Retail Store Design - UK - June 2007

SUMMARY

Abstract

What should retailers do to ensure that people buy from them and not from a competitor? How should bricks and mortar retailers respond to the intensifying challenges from online sellers? What role can store design play in ensuring that a retailer is high in the pecking order?

This report addresses several themes, looking at the role of good store design in helping retailers build sustainable, profitable businesses.

TABLE OF CONTENTS

Table of Contents

• Issues in the Market
• Definitions
• Abbreviations
• Market in Brief
• Plenty of store design activity
• Shopfit expenditure -- growth has slowed
• Shopfit costs vary considerably
• Adding value
• Upwardly mobile designs
• Doing things better and doing better things
• Avoiding 'clone Britain'
• Consumer confidence, win-win for designers
• Consumer spending and retail sales
• How consumers shop
• Age and gender divide
• Older consumers favour supermarkets that sell mainly food
• Grocery shopping can be a chore
  • Figure 1: Food shopper types, March 2007
• Clothes shoppers want a quick experience
  • Figure 2: Clothing shopper types, March 2007
• Key themes emerging in store design
  • Figure 3: key design themes within retail stores
• Future for store design
• Industry Insight
• Key Points
• Intense competition among designers
• Fragmentation among designers
• Retailer attitudes to design process
• Are retailers dumbing down?
• More shopfitting sourced abroad
• Are retailers still using design agencies?
• Demands on design
• The pace of change is increasing
• Shopfitting is just part of the equation
• Emerging design themes
• ...flexibility
• ...white box is still thriving
• ...large space stores tend to stick to the white box
• ...hot spots enhance mood
• ... where colour is more prominent
• Designing the ambience
• ...mixing finishes
• Use of technology at the point-of-sale
• How the Internet is affecting attitudes to store design
• Internet has become quite personal
• Changing expectations of time
• Retailers encourage lingering
• Pampering in retailing
• Retailers need to build desire
• Being seen to be green
• The 'prove it' trend
• Meaningful missions
• Value retailers putting on the style
• Design essential to add value
• Designing for the local catchment
• Risk-averse retailers looking similar
• Is solution retailing growing?
• The key lies in empathy
• Store design businesses will do more work abroad
• More competition will arrive from abroad
• Flagship outlets often have a different agenda
• Designing the changing room
• Men are from Mars...
• Creating distractions
• Shopping centre design
• Outlook for store design
• Internal Market Environment
• Key Points:
• Elements of store design
• Hard design
• Flooring -- a costly element in the shopfit
• Flooring must stand up to wear and tear
• Mixed floor surfaces a common theme
• Innovations in flooring materials
• Key themes:
• Screens at the point-of-sale lower costs
• Other hard design features
• Permanent and semi-permanent displays and features
• Props and displays -- inspiration and hot spots
• Non permanent point of purchase -- more joined up thinking
• Point of purchase materials -- encouraging impulse
• Estimates of the scale of the point of purchase market
• Atmospherics -- can be zoned
• The wrong music is a lot worse than silence
• ... music should be appropriate
• ... digital improves delivery
• ... central control ensures standards
• Suppliers of music
• Lighting -- trend to raise lighting levels
• Aroma -- emerging use of scents
• Multimedia explosion
• In-store advertising
• Broader Market Environment
• Key Points:
• The economy
• PDI and consumer expenditure
  • Figure 4: PDI and consumer expenditure, at current and constant 2002 prices, 2002-12
• Employment
  • Figure 5: UK workforce and employment, 2002-2012
• Inflation and interest rates
  • Figure 6: UK inflation rates, all goods UK, 2002-12
• Fast growth in number of UK households
  • Figure 7: Number of UK households, by size of household, 2002, 2007 and 2012
• Age of population
  • Figure 8: Population by age group, 2002, 2007 and 2012
• Property and planning issues
• The planning regime
• ... concentrating on redevelopment of town centres
• ... more refusals for out-of-town applications
• ... but food stores adding to non-food space
• ... new rules will favour refurbishment
• Mezzanine floor boom
• Outlook for major new schemes
• In the pipeline
• Several new completions in 2006 and 2007
• Flurry of future large developments
• Market in Context
• Key points:
• Retail sales
  • Figure 9: All retail sales, at current and constant 2002 prices, 2002-12
• Food retailing gaining market share
  • Figure 10: sales through food retailers and non-food retailers, at current prices 2002-07
• Retail concentration continues
  • Figure 11: Concentration of retailing, 2002 and 2006, plus estimates for 2007
• The online shopping channel
• So why bother going out to shop?
• Internet competition provides boost
• Strengths and Weaknesses
• Strengths
• Weaknesses
• Market Size
• Key Points
• Estimating market size
• Investing in refits
• The role of design agencies
• Market size for shop fitting
  • Figure 12: The UK market for shopfitting, 2002-12
• Market trends
• Lifespans are decreasing
• Wide range of costs
• Full or partial refits
• The Consumer -- Where They Prefer Spending Time
• Key consumer findings:
• Where consumers prefer to spend time
• Clothing stores are tops
• Food shops -- not just a chore
• Superstores not as popular...
• Rejecting 'clone Britain'
• Large surface stores appear popular
• Furniture shops low in the ranking
• Specialised shops also low in the ratings
  • Figure 13: Stores where consumers prefer spending time, March 2007
• Gender differences
  • Figure 14: Top five stores where men like to spend time, March 2007
  • Figure 15: Top five stores where women like to spend time, March 2007
• Enjoyment varies by age group
  • Figure 16: Top five stores where people like to spend time, by age band, March 2007
• Personal adornment stores where consumers prefer spending time
  • Figure 17: Personal adornment stores where consumers prefer spending time, by gender, age and socio-economic group, March 2007
• It's a girl thing
• How the men respond
• Flexibility and fast change
• How supermarkets with and without non-foods compare
  • Figure 18: Supermarkets and independent stores where consumers prefer spending time, by gender, age and socio-economic group, March 2007
• Women responsible for food shopping
• Families like larger non-food ranges in supermarkets
• Local indies favoured by older consumers
• Leisure Goods Shoppers
  • Figure 19: Leisure goods stores where consumers prefer spending time, by gender, age and socio-economic group, March 2007
• Where men like to visit
• Older music afficionados
• Mobiles
• Household goods and electronics
  • Figure 20: DIY, garden, electonics and furniture stores where consumers prefer spending time, by gender, age and socio-economic group, March 2007
• Garden centres capture 45+ shoppers
• Men like their tools!
• Strong male bias to electronics stores
• Where They Prefer Spending Time -- Detailed Consumer Demographics
  • Figure 21: Personal adornment stores where consumers prefer spending time, by special groups, working status, region, ACORN categories, commercial TV viewing, media usage and supermarket used, March 2007
  • Figure 22: Supermarkets and independent stores where consumers prefer spending time, by special groups, working status, region, ACORN categories, commercial TV viewing, media usage and supermarket used, March 2007
  • Figure 23: Leisure goods stores where consumers prefer spending time, by special groups, working status, region, ACORN categories, commercial TV viewing, media usage and supermarket used, March 2007
  • Figure 24: Stores where consumers prefer spending time, diy, garden, electronics and furniture, by special groups, working status, region, ACORN categories, commercial TV viewing, media usage and supermarket used, March 2007
• The Consumer -- Attitudes to Food Shopping
• Key points:
• A need for status quo
  • Figure 25: Attitudes to food shopping, March 2007
• How attitudes to food shopping vary
  • Figure 26: How consumers describe food shopping, by gender, age and socio-economic group, March 2007
• Shopping -- a necessity?
  • Figure 27: How consumers describe food shopping, by gender, age and socio-economic group, March 2007
• Wanted: less frequent changes!
• Sample this!
• Food store requirements
  • Figure 28: Desired improvements to food stores, by gender, age and socio-economic group, March 2007
  • Figure 29: Desired improvements to food stores, by gender, age and socio-economic group, March 2007
• Customer typologies within food
  • Figure 30: Food shopper types, March 2007
• Group 1: Aisle Browsers
• Who are the Aisle Browsers?
• Marketing message:
• Group 2: A Necessity
• Who are the A Necessity shoppers?
• Marketing message:
• Group 3: Get in, get out
• Who are the Get in, get out?
• Marketing message:
• Group 4: Enjoyable pastime
• Who are the Enjoyable pastime food shoppers?
• Marketing message:
• Attitudes to Food Shopping -- Detailed Consumer Demographics
  • Figure 31: How consumers describe food shopping, by special groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, March 2007
  • Figure 32: How consumers describe food shopping, by special groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, March 2007
  • Figure 33: Desired improvements to food stores, by special groups, working status, region, ACORN categories, media usage, commercial TV viewing and supermarket used, March 2007
  • Figure 34: Desired improvements to food stores, by special groups, working status, region, media usage, commercial TV viewing and supermarket used, March 2007
  • Figure 35: Food shopper typologies, by gender, age, socio-economic group, marital status, lifestage, working status, tenure, ACORN categories, region, commercial TV viewing, newspaper readership and supermarket used, March 2007
  • Figure 36: Where food shopper typologies enjoy spending time, March 2007
  • Figure 37: Improvements wanted by customer typologies for food shops, March 2007
• Retail Competitor Analysis
• Major suppliers to the sector -- Industry associations
• The Design Business Association (DBA)
• POPAI
• The National Association of Shop Fitters (NAS)
• Retail design companies
• Sector overview
  • Figure 51: Design Week consultancy survey, UK top 20 interior design specialists, 2006
  • Figure 52: Design Week consultancy survey, UK top 5 interior design specialists, 2006
• The market has been tough
• A fragmented industry
• Very varied results
• Some agencies struggling
• Outlook
• Astound
• Checkland Kindleysides
• Conran and Partners
• Corporate Edge
• Dalziel and Pow
• Dinn Associates (closed in 2007)
• HMKM (Hosker, Moore, Kent and Melia)
• The Imagination Group
• Loewy Group
• Lumsden Design Partnership
• Michael Sheridan (Sheridan & Co)
• The Nest
• 20/20 Design
• Shopfitters
• Sector overview
  • Figure 53: Leading UK shopfitting companies, turnover, 2005-06
• Long-term contracts -- the key to the future
• Creative competition
• Outlook
• David McLean Contractors
• ISG Dean and Bowes
• S. Dudley & Sons
• Withey Contracts
• Havelock Europa
• Hutton Construction
• ISG Interior Exterior
• Morris & Spottiswood
• Styles & Wood
• Point-of-purchase specialists
• Coutts Retail Communications
• Artform International
• PPE
• Point-of-purchase consultancies
• New Store Designs and Refurbishments
• Key findings
• Clothing and jewellery
• Adams, Bluewater (Designer: Inovus Path)
• George at Asda, Southend (Designer: Checkland Kindleysides)
• Beaverbrooks, Doncaster (Designer: Colin Williams)
• COS, Regent Street (H&M) (Designer: Pentagram)
• Gap (Designer: Dalziel & Pow)
• Jaeger, Regent Street flagship (Designer: in-house)
• Kurt Geiger, Liverpool's Met Quarter (Designer: Found Associates)
• Primark, Oxford Street (Designer: Dalziel & Pow)
• Slaters, Manchester (Designer: Dalziel & Pow)
• Thomas Pink, Sloane Street (Designer: Four IV)
• Woolworths Kids Store, Bedford (Designer: 20/20)
• Electricals/technology retailers
• The Carphone Warehouse, Oxford Street (Designer: in-house)
• Virgin Mobile, Essex (Designer: Judge Gill and Start Creative)
• Sony Ericsson, Kensington High Street (Designer: Checkland Kindleysides)
• House and home
• Habitat (Designer: in-house)
• MFI (branding by Circus)
• Heals, Tottenham Court Road (Designer: in-house)
• B&Q, Birmingham (Designer: in-house)
• Magnet (Designer: in-house)
• Zara Home, Regent Street (Designer: in-house)
• Pets At Home, Romford (Designer: 20/20)
• Food stores
• Aldi, Manchester (Designer: in-house)
• Tesco's 'greenest store', Wick (Designer: in-house and Astound)
• Department Stores
• Debenhams (Designer: in-house)
• John Lewis, Oxford Street (Designer: in-house)
• Fortnum & Mason, Piccadilly (Designer: Kinnersley Kent)
• Health and beauty
• Superdrug, Uxbridge (Designer: in-house)
• Books and recorded music
• Waterstone's, Manchester (Designer: Lewis & Hickey, London)
• Virgin, Manchester (Designer: Checkland Kindleysides)
• Appendix
• Research Methodology
• Consumer research
• ACORN