The Strategy of Retail Design
By Patrick Dalessandro
You don't often hear the name Michael Porter bantered about the halls of retail design firms. At some level that is ok, as long as you are not telling your clients that you're thinking strategically and acting tactically. In today's world of 24-hour news cycles and consumer-centric marketing, it is easier to say you practice strategy than actually understanding its basis and history.
Porter is often referred to as the father of modern competitive strategy and is likely more familiar at the high strategy and consulting firms than typical design companies. Porter himself is a formative force in business and academia. As the Bishop William Lawrence University Professor at Harvard Business School, Porter continues to drive the practice of business strategy forward.
Applying Porter's Concepts
Knowing who Michael Porter is does not qualify someone as a business strategist, but neither does just saying you are a strategist. Understanding how to apply his concepts, models & approaches to the design process does. In the design industry, the challenge is to effectively communicate to design staff and clients; the need for strategic integration as a requirement in the design process and understand how the strategy process steps can impact the quality of a store design.
Whether looking at a new retail concept, considering entering a new region, or simply redesigning an existing space; retailers and/or their design firms should always ask themselves, "Why?." As an example, one of the most widely used tools in strategy consulting is the Five-Forces-Model. Used in the retail design process, this model can be employed to determine whether the entrée into a new market makes sense. Put more simply, it will answer the question of "Why?"
More and more of our clients are demanding that retail designers better justify the need for investment in design. Therefore, the question is not "should a retail design firm be in the business of retail strategy?" After all, there are firms that are highly qualified to do the deep thinking. Think McKinsey, Bain or Accenture. The question is, "How can we advise our clients if we do not understand how they think?"
Most mature retailers lean heavily on strategy to improve retail operations and to expand. These same businesses are using the same strategy processes to rationalize change, even at the design level. What is good for the goose is most definitely good for that gander.
When McDonald's asked Francesco Cordua, their Retail Experience Director (and a retail strategist in his own right), to better define how they managed restaurant design, store roll out and future costs for design at the franchise level, he adapted basic principles of strategic development to justify the decisions he made. He was not asked to approach his job this way; he was expected to. As a result, McDonald's can now better plan for future design initiatives and give their franchisees more predictable and cost effective paths for location refresh. For a company that has much of its value tied up in its real estate, investing in design and upgrade has had positive results with the consumer and the market.
So what does this mean for those of us on the front lines, communicating with our clients daily? At a minimum, we are expected to understand how guys like Francesco make decisions, and to communicate our design decision with the same level of business acumen.
In order to sustain clients and better communicate with them in the future, designers are evolving to become strategic thinkers and designers. Developing a strategy practice as a support tool provides the design firm the ability to deliver what is expected. Justification is formed by both client design staff and the "C level" suite. This approach is not revolutionary; it is simply evolutionary.
At JGA we practice the "Business of Design and the Art of Partnership." By integrating the basics of strategic thinking into our business, we deliver value and serve as trusted advisors to our clients, no matter their size.
As Director of Client Strategy, Patrick is responsible for both business development and program delivery. He leads multiple design efforts by integrating strategic positioning of brand and retail design to evolve our clients' brand position and improve consumer experience. His knowledge and institutional insights into the retail consumer are integrated into conceptual development and strategic positioning for retail operators, manufacturers and brand marketers, having worked with clients such as Xerox, Macy's, Porsche, Coca Cola, Verizon and Penske Racing. For more information, email firstname.lastname@example.org or call 248.663.1681.
Now Open: McCormick
World of Flavors
Now consumers can add a little spice to their shopping at the new McCormick World of Flavors. Located at the Light Street Pavilion Harborplace in Baltimore, this is McCormick & Company's first retail destination. A 3,800 square foot brand showcase, the retail experience features McCormick's range of products with areas focusing on cooking, baking and grilling. The store also features other McCormick-owned brands, including Lawry's, Old Bay, Zatarain's and Thai Kitchen. Guests can enjoy interactive and educational displays, cooking demonstrations and samples from across their product range. See more photos at Chain Store Age.com, or read more details from the New York Times here.
Open in Chicago:
Gloria Jeans Coffees
The Australian-based retailer recently opened its new prototype at Chicago Ridge Mall. This "Coffee House of the Future" designed by JGA delivers a more experiential guest visit each time. A whole bean coffee area provides demonstrations on their extensive range of coffee beans, while expert purveyors highlight various brewing methods. A new merchandise and gifting area allows shoppers to customize gift packages. And at the Barista Espresso Bar, guests can watch and enjoy baristas extracting perfect shots of espresso. CEO of Gloria Jean's Coffees USA, Neil Gill, said, "Guests will love the new coffee house, as our vision is to deliver a great coffee experience to our guests in a unique, contemporary environment."
Project Showcase: dressbarn
In a fresh space that reflects her style and taste; attention to detail, finishes and lighting combine to create an overall ambiance, defining collections and categories to give a new intimacy to dressbarn. Opening in locations throughout the U.S., dressbarn features a variety of focal wall formats, using white, painted detail and articulated backgrounds to add variety to the space. The Fitting Room Zone becomes a world of its own within the overall store environment. Generously proportioned and detailed fitting rooms accented with custom wall covering communicate the warmth and character of the store into this important touchpoint. Read more here.
Ken Nisch Addresses
India Retail Forum
On October 9, Ken Nisch addressed the India Retail Forum in Mumbai, taking part in their "Knowledge Series" and hosting a Master Class on Visual Merchandising: A Powerful Tool for Making First Impressions Count. Considering that 70% of buying decisions are made through sight, visual merchandising has a dramatic effect on brand perception and sales. Ken's workshop covered strategies for effective merchandising and display, while providing insights on how to increase sales. For more on the three-day event, read more here.
Firm Founders Join Operation Inspiration
JGA recently hosted a reception for our associates, and Ken Nisch welcomed firm founders Jon and Adelyn Greenberg to take part. Staff members who attended the 2012 International Contemporary Furniture Fair in New York City shared their impressions on the event and presented an "inspirational" compilation of favorite show exhibits and NYC flagships. Jon, who turned 87 last month, shared his inspirations as well, recalling working with Valentino in the 70's as he created a shop-in-shop for the iconic designer at the original Somerset Collection in Troy, Michigan. Jon remarked how his use of "mirrored slatwall" was revolutionary at the time and Valentino was equally inspired by the result.
USA Today: Discounters Hit 50
In a story celebrating the 50th anniversary of the leading U.S. discount retailers, Kmart, Walmart and Target, retail reporters Jayne O'Donnell and Hadley Malcolm shared how 1962 was a pivotal year for all three brands. In the cover story feature, Ken Nisch explained how "Kmart brought the carnival aspect of shopping - the idea of deal and excitement around price." Ken added that the arrival of Kmart into the Toledo, Ohio suburbs meant the end of long trips downtown with his family. For more, read here.
Chicago Tribune: Nike Chicago Gets Makeover
Chicago Trib reporter Corilyn Shropshire recently reported on the transformation of Nike's North Michigan Avenue flagship with a distinctive new look and name: Nike Chicago. Addressing how Nike's renewed focus on the customers is on track, JGA Director of Client Strategy, Patrick Dalessandro, said, "It's time to say 'thank you' in so many words. When you look at Millennials and Gen Xers, we want to be celebrated and feel the brands we embrace, embrace us back." For more, read here.
Retail Environments: Nisch on Brazil's Burgeoning Retail
In the September-October issue of Retail Environments, Ken Nisch shares his commentary on the explosion of Brazil's rising middle class, leading to a more financially secure consumer and opportunities for retail to grow, especially with the 2014 World Cup and 2016 Olympics impacting everything from airport retail to shopping malls. Read here for more.
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