ([greater] quantity, asymmetry of object arrangement and irregularity of object arrangement). It is noted that configuring and designing the appearance and arrangement of particular objects is to a great extent in the control of ad designers, and hence their better ability to determine the level of design complexity of the ad. Pieters and his colleagues substantiate the following differing effects of feature and design complexities:

  • Feature complexity reduces attention to the advertising brand (e.g., its name heading or logo). Furthermore, greater feature complexity (visual clutter) hurts consumer attitude towards the ad.
  • Design complexity increases attention to the pictorial elements in the ad as well as to the ad in whole. Moreover, higher levels of design complexity improve attitude towards the ad.
  •  (It is also shown that greater design complexity together with better brand identifiability in the ad enhance ad comprehensibility, probably by improving consumer ability to attach associations inferred from the ad with the focal brand.)

Extending insights from ads to brick-and-mortar retail stores is not quick and easy. First, an ad is a two-dimensional image whereas the store’s space is a three-dimensional scene — our perception of visual effects differs between 2D and 3D views (e.g.,  a photograph compared with the actual location). In addition, ads often incorporate an heterogeneous mix of different types of pictorial and text elements and other graphic features, conjoint in a discontinuous layout not possible in a physical 3D space. Nevertheless, some insights on visual complexity seem applicable also to the interior design of a store and to visual merchandising.

Consider these two examples for increasing design complexity in a store:

  1. Imagine a shelf display on a wall where merchandise articles (e.g., sweaters) on each row are in a different colour; suppose we now arrange items so that in the center we get, for instance, a circle filled with items in a colour different from the remaining display, thus adding a colour while “breaking” the horizontal rows of the shelves.
  2. Suppose we created a display composed of small square tables on the floor with merchandise articles (e.g., books) on top; we may add complexity by placing one table in a different shape (e.g., triangle), or moreover add a stand in an irregular shape.

Another issue may be raised with regard to design complexity, whether instead of manipulating visual aspects of specific fixtures or props it is better to manipulate their arrangement and for example set asymmetric or irregular layouts. These design variations may serve to make a statement or highlight cues about the store’s image. The challenge is not to lose sight of the whole scene to avoid rendering it too confused, disturbing or difficult to follow (i.e., cluttered). We may further realise that even in a store the visibility of a brand logo, large photographic images posted on walls and other signage count, no less than in ads — they support brand identifiability and visual merchandising.

A classic stationary shop re-modelled to fit 21st century

A classic stationary shop re-modelled to fit 21st century

If a retailer is cautious and prefers to start in a middle ground, here are a few possible avenues for action. Front windows make a good place to start. Particularly the cabin-type window displays that are closed on the back and block the view into the shop’s space sustain a scene that is closer to 2D. The front window displays are of special importance because they provide shoppers the first introduction as they approach the shop. And of course one may also on advertising for the store, such as for an ad that includes a photographic image of the store. Specifically for ad posters that are intended to be shown in the store (e.g., new fashion outfits, deals), Pieters, Wedel and Batra recommend that they should reduce feature-based clutter as much as possible because of the short duration shoppers are expected to be exposed to those ads. Photo images of a store may also constitute a practical and suitable medium for studying consumers’ evaluation (e.g., visual appeal) and attitude given an exhibited level of complexity in the store.

Introducing visual complexity in a store is a matter of form, composition and style. Not just the extent of complexity created but also in what ways it is done will determine its acceptance and favourability by shoppers. Ultimately visual complexity needs to stimulate shoppers to purchase. Applying aspects of design complexity is the course for store owners or managers, and visual merchandisers and interior designers working with them, to exercise their creativity. But it is essential at all times to keep an eye on the overall scene outcome so as not to fall into a trap of creating too much visual clutter and confusion.

Ron Ventura, Ph.D. (Marketing)

References:

(1) Design Aesthetics: Principles of Pleasure in Design; Paul Hekkert, 2006; Psychology Science, 48 (2), pp. 157-172.

(2) Consumer Processing of Interior Service Environments: The Inerplay Among Visual Complexity, Processing Fluency, and Attractiveness; Ulrich R. Orth & Jochen Wirtz, 2014; Journal of Service Research, 17 (3), pp. 296-309

(3) The Stopping Power of Advertising: Measures and Effects of Visual Complexity; Rik Pieters, Michel Wedel, & Rajeev Batra, 2010; Journal of Marketing, 74 (Sept.), pp. 48-60.

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