RETAIL DIFFERENTIATION

Retail Differentiation: Key to Win Customers!

A brand has its personality. A few characteristics and propositions become unique to a product before it is recognized by the customer as a brand. A bath soap brand is characterized by its packaging and presentation, colour and content, fragrance and flavour, etc. and similarly a tooth paste brand by many other features. While a few of these characteristics of a brand are perceived, many are experienced in such a way that the benefits of such experience induce consumers to buy brand repeatedly. Shopping in an experiential retail store for a customer is like watching a good movie – one likes the theatrical ambience and one is glued to the screen for a few hours if it would offer a few thrills. Even after disengaging from the act of seeing the movie, the experience will remain as good scenes play back in one’s mind for a few days. Even after one is done with it one feels encouraged to share any good experience with others. In short, such an experience is something that makes one come back again to enjoy the same experience. Customer experience in modern retail stores hence is all about directly having a ‘first hand’ interaction with customers, offering them with such a satisfying experience that they would like to enjoy repeatedly. In the current economic scenario, retailers work very keenly on retaining customers within their premises for as much time as possible. Though modern retailers are rationalizing their costs, they are willing to spend on specific things that can make a positive difference to customer experience. They just want to offer customers the experience of shopping. So many retailers who have opened their stores in modern formats are trying to offer an enjoyable experience that customers seek. Providing great experiences to customers can easily be said than done. It involves a great deal of discipline in identifying those ‘experience enablers’ and consistently providing those to customers without fail. In modern retailing customer experience comes from a variety of factors that eventually would contribute to the store attaining leadership through the store’s delightful product/merchandise offerings or its operational excellence or through gaining intimacy with its customers. It requires building an image in the customer’s mind.

In India, as we are moving to the next phase of retail development, as stores have come up in the metros and as they all endeavour to offer experiential shopping, many have started looking similar. They are faced with the challenge of differentiating one form the other! One of the key observations by customers is that it is very difficult to find the uniqueness of a retail store. For instance, we have many stores claiming to be ‘fashion stores’ but one wonders whether they are truly differentiated as ‘fashion’ stores!

Looking more intently at the example of fashion differentiation for a store, fashion is one such significant route to win customers, which if done well, should offer true fashion value! Fashion is an offering strategy (catering to the niche segment of fashion) used by many retailers internationally to attain a cutting edge in a highly competitive market. The retailer here takes efforts to ‘position’ the store brand in the customer’s mind. As we know Al Ries and Jack Trout, many years ago have talked about Positioning, as a ‘battle of the mind’ and even today it stays to the extent of a store brand taking efforts to nestle its position into the customer’s mind breaking through the clutter. What is fashion all about? Here is how a fashion guru defines fashion, “Fashion is the manner of style of doing something that is accepted by a substantial group of people at a given time and place”. So retailing fashion becomes a dynamic proposition which should offer changing attitudes and styles as it has got by the very definition of fashion, spatial and temporal limitations. The true fashion retailers’ store image therefore is invariably co-existent with the fashion attitudes for relationship building with the customer through different points of interface - the store, the merchandise, the service and the communication. The fashion retail store creates the right atmospherics – the design of its space and its various dimensions like exteriors, interiors, merchandise, visual factors, odour and audio, etc. to evoke the fashion lifestyle differentiation.

The store exteriors for a fashion store are designed to make a lifestyle statement. The trends for the same keep changing with availability of newer materials and design possibilities. Hugo Boss has open large windows that the store can use as billboards to communicate the latest fashion look in the store. The signage is bold and minimal too.

The interiors in a fashion store are of special lifestyle design and are updated often as part of creating updated atmospherics in the store. Flexibility to support constantly changing Visual Merchandising strategies is also a key requirement. The density of fixtures is low as compared to basic apparel. In high fashion boutiques, spaciousness is a requirement to cater to the luxury needs of the high profile customers. Odour is very controlled as the customer is very sensitive to the same in the buying of lifestyle merchandise and accessories. Pleasing odour is introduced, like fresh flowers in ladies fashion-wear and fresh coffee in men’s fashion-wear store, to add to the differentiation of the store. Sound is the experience of music, which is carefully chosen and controlled in terms of the intensity and quality to assist in the experience. Different types of music are used to cater to the different target customers. High-end fashion boutiques could use western classical to contemporary Jazz depending on the positioning of fashion. For example, while Zara, a Spanish fashion retailer uses Latin American music, Ralph Lauren uses Jazz.

The visual factors relate to the visual communication strategy required to communicate the fashion statements of the retailer. Emphasis is given to display, visual merchandising, lighting, signages and specialized props. The visual communication strategy is planned and executed to promote fashion and also position the brand. Theme or lifestyle displays using stylized mannequins and props, which are based on a season or an event, are used to promote collections. In fashion retailing, the merchandise presentation ought to be very creative and displays are often on non-standard fixtures and forms to generate interest and add an attitude to the merchandise. The Abercrombie & Fitch store in New York is a preteen/teen fashion attitude store that sports non-conventional displays, often using live models!

The merchandise type in the fashion category is its exclusivity in addition to the quality and specialty of the merchandise mix. Specialized efforts are put into fashion forecasting, design and communication of the new merchandise range. Fashion stores often become the harbingers of fashion. Pre-season catalogues are sent as direct mailers to select customers so that they get to know what is to come in the stores. Fashion Shows are often organized in the stores to unveil the new collections with customers called on invitation. In fashion retailing shoppers enjoy change and so merchandise needs to be moved around frequently, combined with the introduction of new product lines so as to keep the customer engaged with the brand for fashion needs. The store’s unique range of merchandise assortment defines the merchandise mix. This is limited as compared to a mass merchandised store, in order to gain distinct fashion differentiation. A fashion store’s merchandise designs go through very short life cycles – internationally fashion stores like Swarovski and Liz Claiborne have a fashion life cycle of about 3-4 weeks and the retailer’s challenge is to hold the customers’ attention by keeping them between the growth and peak phase in such a short time while increasing the sales.

Differentiated employees set the service standards of the fashion store. Store employees, in a fashion store are consultants and not just sales and customer service personnel. Specialized training is imparted to them and in fashion lifestyle stores like Nieman Marcus they are trained to recognize and track the loyal customers, who shop above $50000 annually, by name and psychographics. Zara is said to attire the staff with the latest merchandise displayed in the store. The standards of customer service followed are high and personal and provide no room for any compromise. Thus while store employees would form part of the physical attributes, customer service standards will be a part of the intangible psychological attributes, in the process of building the fashion retail differentiation.

When a retailer chooses the platform for creating the right differentiation for the store, he needs to thoroughly understand and organize the elements, (as discussed above in the fashion example) that shall contribute to the creation and sustenance of the differentiation chosen for achieving business objectives. A confident and aggressive strategy will help create superior store brand differentiation and a brand recall that will foster a satisfying long-term relationship between the store and its customers.

Dr. Gibson G. Vedamani