According to a report titled India Organised Retail Market 2010, published by Knight Frank India, between 2010 and 2012, the organised retail real estate stock will grow from the existing 41 million square feet (sq ft) to 95 million sq ft. The report says, during 2010-12 around 55 million sq ft of retail space will be ready in Mumbai, the national capital region, Bangalore, Kolkata, Chennai, Hyderabad and Pune.
Yes, that’s a lot of real estate. Now imagine the kind of business opportunity that represents for retail planners and designers. And thank brands that are thinking out of the box to keep shoppers engaged and spending.
A case in point is Italian automaker Fiat which is planning to open a lounge-like café to sell its cars. The first two cafés in Pune and Delhi will resemble an entertainment hub complete with a food bar, an area for film screenings, theatre and artwork. Fiat, of course, is ploughing money into this for a reason. The automaker’s sales in India have been dwindling and the company is banking on these cafés to draw traffic, build consumer connect and thus change the perception of Fiat cars in India.
Like Fiat, Indian retailers across the board — from auto brands, apparel makers to electronic majors — want to be more than just merchants and are striving hard to create ‘retail destinations’ where people can linger, learn and experience the brand.
While spends in the retail design space are hard to come by, industry estimates indicate brands spend anywhere between Rs 1,000 and Rs 4,000 per square feet on retail design, with the spends going all the way up to Rs 7,000 per square feet for luxury retailers. According to the head of a retail design firm in India, last year companies shelled out close to Rs 120 crore (organised sector) to retail design consultants and experts and he sees this touching Rs 500 crore in the next two years.
Organised retail accounts for only 8 per cent of the overall retail industry (with 40-odd retailers dominating the pie). Experts believe 2 per cent of the unorganised segment will migrate to the organised segment every year, which means the organised sector will be close to 40 per cent of overall retail in the next 10 years. Opening up of FDI (foreign direct investment) in retail will, hopefully, give further impetus to retail design, leading more Indian brands to consider the store environment more seriously.
And the reasons are many. With product and technology at a level playing field in many industries, brands are banking on the experience to differentiate themselves. As a design consultant puts it, “Companies want to create retail spaces which are an extension of the brand DNA and difficult to imitate and commoditise.”
Driving brand perception
Retail design firm JGA’s chairman, Ken Nisch, who has partnered with Bangalore-based design house Future Research Design Company (FRDC) for retail projects in India, says, “Retail design needs to go beyond interior design. It needs to be implemented with strategic intent to ensure the retail landscape reflects the core values of a brand.”
Brands are slowly getting mindful of that. Take the example of Coimbatore-based yarn company Jagannath Textiles, which, till now, retailed its Crusoe brand of innerwear through multi-brand outlets. Recently, the brand opened three flagship stores in Coimbatore, Mumbai and Kolkata to help build a distinctive identity for the brand. “The objective was to build an image around innerwear which is otherwise a rather drab category,” says Sanjay Agarwal, founder, FRDC, which has conceptualised the store design.
Crusoe is trying to replicate what successful women’s innerwear brands worldwide like Victoria’s Secret have done by using retail as a way to build the ‘wow’ factor around its brand. Customer insight revealed that inside every person there is a sense of adventure, and Crusoe translated this to its brand philosophy using ‘adventure’ as a theme for its stores. Water kayaks and skateboards are used as visual elements inside the stores. While Jagannath Textiles general manager (operations) Ganga Rathna agrees that investment to the tune of Rs 4,000 per square foot of design looks prohibitive, the company believes the gambit will pay off in the long term.
Then there is paint company Asian Paints, which is also dabbling with some interesting retail formats. Two years ago it unveiled a unique format, Colour store, to reinforce the company’s leadership in decorative paints. The one-of-its kind store in Mumbai is not a point of retail but serves as the image driver for the brand. “It helps us showcase the brand’s latest product innovations,” says an Asian Paints official. “Consumers can experience innovative products like chalkboard paint and glow paint which would be difficult to visualise in a regular dealer store,” adds the official.
The larger objective of this retail exercise was to change the dynamics of the way paint is retailed in India. Typically, paint buying in India is left to the mason or the building contractor; Asian Paints wants the end consumer to get involved. Thus, it commissioned FITCH, an agency headquartered in London, to design a concept that would make the paint buying experience enjoyable. Explains FITCH founder David Blair who spearheaded the design of these stores, “The purpose of the store is to help make paint buying a family affair. Hence we have dedicated areas within the store where even kids can engage with colour.” Asian Paints’ second Colour store has opened in Delhi.
If you are into retailing a service, retail design becomes even more important. Two years ago, Hindustan Unilever’s Lakme Beauty Salon approached design firm Eureka Moment to refresh the look and feel. Lakme spent close to Rs 2,000 per sq ft for the makeover. “Previously Lakme parlours had a very functional design, which did not bring out the brand values,” says Shanoo Bhatia, founder-director, Eureka Moment, and chairperson of the National Design Committee, Assocham. “After surveying the preferences of Indian women, we decided to go for design that was rooted in tradition but contemporary in style. We used the Mandala motif as an inspiration and extrapolated the geometry of the motif to design the space. The design was flexible enough so that it could be translated to a tester unit in modern trade to an entire retail facility,” adds Bhatia.
Customer at the centre
A good design needs to carefully incorporate consumer psychology and demographics. “Retail design is not always born out of market research; it can come out by simply studying the target group very closely,” adds Ashwini Deshpande, founder-director, Elephant Strategy + Design. She recalls her experience while working for Bajaj Auto when it opened its Probiking stores five years ago to retail premium bikes.
“While working with Bajaj Auto we realised that the premium bike customer is different from one who buys a regular commuting bike. He is passionate about bikes and therefore better informed than the regular salesman,” says Deshpande. In 2006, Bajaj began the rollout of Probiking stores, and the company has 32 such outlets today.
Deshpande says careful observation of consumers walking into the store helped tailor-make the retail experience at the new format. “In busy areas where the Probiking showrooms are located, it is difficult to experience the real thrill of the bike,” she adds. The company simulated the experience with the help of a device, the dynamometer (typically used at workshops for tuning bikes), which allows bikers to enjoy a life-like test drive. Bang next to the dynamometer, the company placed a fan and a mirror so the consumer could enjoy the breeze while riding his bike.
The format has done well; Deshpande claims the new stores began fetching three-digit sales in the first month of launch. Eric Vas, president, new projects, Bajaj Auto, who handles the business, says the investments in design may not have been justifiable back then. “Now, as we expand our arsenal with the to-be-launched KTM bikes, it will soon become viable,” he adds.
Tata International’s recent foray into shoe retailing with Tashi has also been driven by key consumer insights. To stand out from the scores of retailers in the segment, Tashi engaged FRDC to design an environment that will help change the way shoes are retailed in India. Unlike typical shoe stores where shoes are lined on shelves, Tashi decided to showcase shoes by type (casual, dressy, evening). “Visual merchandising plays a key role in retail design and arranging the shoes by type was based on the objective that it would aid the purchase decision,” says Agarwal.
Space planning is critical when designing a store. In the Lakme beauty parlour revamp, for example, the hair stations which were previously in the periphery were moved to the centre of the parlour. “This allowed us to use the periphery for installing reflective mirrors and brand communication. The whole idea was that customers seated in the centre of the Lakme parlour can view the surrounding communication and thus indulge in impulse purchase of services,” says Bhatia. Lakme products which were previously stocked near the reception counter were integrated into the hair stations to drive impulse buying among consumers who would have walked in to simply get a haircut.
Tashi shoe stores too made creative use of space by using wall displays where the shoe could be viewed from different angles. Seating inside the store was also scattered instead of the usual train-like seating arrangement. Tashi has a pedicure station that allows men to pamper themselves while waiting for their spouses while they perform the onerous task of making up their minds. “Indirectly, this is also a ploy to extend the time a woman spends at a store,” adds Agarwal.
When Tata Group forayed into prescription eyewear with Titan Eye+ it wanted the eyewear buying experience to be less intimidating. “Instead of frames tucked away in glass counters, we introduced the touch-feel format where consumers could try on eyewear lined against a wall. We wanted to create an environment which was not controlled by the salesman,” says Biju Alexander, divisional manager, retail, optometry and manufacturing, Titan Eye+.
Mix and match
According to Nisch, there needs to be stimulation and excitement to build brand loyalty and to allow people to regard the store not simply as a point of purchase but a vehicle to further their self-image. “Think of global brands like Selfridges in London, Bloomingdales in New York or a Hamleys toy shop. All their products are available at many places but people go there because of the excitement they deliver,” says Nisch.
In India many brands are trying to build in that ‘excitement’ factor through the use of graphics and other visual aids. When Westside approached FITCH three years ago to change its image of being ‘your mum’s shop’, the design house introduced interesting graphics to enhance the store environment. “Graphics in the retail store need to tell a story. It does better than having an army of sales assistants,” says Blair of FITCH.
Another example is Future Group’s latest premium food retail format Food Hall which has little nuggets of food wisdom alongside shelves that allow the brand to engage in a conversation with the consumer. “Food is a category in retail which is driven by culture, tradition and milestone,” believes Nisch. “Most of us have our early experiences about food — whether it is something special our mother made on holidays or food as it relates to wellness and lifestyle. Hence storytelling in a food environment is vital.”
To add a personal touch to its stores, Canon’s experience zones have a dedicated gallery that showcases photographs of the month, mailed by consumers through its online club.
In some cases, interactivity can be built in through the product itself. For example, Samsung has unveiled experience stores, Smartphone Cafes, where consumers can try out the phones. In an increasingly cluttered smartphone market, Samsung knows it is vital for consumers to experience its phones to make an informed choice. In the last two months, the company has rolled out 55 such stores, designed by Delhi-based retail design firm Shark Designs.
Deshpande of Elephant Strategy + Design says good design needs to take consumers beyond the listening mode. “Interactivity is key in building an emotional connection between a consumer and product and many are using technology to build surprises.”
Bajaj Probiking stores, for example, have an interactive wall mounted inside the dealerships that allows consumers to learn about the high-end features of the bike. The Asian Paints Colour stores have a revolving wall that helps the prospective buyer view different paint themes.
The Titan Eye+ stores have a style consultancy station that allows customers to take their photographs while trying on new frames. “This was based on the insight that when people with vision problems try out frames they are not able to see themselves clearly. This helps shoppers who are visiting the store on their own,” says Alexander.
Agreed, retail brands in India are nowhere close to their international counterparts when it comes to engaging prospects. For example, the Italian fashion house Prada’s store in Beverly Hills (USA) has interactive dressing rooms where a magic mirror allows you to see your outfit from all sides and send images to your friends. Likewise, Nike’s store in Barcelona has a Magic Book in the women’s section that allows you to check out the wall mounted television catalogue by moving your hands over a sensor.
Agarwal of FRDC says innovative use of technology will become more common in India as the retail industry matures. For instance, retail solution provider Nedap Retail is bringing social media right into the stores it is designing in India. It is believed that Raymond Group’s brand Parx, which is undergoing a design overhaul for its stores, will be one of the first brands to use tweet mirrors inside the store. These tweet mirrors will allow consumers to click a picture of their outfit and instantly send a photograph to a friend via a social networking site or MMS.
However, the retail environment can do only so much. If customer service does not reflect the brand story you are telling, the whole thing can go for a toss. Brands need to equally consider the return on investment. “Retail designers need to put on the business hat and ask themselves whether the client’s investment in design will bring the right returns,” says Jacob Mathew, co-founder, Idiom Design. In sum, companies that marry all the razzmatazz with pragmatism will be the ones to make business sense in the long run.
