The starting point of our post is a simple, yet fundamental acknowledgement. Stores in the past decades have become so much more than the distribution outlet of a firm, they’ve become a stage where a brand is able to interact with its customers.
By visiting stores, customers are able to ponder and evaluate their purchase decisions by “processing” both physical and emotional stimuli. Customers will, in fact, usually balance the functionalities of a product with its cost, but at the same time, the location of the product itself is going to play an essential role in the customer’s final decision to buy or not to buy a good or service.
Kotler himself in the popular framework of the 4Ps of Marketing realised how Place – or distribution – makes ¼ of any strategic marketing decision. The importance of distribution is connected to the fact that retail stores can be designed with the intent to influence the customer, and get himher to buy products by allowing a store to reinforce specific emotional notes.
Store atmosphere and emotional reinforcement are particularly important in those industries where customers feel that they are buying undifferentiated products. In this case, in fact, the store experience, or the purchase experience makes all the difference. Therefore understanding the importance of a store atmosphere is paramount for today’s retailer and in this post, we are going to discuss how something so intangible as a store’s atmosphere can be broken down into more manageable components, so that we may actually draw some actionable recommendations for those store managers who are looking to build more “experiential value” for their in-store customers.
These are the topics we are going to cover:
- Understanding what are the building blocks of a store’s atmosphere.
- How customer interactions work in a retail store.
- Transforming a store’s atmosphere in a customer purchase experience.
1. Understanding what are the building blocks of a store’s atmosphere.
The first challenge when trying to “strategize” around the emotional and intangible elements of a store’s atmosphere is actually identifying all of the elements that can contribute to the creation of an atmosphere and to the development of customers’ perceptions.
Perception is a key term, as in the context of certain industries, such as luxury fashion, much of the price tag can be attributed to the service component that customers experience when purchasing, rather than to the actual manufacturing price of the good itself.
We can break these “atmospheric” factors down in two categories: sensory elements and design elements.
- Sensory elements. These elements are those which relate to the customer’s senses. Four out of five senses are usually directly engaged in the customer’s experience: sight (colour, lighting, shapes and sizes), hearing (tone, music, environmental sounds), smell (scents), touch (softness, smoothness). Taste instead is not usually involved in the experience, even though flavours can be evoked with certain environmental stimuli.
- Design elements. Design elements instead are connected to the physical structure of the store and can be broken down into five categories: the exterior design (façade, store sign, store windows etc.), the interior design (the flooring, lighting, dressing rooms, multimedia appliances etc.) the store layout (how space is organised within the store, the criteria for grouping merchandise), interior displays (the way which is adopted to displaying items), and point of purchase communication (this refers to the support material for display and sales provided by the producers with the aim of guaranteeing a recognisable, preferential space for their products.
These elements are usually combined with an overarching theme, capable of providing an aesthetic and/or entertaining experience to customers. A theme also allows simplifying the communication with customers by leveraging the use of imagery and cultural values which are aligned with the brand. Themes can be a way to further exemplify or clarify the voice of the brand by connecting to different cultural elements. Themes could span from tradition – may be connected to the brands’ country of origin – to entertainment, to technology, to history etc. In this sense, a theme allows to avoid “stimuli overload” and give customers a clear perspective to interpret the retail environment.
Additionally, a theme will allow creating store rituals, which are a remarkable component of the store’s identity.
2. How customer interactions work in a retail store.
The goal of store “atmosphere” design is to use design and emotional impulses to create a sense of detachment from reality. The rituals and rites which are performed in a store are an essential component to creating a stage. Perceiving the store as a stage is very important as it allows customers to start their “journey” as spectators first, before becoming buyers.
Customers will be able to process the information as observers and understand the experiential dynamic provided by the store. As discussed in more depth in this article the type of experience provided to your store visitors can be usually broken down in four categories:
- Entertaining. An experience designed to engage with customers in a fun, playful manner. Entertainments add to the experiential factor, making the store a place to visit more often.
- Educational. An experience designed to engage with customers by explaining the behind-the-scenes of the brand, from its material features to its mission and values.
- Aesthetic. An experience designed to provide a sense of wonder associated with the arts. This could be achieved by setting up stores in historically significant buildings, or by being ambitious in terms of the store’s architecture.
- Escapist. An experience designed to detach customers from reality by providing highly-immersive activities. Augmented reality and virtual reality play an important role in this context.
The atmosphere provided by the store is then processed by customers according to a model (Mehrabian and Russell) that foresees four separate stages:
- The provision of environmental stimuli. As discussed throughout the post, individuals will receive external stimuli in the context of the retail store.
- Personality variables. Each individual will then process the stimuli in a personal manner, based on their specific character or emotional traits.
- Emotional states. Each customer will then generate an emotional reaction to the stimuli provided. These reactions are subdivided into three categories: Pleasure (well-being, joy, happiness), Arousal (activation, interest, excitement), Dominance (knowledge and control over the environment).
- Response variables. This relates to the behavioural responses of the customers, which can be categorized into the macro-categories of approach or avoidance. A response could be as simple as to stayleave, desire not to interact, desire to communicate, increasedecrease satisfaction in relation to the expectations connected to the store visit.
As discussed, therefore, the store impacts customer behaviour through the psychology of stimulation, therefore impacting hisher perceptions and attitudes. This is why store managers need to design the store spaces so that the desired customer reactions can be triggered.
There is no ideal atmosphere that can suitable for any market, therefore to better inform the store management decisions, five key factors need to be considered:
- Physical Setting. This relates to the spatial features of the environment.
- Social Setting. This relates to the individuals that interact with customers while making their purchases, including both sales staff and other customers at the time of purchase.
- Temporal Perspective. The time available to make the purchase, or in other words, how much time the customer can expect to spend in the store.
- The motivation behind the purchase. What customers are really buying, aside from what they materially purchase.
- The Emotional States. The emotional state of the customer.
As a result, the decisions that will impact the store’s outlook and atmosphere are heavily focused on the specific customer that the store is willing to attract. A more detailed post on the topic of customer segmentation is available here. However, in general terms the following information needs to be identified to allow the store atmosphere to better resonate with its customers:
- The store’s customer target segments.
- Customer’s psychographic and behavioural profile.
- Identifying what reinforces the emotional reactions customers are seeking.
- Understanding whether a store atmosphere can create an attractive point-of-difference in relationship to the market’s competition.
Let’s now see an example of a customer experience design in the context of retail stores.
3. Transforming a store’s atmosphere in a customer purchase experience.
We have addressed this topic in other posts as well, such as this one as this is such a relevant topic in the context of retail management.
The best examples of how all of this information can be used in an effective and persuasive way are provided by flagship stores. We discuss this topic in this article, where we use some examples from Burberry to exemplify some best practices in this field. Ultimately the goal is to create an experience for our customers that can be both memorable and meaningful. But so much more can be accomplished. In times where we are witnessing a faster and faster transition towards omnichannel distribution and digital retail, we can see how new store designs are now revolving around the concept of a stage for the development of brand relationships. This approach can create returns that go beyond the in-store sales, and impact the overall brand equity of a firm.
As discussed in this post the store atmosphere is an essential component of the customer’s purchase experience, because of the way in which retail locations can be designed to generate both emotional and behavioural responses. We hope that through this post, you’ll be able to see on what levels a store manager can operate in order to use as productively as possible the opportunities and benefits associated with retail. In general, however, there are many trends that we can spot, as being more and more widely adopted worldwide, here follows some examples:
- More “open” sales spaces, allowing for a feeling of transparency and minimalism.
- Lighter colour palettes in internal and external design.
- Different types of flooring, so as to differentiate different store areas.
- Variable and adaptable lighting points.
- Rest areas where customers can relax.
- Multimedia kiosks.
- Integration between online and physical distribution.