Retail Design: Much More than Meets the Eye

retaildesignThe character of the places where we live, work, and, of course, shop, have a direct effect on our thoughts and emotions — whether we are aware of it or not. Everyone is reminded of this when we enter a majestic cathedral or a grand department store. Or when we feel so vulnerable as we navigate the unfamiliar underground passageways of a subway. It is extremes like these that make us fully aware of the impact of space and place. Our acute sensitivity to our surroundings is always influencing our behavior — often unconsciously. When we shop, every aspect of the store’s design is acting on our emotions — whether we want it to or not. One could argue that these largely unconscious emotions are no match for our conscious reasoning when it comes to guiding our shopping behavior and purchase decision-making. Right?

Not so fast. The growing and compelling body of behavioral research popularized in bestsellers like “Predictably Irrational,” “Nudge,” and “The Power of Habit” all point to the unconscious as the unseen master of our frequently irrational behavior. Nobel Prize winner Daniel Kahneman, author of “Thinking, Fast and Slow,” argues that the unconscious is firmly in the driver’s seat. He says our “thoughts and behaviors may be influenced by stimuli to which you pay no attention at all and even by stimuli of which you are completely unaware.” Surprisingly, he found that in many cases we are, in fact, more strongly influenced by such subtle stimuli when we are not aware of them. He concludes, “The main moral…is that our thoughts and our behavior are influenced, much more than we know or want, by the environment.”

Space and Place

So what does this all mean for retail design? It tells us that every aspect of the retail environment matters because it directly influences behaviors and decision-making, and, therefore, has a direct impact on business performance. Yet many retailers do not consider the effect of store design a key metric. Consumers know the power of a place intuitively just by recalling various shopping experiences. Think how specific thoughts and emotions surface when shopping at edgy Urban Outfitters versus optimistic Uniqlo; or cheerful Target versus austere Costco; or at impeccable Chanel versus flamboyant Versace.

In each case, the retail environment is made up of a multitude of design components: light, color, materials, sound, scent, the shape and size of the space, etc. There is endless variety within each design element. Think of color, for example; each color affects us differently. To complicate matters, the ways these design elements can be combined is truly infinite. So how do we begin to make sense of the design possibilities?

retaildesign_2The Power of Storytelling

Before we choose and compose the elements of retail design, we need a story to tell. For branded retailers, that story is an expression of the brand identity. Sometimes called brand vision, brand identity is perhaps the most important concept in retail design because it serves as the inspiration for, and framework on which, a retail concept is developed. It is key to the success of the design, but brand identity is a concept that is often poorly understood.

When you or I, for example, think of the brand Burberry, various impressions come to mind. Some of those impressions might be quite simple — like its signature red, black and tan plaid or its classic trench coat. Some of these impressions might be more complex, likely inspired by some notion of Britishness. All of the impressions that exist in our individual minds can be thought of as “brand images.” They are the images that form in our minds.

Brand identity, on the other hand, is what the brand is saying, or trying to say. It is based on the brand’s core values, fundamental substance, and essential character. Brand identity is that unique combination of attributes that define the brand’s aspiration, promise or dream. It is “the center of the universe” that serves as a frame of reference and inspiration for everyone who works on the brand, not the least of all the designers of the retail environment.

So does every brand have a brand identity that can serve as the basis of great retail design?

When a painter sets out to create a portrait of a mythical figure, such as an ancient Greek god like Poseidon, Aphrodite or Dionysus the task is already halfway done because there is so much existing material with which the artist can work. For example, the nuanced character of the wine-loving Dionysus has been richly revealed in countless stories. The artist’s task is to interpret and then depict the character and temperament of Dionysus in a recognizable form. In the same way, the task of the retail designer is to interpret the brand identity and bring it to life in many dimensions. While every brand has a brand identity, it is not always as clear and accessible as the legend of Dionysus. Sometimes it is concealed, or worse, misunderstood.

Branded Environments

The character of the brand is also sometimes ignored by narcissistic retail designers who are intent on placing their own imprint on the store design, rather than serving as an interpreter of the brand. The first essential step in creating an engaging and powerful retail environment is a clearly articulated view and deep understanding of the brand identity.

Indeed, to maximize a brand’s economic contribution, all manifestations of the brand — retail environment, product, logo, promotion, service and even corporate policies — must reference the same “center of the universe.” In other words, the consumer-influencing power of the brand can only be fully realized when, as they say, everyone is singing from the same hymn book. Within luxury, we can see this coherence most clearly realized by Chanel, where a quietly elegant modern “less-is-more” sensibility is systematically applied across all product categories and promotional campaigns. The store is the physical manifestation of this sensibility where refined luxurious materials are consistently composed and applied with impeccable craftsmanship.

A different approach is Tommy Bahama’s brand identity. This brand is based on an idyllic, refined, tropical island lifestyle where one is more likely to wear silk shirts and tailored pants than Speedos and a T-shirt. The store design reflects and reinforces this vision through the use of sophisticated tropical references. In keeping with a refined aspirational aesthetic, there are no fishing nets draped across the ceiling, no faux pirate chests or Tiki totems. Instead, the island references are subtle, the materials refined — finely woven grass cloth, white bead board, wide-plank wood floors and ceiling fans. Caribbean wooden shutters are used throughout to evoke the memory of tropical sunlit days and balmy breezes. The store layouts are regular and ordered with a formality of design to reinforce the notion of a stately home. The result is pleasing, accessible and casual but also sophisticated.

At the Millennial end of the spectrum, Anthropologie’s bohemian “flea-market chic” stores have irregular layouts, mismatched furniture and fixtures, and authentic-looking folk-inspired art. The stores are celebrations of the strange beauty of imperfection. And, by inference, they acknowledge and allow you to celebrate your individuality. The coherent artisan store design actively brings the brand to life. It complements the eclectic merchandise assortment and helps imbue the product with cultural meaning — which ultimately justifies its price.

As consumers, we instinctively recognize retail environments as different as Anthropolgie, Chanel, Tory Burch, and Giorgio Armani, where the designs actively reinforce and reveal each brand’s identity. These retailers are exceptional. They have an integrated strategy that communicates their position and personality to consumers. Too many branded retailers fail to fully extend their brand identity to the store. This is a major missed opportunity. The store, as the center of the omnichannel universe, represents the most compelling opportunity to influence customer choice, leveraging consumers’ high sensory sensitivity to every aspect of their environment.

Solomeo, the Italian Medieval hill town surrounded by the fertile countryside of Umbria, is the headquarters of cashmere brand Brunello Cucinelli. The architecture, landscape, history and culture of this special place are a rich source of inspiration. This place, interpreted through a romantic philosophy, is at the center of the brand identity — which is beautifully revealed in the product and promotional campaigns — but not in the stores, which are generic gallery-like spaces. While the neutral retail environment focuses attention on the product, there is more to the brand than the product. And this is clearly demonstrated simply by looking at the rich Brunello Cucinelli digital presence. It won’t be easy, but it is time to bring this beautiful brand to life at retail.

Perhaps the most compelling reason for retailers to focus on using good design to bring the brand to life at retail is to satisfy the human heart and mind’s ongoing search for a coherent story. As humans, we are, to a fault, pattern seekers. We jump to conclusions and are wired to see a whole that is greater than the sum of the parts. Our natural instinct is to connect the dots, making visual and emotional sense of the seemingly disconnected threads of a story. Retailers can make our job as customers infinitely more satisfying by creating an integrated plan with coherent design that touches every part of our experience with their brand. It is not just pleasing; it is profitable.

The Grooming Boom: This One’s Gonna Stick

Martial Vivot at his salon on West 39th Street in Manhattan, Friday February 11th, 2011.

Mampering. Manscaping. Guy-brows. There are lots of lame new monikers attached to a bonafide beauty movement with big-bucks potential: The rise of guys as committed, trend-savvy – and, dare one say it, glamorous – consumers of product and services.

Have we been here before? Kinda. Since the mid-Aughts, there have been a handful of ship-on-the-horizon upticks in the men’s grooming market, enough to embolden such establishment brand behemoths as L’Oréal Paris and Dove to roll out initiatives like Men’s Expert and Men+Care, respectively.

But while L’Oréal SA and Unilever (the corporate papas of L’Oréal Paris and Dove) can afford to take a flyer on a new product range that may or may not jibe, here’s how you know when the rising guy tide is poised to lift all boats:

A) When tiny niche brands gain traction right out of the launch gate; [Read more…]

Overfranchising: When Category-Killers Just Can’t Stop Cannibalizing

overfranchisingMaybe you’re Maybelline.

And maybe, because you’re Maybelline, you produce one of the most beloved mascaras of all time. Yes, Great Lash is one for the ages, a perennial box-office champ for the last 44 years. In this era of here-today, gone-tomorrow product launches, that preppy pink and green tube of makeup magic is in a class by itself.

In the prestige arena, Lancôme has enjoyed a similarly mammoth success story. Though its Définicils High Definition Mascara is 20 years younger than Great Lash, urban legend has it that one is sold – somewhere, globally, from Boston to Beijing — every three minutes.

Clearly, these two brands have carved-out massive slices of the brutally competitive mascara pie, proffering products women the world over genuinely adore. [Read more…]

Beauty’s Buying Blitz: It’s the Early Aughts All Over Again

NYX Cosmetics at Yigal Azrouel Spring 2015 - BackstageIf it weren’t for the massive stack of 2015 promo calendars clogging our mailbox (thank you, Triple-A Termite Control and Super Shiny Carwash!), we’d bet our bottom dollar it was 2000 all over again.

At least this seems to be the case for the beauty business, which is currently on an acquisition spree, the likes of which we’ve not seen since the go-go early Aughts.

But before we dive into any serious tea-leaf reading, let’s recap the M&A landscape of the past year.

Acquisitions on Steroids

In 2014, L’Oréal Group snapped up a whopping six brands: three that are primarily skincare (Magic Holdings International, Decléor, Carita); two in hair (Niely Cosméticos, Carol’s Daughter); and one in makeup (NYX Cosmetics).

The Estée Lauder Companies, while less acquisitive, nonetheless swooped in with three third-quarter purchases, adding two fragrance brands to its portfolio (Le Labo and Editions de Parfums Frédéric Malle) and one in skincare, Rodin Olio Lusso. [Read more…]

Vegan Is the New Black

dana_veganWhat’s more mainstream-American-beauty than Christie Brinkley? Christie Brinkley selling her upcoming face and body de-agers on HSN, that’s what. And for an extra dose of apple-pie wholesome, how about a Christie Brinkley beauty counter at Kohl’s?

But here’s what isn’t so by-the-book about Christie Brinkley Authentic Skincare: just like the 60-year-old stunner herself, it’s 100 percent anti-animal cruelty. In fact, it’s vegan. As a decades-long vegetarian and staunch wildlife advocate who spearheads anti-poaching missions in Africa, Brinkley made damn sure her eight-SKU range doesn’t contain a trace of animal anything.

If this were 10 – even five – years ago, Brinkley’s product positioning might have been deemed a gamble. Yes, the line’s core raison d’être is anti-aging; vegan is only one chapter of the story she’s telling. But the fact that Brinkley will be able to riff about why eschewing animal ingredients and testing is important to her — on the massive platform that is HSN – speaks volumes about where the beauty industry is headed these days. [Read more…]

Coty Sinks In Its Claws

shutterstock_152473550When it comes to spending sprees, November 2010 was a doozy for Coty, Inc. In rapid succession, the New York-based, publicly held global powerhouse scooped up the German makeup company Dr. Scheller Cosmetics AG for an undisclosed amount; the touchy-feely Philosophy skincare brand from the Carlyle Group for an estimated $1 billion; and OPI, the pro nail care line famous for lacquers with cheeky names like “Skull & Glossbones” and “Wooden Shoe Like to Know,” for another (rumored) $1 billion.

At the time of those purchases, Coty, then a $3.6 billion entity, was billing itself as the world’s largest fragrance company. By rounding out its portfolio with these brands, the plan was to reduce its reliance on the recession-plagued perfume biz, carve off a bigger slice of Germany’s beauty pie, and inch toward its stated goal of $7 billion in revenue by 2015.

While it would be hard to argue which was the splashier score— Philosophy or OPI, both of which are wildly beloved by consumers— the latter allowed Coty to not only tap an entirely new distribution channel, but also expand its foothold in the supernova that was nails circa 2010. [Read more…]

MAC: All Things to All People…Even If That Maybe Isn’t The Best Idea Right Now

MACUpfront disclaimer #1: MAC is one of the best beauty brands of all time.

Now that that’s firmly out of the way, let’s commit a little heresy and posit that maybe, just maybe – and this is solely one industry-watcher’s opinion, Makeup Artist Cosmetics, founded in Toronto in 1984 by two guys both named Frank (Toskan and Angelo), snatched up by the Estée Lauder Companies in 1998 for a cool $60 million, has lost sight of its North Star.

How do you know a colossal cosmetics company, one that cut its teeth with professional makeup artists and deployed 6’7” drag superstar RuPaul as its very first spokesperson, may be veering off track? When it announces its hot new collaboration with…Brooke Shields.

Upfront disclaimer #2. Brooke Shields is incredibly beautiful and an American institution. [Read more…]

For Moroccanoil, Imitation Is the Most Litigious Form of Flattery

DanaWood1In all likelihood, only Novak Djokovic logs more court time than the corporate counsels of beauty brands in possession of a true rarity; an original idea. Breaking ground in a new category of product? Be prepared to spend your days fending off a slew of increasingly shameless copycats.

Flashback to 2006: An obscure “hair oil” – created not by an A-list coiffeur, but by under-the-radar Montreal salon owner Carmen Tal – starts trickling into the public consciousness. It’s derived from the nuts of argan trees, which are indigenous to Morocco, and is laced with hair-soothing fatty acids. Sure, argan oil is good for other stuff, like preventing heart attacks. But who cares about that when it can deliver livelier, lusher locks? [Read more…]

Q/A with William P. Lauder

William_Lauder-1We sat down with William P. Lauder, Chairman of The Estée Lauder Companies, the $10 billion global beauty juggernaut, and talked about the evolving retail landscape, the importance of knowing your consumer and the opportunities and challenges of globalization.

Robin: William, we’re living in what we believe is the biggest transformation of the industry in the history of retailing, and therefore in wholesaling and branding as well. Some CEOs are saying it feels like the Wild West. Others feel like they are living in the chaos of technology that is far ahead of our capabilities to totally understand and use it.

And here is The Estée Lauder Companies, the undisputed leader in their space, right in the middle of it all. You served as CEO from 2004-2009, when you transitioned to your current role as Executive Chairman. During these ten years, the business has nearly doubled. So, I know you’re really smart, but is there also a bit of luck working here as well?

William: When I first joined this company in 1986, I perceived that my mission was to gain the experience to do what we needed to help the company be at the forefront of prestige aspirational beauty around the world. In 1996, more than half of our business was in North America. Now more than half our business is outside of North America. Emerging markets like China and Russia were very important, and we had a low share of market in those countries as well as in Europe, the UK and elsewhere. So, we saw a greater global opportunity where the pie was expanding, as opposed to our huge share of the US pie, which was static. [Read more…]

Innovation and Prosperity: A Primer on Private Brand Fragrance Development

shutterstock_115177768Why aren’t more retailers getting into the private brand fragrance game?

In the fashion retail marketplace, developing your own private fragrance brand, especially for specialty apparel chains, is a powerful way to take share from larger multi-brand stores. The single brand strategy resonates so well with consumers today, from Millennials to Baby Boomers, at all levels of the marketplace — from mainstream to luxury. Multi-brand retailers can use private or exclusive brand fragrance to enhance their businesses. These proprietary brands reinforce uniqueness; can be used as promotional tools, gifts-with-purchase, or other innovative marketing techniques.

For retailers who have the will and the vision, the development of private brand fragrance products represent an opportunity for significant financial gains combined with the strategic leverage of merchandising exclusive, compelling products. This is a wonderful opportunity to showcase the creativity, imagination and innovation of your company – – just what is necessary today to differentiate yourself and be successful in the retail space. While nothing is ever guaranteed (and especially not in retail), the development of private brand fragrances can potentially lead to tens of millions of retail profits. [Read more…]

The British are Coming, The British are Coming

RR_MarigayMarigay McKee’s Revolution?

First of all, along with many industry luminaries, I extend a warm welcome to Marigay McKee to this side of the pond, and especially to New York City: the most intensely competitive city in the most ferociously competitive country on the planet; massively over-stored; stuffed and web-sited; and with the most complex distribution and marketing infrastructure in the world. And I’m sorry to start off with such a negative tidbit, but as people get to know me they understand I tend to remind them of the darker side of things. Usually my observations are followed by: “so good luck!.” And in Ms. McKee’s case, it’s augmented by: “particularly since she is coming from the role of chief merchant of one privately-owned store to president of 41 publicly-owned stores, with a lot of underperforming doors.” [Read more…]

Sex Sells

L Brands Deep Dive

I recently attended L Brands half-day investor meeting, where management presented its long-term strategy. While the absolute priority remains growing the North American business, in fact doubling it, L Brands hopes to sustain significant international growth. Finally, Les Wexner who has a place in the halls of retailing as one of the best specialty retail operators, has succumbed to the lure of international markets. vs_under

What positions L Brand apart from its competitive specialty apparel retail set is that it’s not in the apparel business and it’s not in the fashion business. L Brands competes in lingerie and beauty, two product categories that are staples (non-discretionary relatively low price points; and high emotional content (based on fabulous storytelling) for Victoria’s Secret (“VS”), Pink, La Senza and Bath & Body Works.

To quote Les Wexner’s opening comment “I think our year will be good, perhaps very good, unless Washington completely mucks everything up.” Unfortunately, as each day passes the likelihood of a muck-up is more and more real. That said, Les and his team control the controllables with a tight rein on all points of brand interaction with the consumer and employs a partnership/franchise model with a small number of world-class partners to expand beyond North America. This translates into L Brands retaining control or “owning” assortment, pricing, promotions, store design and real estate approval, while franchise partners make the capital investments, and supply the local real estate and retail selling organization skill sets. [Read more…]