Retail secret four: “I’m just looking”
Every time anyone browses a store, they’re wandering around the pages or aisles, shouting at the top of their lungs “COME ON RETAILER! INSPIRE ME, MAKE ME WANT SOMETHING!”
In this chapter we explore
- the role of discovery in customer engagement
- merchandising for inspiration
- why customers crave this inspiration.
Even a pencil can surprise
New York store owner Caroline Weaver’s left forearm features a life-size tattoo of a pencil. This might give you a clue to the nature of her store’s stock. Caroline likes pencils and has made selling pencils and pencil ephemera her business. Don’t tease me but so do I. I do a lot of this writing malarkey and there’s something about scratching notes with a favourite pencil that is more satisfying than writing with pen or straight into the computer. But though I’m a weirdo who likes to buy the odd dozen box of Tombow Mono 100s, plenty of ordinary customers have stumbled upon and fallen instantly in love with Caroline’s crazy but certifiably brilliant shop, and online business CW Pencil Enterprise (cwpencils.com). In her first year, Caroline has sold 109,896 pencils at an average per customer spend in-store of $20 and $50 online.
What Caroline has done is a template for brilliant customer inspiration. She has instinctively landed on a coherent Big Idea. Her incredible knowledge of the product, way beyond that pencils are generally made of California incense cedar and have a marking core, means every customer can rely on great suggestions for odd little unique pencils that perfectly meet that particular customer’s need state. But it is in the discovery, curation and storytelling that CW Pencil Enterprise so excels. These humble little analogue pencils are lifted to become something special, personal and meaningful. How Caroline has done this in-store is especially brilliant: the tiny shop’s precise but incredibly accessible visual merchandising screams discovery. You want to pick pencils up and explore their stories.
I know your instinct as a reader is to tease us mercilessly, but I challenge you as a retailer to visit CW Pencil Enterprise and not come away full of ideas and admiration. Each pencil is celebrated and collections precisely curated. There are the Portuguese scented pencils that make great gifts, there are the semi-synthetic vintage IBM test marking pencils loved by crossword puzzlers, there’s a poster from a great writer explaining how a dozen soft-tip pencils pre-sharpened in the morning help his ideas flow through the day. There’s a lovely physical illustration of the process of making a batch of pencils from wooden blocks to finished article. All of it enriches the discovery experience through curation and narrative.
Because pencils have a credible use, this single-minded store is able to transcend its novelty status. It’s more like a guitar shop than, say, a place devoted solely to popcorn or ice cream sandwiches (both of which are actual stores that exist within a five-block radius of this one).
New York Times
Even the problem of the very low average price of the product is addressed by stocking high-margin pencil sharpening machines, premium options and offering a bespoke service to imprint pencil barrels that will become more popular only as the service becomes better known. You need to visit Caroline’s store to work out what of its brilliant construction you can transfer to your own formats. And trust me, there is a lot.
But it’s still just a pencil
And then there’s the cult Blackwing pencil. If you want an example of pencil-related madness, it is the near legendary Blackwing 602, first made in 1934 by the US arm of Eberhard Faber. But this is also a story of how a humble product can be positioned such that it transcends inherent value and becomes something around which a retailer can build discovery, curation and narrative.
The 602 was distinctive for two reasons: at the blunt end, it featured a flat and wide ferrule (metal bit) with an innovative clip mechanism that held a proper removable eraser, but it was the graphite that was special, a unique formula gave the pencil exceptional writing properties that produced a dark line even without the writer pressing hard. The pencil’s barrel carried the slogan “half the pressure, twice the speed”. Sold for a few cents each, over time the 602 became a staple favourite with writers and artists including John Steinbeck, Chuck Jones and Stephen Sondheim – until we all went mad for computers in the late 1980s and early 1990s when the pencil, in general, began its sales decline. The end for the Blackwing 602, late in the 1990s, was especially ignominious. The machine used to stamp and form the clips holding the removable eraser broke and nobody in the factory could see any point in fixing it. Once the stock of clips ran out, the 602 was dead.
Then, in 2010, US pencil maker Cal Cedar Products bought the trademark and set out to recreate the lost Blackwing under the Palomino brand. The resurrected legendary pencil is selling by the truckload, at $22 for a box of a dozen, incredibly expensive in pencil terms. Do a Google search for Palomino Blackwing and marvel at the cult status a pencil can achieve. There’s even a club for people who modify their Blackings. What do you stock or what sits within your specialism that you could build such appreciation around with a little authentic history and a design twist or two?
And if you want an original 1950s Eberhard Faber Blackwing 602, Caroline Weaver will sell you one. For $75. And she says they do sell. That’s customer psychology in a nutshell. We value, and will pay a premium for, the emotional payload of the thing that most satisfyingly meets our need states, but as customers we need the inspiration of discovery, curation and narrative to get us there.
Inspire me and you’ve got me
Let’s take stock. We’ve begun to think of our customer interactions in terms of friction and reward, we’ve worked out what our retail business is for and we now understand what needs customers bring to us – and, hopefully, you’re looking at ways to meet those needs.
We’ve got customers reliably browsing us, they’re on our websites, they’re noticing our social media, they’re coming into stores and opening apps. Now we need to inspire those customers to buy our things.
“Inspire” is a very deliberate word. Unless you operate in one of the extremely rare retail sectors in which demand outstrips available points of supply, you must actively work to inspire customers to click on a product, request a test, choose from the menu, handle a product and look at it.
Do that, and you increase the potential for a sale dramatically. In the physical world, Paco Underhill’s observation business Envirosell discovered that up to 80% of customer journeys are fulfilled by the customer either buying (or coming back to) the very first thing they interact with. It’s a form of bounded rationality where we make decisions based on the immediately available information rather than considering all possible alternatives and outcomes. In this case, where an alternative solution to need states might be distant and nebulous, because we haven’t found or seen that alternative yet, so the one in our hand takes on a greater significance. After which, loss aversion kicks in. We’ve found a solution we like and we then measure all other alternative solutions against it, all the while becoming slightly nostalgic and fond of the original solution. Everything the customer considers after interacting with that first solution has to work much harder to fit need states and beat that first solution.
Think back to the last time you bought an item of clothing and you’ll recognise this. You find something that fits your need states but you know there are other options out there so you might leave the first and explore the alternatives. Sometimes, one of those alternatives is the one you end up buying but think about how much internal persuading you had to go through before deciding that it definitely was a better option. Loss aversion forces you to measure the new alternatives against the original one that was unaffected by comparison.
“Long story short – get a customer to interact with something and you’ve kick-started a complex tangle of behavioural economic theory. You’ve made them put that first thing on a nice little psychological pedestal. Which is good for you as a retailer.”
Online, the hard and fast numbers are less well-established in terms of how many purchases are satisfied eventually by the first thing a customer interacts with. It feels instinctively right, though, to assume that the same psychologies that bias towards the first item of engagement in physical interactions are in play in virtual environments. Though perhaps it is in a weaker form, given that it lacks the tactile triggers. Mind you, we’re not far away from devices that will enable us to have multi-sensory interactions with virtual items.
Three things that inspire engagement
In the past we could open a store and line shelves with product. If the product was right and the shopfit appealing enough to the right customer segments, then people would come and buy. Online, retailers tended at first to replicate this format: a shop front in the form of a logo header, and then grids of product. It is online that the cracks in this approach are most obvious in that nothing stands out, scrolling pages of product fast becomes a chore. For many retailers, especially those without first mover advantage, despite relevant product and keen pricing, people didn’t come.
It is no longer effective to follow this basic model. It has all the sophistication of a toddler playing shop and no retailer can thrive under it. The task now is to inspire interaction through discovery and I have a structure for that, based on my observations, research and conversations with the world’s best retailers. Often, those retailers will see their own circumstances differently, might even give their “system” a proprietary name, but what I’ve done here is package all those successful ideas and systems into a set of universal tools. It works and running your own business through these processes will pay dividends.
So, there are three things that are consistently in place within those winning retailers:
- Discovery: they build formats that force discovery by incorporating it strategically and structurally.
- Curation: they creatively limit choice using curation and editing of ranges to prompt interaction.
- Narrative: they tell stories in which customers can easily recognise a benefit that relates directly to themselves.
We will deal with curation and narrative in the next chapter. For now I want to look at discovery and explore its powerful role in making it natural for customers to want to engage with you and your product.
Inspiration to interact happens when retailers build discovery-rich formats, populate those formats with curated ranges of products and services, and then use strong narratives to show customers how easily they can put themselves into those stories.
In practice
Here are two examples of modern retailers that are doing all three brilliantly. In the first, I’ve chosen to concentrate on Williams-Sonoma’s physical mastery of discovery, curation and retail narrative but it is a retailer that also does the three of them extremely well online. In the second example, I’ve looked at Everlane, currently only online, but, as you’ll see in Secret six, that is a label that is fast becoming meaningless.
Williams-Sonoma
Prodding the senses and the imagination
The smell of pumpkin-spice cider, a warming deep autumnal scent, transports me away to a New England autumn with the golden leaves starting to cascade from the trees … Williams-Sonoma has got me. Outside it’s a grotty urban mid-western afternoon, cold and mean but inside I’ve taken just a few steps yet travelled a thousand miles.
This high-end cookery and housewares retailer gives the absolute masterclass on sense-based retailing: smells of food being cooked all around the store, the sight of seasonal cues everywhere, taste of the samples dotted about. It’s that pumpkin-spice cider. Pumpkin bread there. Mash and sweet gravy in another section. Even sound gets a look in as, on a proper full gas hob, there’s a big pot of something nice bubbling away in a satisfying chatter. What does that leave? Touch? Well there’s plenty of stuff to for that.
Client after client tells me this sort of thing is impossible in their stores. Nonsense. You want to create a taste of what your product leads to? You can do it. This particular Williams-Sonoma, packed with the emotional context of its market sector, is selling the pleasurable and satisfying feeling of cooking good food for friends and family. It isn’t even that big at around 300 square metres, yet packs demonstration and discovery into every corner.
Everything in the range feels curated, as if to say, “If we stock it, you can trust it.” One fantastic example of this is positioned with considerable narrative skill. An extremely expensive collection of pans is promoted with, “This is the last cookware you’ll ever buy” and the display then goes on to explain that this is heirloom cookware, pans you will pass on. It’s such a simple, yet powerful, story. It lifts a bunch of saucepans into something laden with wonderful images of longevity and family.
Williams-Sonoma is built around discovery of things that will make you not only a better cook but will improve your experiences of cooking for the people you care about. It’s warm and cozy and very shoppable.
Everlane.com
Transparency and rewarding virtue
64% of millennials, Everlane.com’s target customers, would rather wear a socially conscious brand than a luxury one. That truth, one that is reflective of a trend that means if you’re reading this two years after I’ve written it, that 64% will be higher still, is the narrative, where an amazing level of price and manufacturing transparency provides the discovery. In this case, customers discover that they can make both a socially conscious purchase and do so at a lower price than they would expect. Powerfully, Everlane’s price transparency – every item has its materials, labour, import duty and transport costs shown together with Everlane’s mark-up – makes customers feel that they are part of a fair trade.
Everlane’s format is founded on a Big Idea that is to be a radically transparent retailer of classic wardrobe staples. So a T-shirt isn’t a sweatshop-produced basic but a classic imbued with the story of the factory in which it was made, the people who made it, the narrative of socially conscious production and the discovery that these things can be bought at a reasonable price.
Research business Forrester says there are 8,000 places where you can buy a white T-shirt online; for Everlane to have discovered a way to make theirs attractive is a big achievement. The business sells “tens of thousands” of them every month.
The company does something that, on the surface, might appear to be anti-discovery. Rather than offer seasonal collections, it adds products one at a time. Some items have been in the collection for all of the five years Everlane has existed. Founder Michael Preysman says the clothing has “a current point of view”, but suggests that items “can also be worn in ten years” and encourages customers to wear items for as long as possible, as part of a sustainability message.
Each new item has a story of its manufacture and pricing built around it, again imbuing everything with an authenticity and character that is very effective. The whole range covers just 200 pieces, all of which fit a recognisable Everlane look. It is a curation that customers love – they like being part of the Everlane story and trust the company as a source of socially conscious fair-priced classics.
The three keys to inspiration
So let’s break down each of these three essential tools of customer inspiration. We will start by looking at the ways retailers can build discovery-led formats. In the next chapter we will move on to the power of curation and narrative.
Discovery
All three of these ideas are roughly talking about the same thing: the moment a customer interacts with your product or service because they’ve found something that fits their need state. The benefit of prompting discovery, of inspiring customers to pick something up or click on it for more detail is gigantic. Here’s how to make that happen.
Discovery features at some point every time anyone shops, online or off. Even the customer who is certain they just want Heinz tomato ketchup week in and week out is disruptible by a good promotion or interesting new alternative – and they delight in it. The point at which discovery is made may shift but no shopping trip is ever made without it. As retailers, we can benefit if we can manage discovery to our advantage, and the good news is that there are some usefully formal ways to do that.
Sometimes the discovery will be made before leaving the house or opening the page, research having been done online, via media and among friends. That type of discovery certainly applies to a more significant degree to big-ticket items but even then the decision reached is observably disruptible, especially by promotions but also through knowledgeable intervention and definitely by stock availability.
Many customers who leave home knowing what they want, having extensively researched it and used all the tools online to help with that, are still open to persuasion once they arrive at a store and begin to actively shop. We see the same thing online where customer journeys that have come direct to a specific product page are stymied by an out-of-stock item or by a recommended alternative.
Discovery makes people interact with things. Make a customer say “Wow” and, more often than not, you’ve got a sale. Discovery is not just about showing customers surprising things, it is the complete process of helping to guide them to the highlights of your range, to the great promotions, to using great service and support to lead customers to the right choices.
A reputation as a store that can meet customers’ sub-conscious desire for discovery will drive your clicks and footfall. So long as you’re consistently meeting needs and you’ve got the framing right, creating formats where discovery is at the heart, will also actively contribute to your business gaining First Visit Advantage.
There are broadly four approaches to integrating discovery: promotion-led, service-led, product-led and total-format. Some retailers can combine more than one of these. When you get to the Stew Leonard’s case study, you’ll find a great retailer that combines all of them.
1. Traditional promotion-led discovery
Traditional promotion-led discovery is still the most common way retailers incorporate discovery and, if you’re able to offer great deals, it’s very powerful. The availability of those deals is only half the story, though. Promotions must be supported with great visual merchandising that brings them right to the surface.
The key elements are:
- creative promotions
- a variety of promotions
- a near-guarantee that there will be a deal for every customer, every time
- consistent low prices on core products
- a retail-type that encourages regular revisits
- a celebration of the offers by putting them in good locations and regular inclusion of the “good stuff”
- store layout that includes plenty of hot-spots
- a planned customer journey that leads visitors between those hot-spots.
Tesco (UK)
Tesco is the international blueprint for promotion-led discovery. Go as an observer and learn how to select, place and promote offers brilliantly. The business might have gone through troubles in the early 2010s but its singular ability to offer killer promotions remains intact.
Aldi (Germany)
The powerful trick Aldi has pulled off is to persuade customers that the entire store is one big price promotion. Aldi isn’t just about being cheap, though. Efficiencies in logistics, ranging and buying, as well as reduced location, store-fitting and staff costs are all positive, but the product itself is good and sometimes extremely good. Watch middle-class couples ransacking the incredibly cheap, but very high-quality, steak section for evidence. On top of this, Aldi specifically operates a discovery element by introducing revolving special buys: one week it’s very good value cycling gear, the next it’s gardening, and so on. Every visit to Aldi over a period offers the chance to discover something unexpected that is incredibly good value. Ever since I bought a £5 snow shovel in 2013, we’ve seen not a single flake of snow in Oxford. Thanks for that, Aldi.
Lowes (USA)
Lowes has always been good at promotional deals but what puts Lowes into the premier division of promotion-led discovery is its approach to pricing core project items. Let’s take decking. The deck planks themselves are priced almost to give away, a few dollars only for each 3m length. A wandering customer will do their initial value calculation, the one done in your head when you’ve actually come in for something else, based on the cost of the decking planks alone. That makes the cost of the project appear to be very low. It is only then, when adding the cost of frame timbers, posts, screws, joints and finishes, that the true project cost emerges. By this point, it’s a bit academic because you’ve already pictured yourself out on the deck enjoying a summer barbecue.
2. Service-led discovery
The humans in your business are amazing – all of them. They offer you the very best opportunity to tell the best stories about your business and your products. They are also one of the best ways to deliver on discovery through honest advice, thoughtful recommendation and after-sales service. Keys to achieving this are written up in the team section of this book (see Chapter 8). Go do it and your customers will love you for it. Love you with their wallets.
The key elements are:
- Make clear to everyone in the business how directly their effort affects customers.
- Make it clear that you trust your team with your customers and that your number one priority is the satisfaction of both.
- Create and evangelise your Big Idea and make it easy to understand and act upon.
- Treat your people with respect.
- Offer them great training and lots of it.
- Allow and enable your people to experience the products you sell, give them free stuff and generous staff discounts, and operate loan programmes for big-ticket items.
- Get all your people exposed to the supply chain, show them how things are sourced and made, as doing so will help them to enthuse about your products and, more importantly, identify what makes your stuff great.
- Structure your reward programme such that it is biased towards customer satisfaction and away from sales volumes.
- Put in place a recognition programme and use it to say thank you each and every time you see your people go the extra mile for customers.
- Value knowledge highly but also encourage your team to be open-minded and make sure they understand that every customer has their own set of needs.
- Stress the value of listening to what customers tell us they need and show how this is more important than telling customers what we assume they should have.
The Container Store (USA)
Brilliant at discovery, The Container Store provides phenomenal levels of training, wonderful employment experiences and works incredibly hard to build stable customer-focused teams. The result is a business that punches well above its weight and that enjoys a near fanatical level of customer advocacy. One of my favourite retailers anywhere in the world, it provides an average of 210 hours per year of staff training, great staff discounts and has featured in Fortune’s 100 Best Places to Work in the USA list for more than a straight decade.
Enjoy.com (USA)
This is what Ron Johnson (creator of the Apple Store) did next. Well, not next, so ignore the horrible bit at JC Penney and fast forward here. Enjoy.com is the first new thing to happen to electrical retail in decades. Start with a price-promise backed web store, supported by a sprinkling of physical area “houses”, but throw in home delivery and set-up by its experts, who will take the product to customers at home and then sit patiently with them to find out what that customer wants to get from the product and then show them how to do it. The discovery here comes post-sale (or partially pre-sale from press and word of mouth) that buying a phone, a router or a camera can turn out to be such a reassuring and deeply satisfying experience. This isn’t deliverymen in overalls with sack barrows stomping muddy boots through your home. Enjoy’s people are exactly the sort of boys and girls you’d meet in an Apple store or at a benign cult: service-trained, friendly, knowledgeable and empowered to make customers happy.
John Lewis Partnership (UK)
A byword for honesty, quality and great customer care, customers are drawn to John Lewis because they trust it and are confident that the experience will be one that is complemented by staff worth talking to. Elsewhere in retailing, extremely poor employment practices have meant the reputation of the in-store retail assistant has been damaged, but John Lewis has been able to prove to customers that it doesn’t have to be this way. It has been especially good at doing this in high-ticket electricals and computing, areas perhaps not traditionally associated with the store but that, nonetheless, customers let John Lewis guide them through both online and in-store.
3. Product-led discovery
This is where the product is the star. Innovation, fashion, trends, great iconic design are the critical factors in stores where the product leads discovery. So we’re talking about the kinds of stores that are great at buying and merchandising and at refreshing the ranges. But it’s more than that – it’s critical that the top team in this sort of store has an innate understanding of the principles and power of design and that they have a sense for the zeitgeist among their target customer groups. A lot of expensive single-store businesses start up in this category and an awful lot of them fail. They fail because the owners mistake knowing what I like with knowing what customers need. When done right, though, the approach can be incredibly successful. The very best fashion and furnishings stores are great examples of product-led discovery businesses.
The key elements are:
- Curate ranges, do not offer choice for choice’s sake.
- It’s all about your buying team, spotting exceptional products at the right price points.
- Hang on, maybe it’s all about your visual merchandising team – showing off those products in inspirational settings?
- Study all the sources of information on trends that you can lay your hands on.
- Watch very closely what goes on in competitors’ stores for clues on trends.
- Talk to customers, formally if you want, but on absolutely every single store visit you must talk to customers and get feedback all the time.
- Ask customers what’s hot, encourage them to make recommendations on new finds and new directions.
- Ensure key products are given room to breathe and are displayed to their absolute best.
- Be prepared to drop poor performing lines early (or at least to change emphasis, if you can).
- Refresh ranges often but show respect for important classic lines too.
- Do not presume to dictate taste but do try hard to influence it.
Objects of Use (UK)
This tiny one-store miracle is typical of a new wave of specialists with young artisanal sensibilities grafted to commercial instinct that makes product discovery the foundation of its Big Idea (see also Caroline Weaver’s brilliant CW Pencil Enterprise, Chicago’s quirky art and music store Transistor, described by Time Out as “your coolest friend’s apartment”, and the icy cool, but brilliant, Labour and Wait in London’s East End).
Objects of Use’s Big Idea is to be “a source of enduring household tools and functional items”. Those two words “enduring” and “functional” are important: they carefully curate a range that is full of thoughtfully made long-lasting items that are entirely focused on the function for which they exist. The store is thus filled with lovingly displayed and described items that transcend ordinary by virtue of their timeless craft and quality. They are items that, by their inherent nature, are both lovely things to own and great for gifts, and around which that process of discovery is fuelled.
The store is always packed and the tills always busy. All of the businesses I mention above are also supported by robust and attractive online stores in which product is fetishised and celebrated and sold by people who clearly love what they stock, and for whom an online component is not a separate thing but a natural part of the business. It’s what they’ve grown up with and is second nature to them. It is also entirely no surprise that Objects of Use stocks the magical Palomino Blackwing pencils.
ASOS (UK)
Back in 2000, when ASOS launched under its long-form name “As Seen On Screen”, the Big Idea was to sell clothes seen on celebs and actors on telly and in the movies. The business quickly outgrew that space as they discovered that it was good at tracking screen-seen fashion but even better at understanding and stocking bang-up-to-date fashions in general. That awesome instinct for fashion, and a focused concentration on the 16 to 34 age range, has driven product-led discovery and created a store that customers love to regularly check out.
Zara (Spain)
Zara is built on an incredibly efficient supply chain that enables it to bring new items into stores twice a week, every week. That’s an astonishing commitment to product-led discovery and it leads the fashion retail industry on logistics and is able to take an idea from initial design to retail rail faster than anybody else. It’s obvious to see why customers might react positively to such fast change and ever-shifting variety.
Warby Parker (USA)
Though Warby Parker’s Big Idea leads on making glasses cheaper, the team never compromise on quality or design. It almost fetishises style and form; its visual merchandising in the physical store chain is of an extremely high quality and produces the sort of interiors you’d expect to find on Bond Street or Fifth Avenue. For those of us who remember our first super-nerd NHS glasses (for US readers, imagine glasses given out on welfare), the idea of own-brand specs conjures horrible memories of teasing at school and worse, but Warby Parker’s cheap specs are beautiful and bang on trend. It’s a terrific twisting of the expected norm and generates exceptional volume at respectable margins.
Here is Warby Parker’s description of its Milton frames: “Each pair is crafted from lightweight Japanese titanium and wrapped in premium cellulose acetate coils (handmade in Italy!)”
Crafted. Wrapped. Handmade. Sounds like a description from a menu item at a top restaurant. Ingredients are raised by being Japanese titanium and premium cellulose acetate. Titanium is titanium, wherever in the world it’s mined and worked. Cellulose acetate is essentially plastic, albeit a natural one.
And this for a pair of glasses retailing for less than half the price of an equivalent designer-branded pair. This is product-led discovery in powerful form.
Total-format discovery
There are a number of retailers that have based their entire Big Idea and format around discovery and paths to discovery. These are the stores you find full of handwritten notices recommending products. They are the ones in which you see little notes to you, the customer, all over the place that connect you with the products. Everything in the store is about making sure that you are made aware of how brilliant a product will be for you, how you will feel, what a difference it will make to your health, wellbeing or lifestyle. That sounds a bit “ad-man” written down. It’s worth saying that, in order to properly convince, the format must be honest, credible and authentic, too. It’s important, too, that format-led discovery works only if there is service-led discovery in place too.
The tools include:
- Create an authentic voice for the brand.
- Use your values to ensure that the voice properly represents your Big Idea and mission.
- Create a compelling conversation throughout the customer journey, make use of space on product, bags, shelf edge, in changing rooms, on product cartons, walls, editorial, at the till, and so on.
- Provide honest advice everywhere.
- Celebrate the great products, be enthusiastic and explain to customers why you think an item is so great.
- Constantly refresh displays.
- Get customers involved with recommendations.
- Make good use of customer advocacy, so make it easy for customers to tell others about your store and range.
- Remember that it’s the conversation that’s important.
- Make good use of seasonal and “occasion” events.
Story (USA)
The ultimate expression of total-format discovery is the Story store in the heart of Manhattan’s cool Chelsea neighbourhood. It is a retail space that changes every three to eight weeks as a new story is told. One period this might be a story themed around wellbeing (http://goo.gl/VrZZaH) and next it could be a Lexus-sponsored store of discovery wrapped around creativity. The result is a 200 square metre space that customers are drawn to because they might discover something new, that features constant time-limited calls to action, as in the wellbeing “last weekend” campaign, plus unique new product collaborations fitting the current theme. Story is a place where brands can experiment and play with concepts and products. An article at CNBC puts the cost of those brand sponsorships at a minimum of $400,000, with no shortage of brands wanting a slice of the Story pie.
In five years, Story has run 28 unique “stories” and held 400 events, featuring 3,000 brands. This is ever-changing discovery and curation as the format itself. It has made for an exciting and energising physical space that ramps sky high the reward side of the friction/reward equation.
Apple Store (USA)
The iconic retail bases for Apple’s products are entirely about discovery. They are built ground-up around the notion of non-Apple people discovering that Apple meets their needs better, and of dedicated Apple-users discovering they belong to a tribe that cares about them. So you have every single part of the Apple range, in quantity, out on the shop floor, set up so customers can touch them, play with them, have fun with them and discover new things with them. Then the Apple team, extremely well-trained customer advisors, make themselves easily available to give advice, recommendations and solutions. In the early days, I wondered if the Apple Stores would turn out to be a heavily subsidised brand promotion rather than profitable stores, but the opposite is true, as the stores are very profitable as well as being stunningly successful discovery zones for loyal and new Apple customers alike.
Pret a Manger (UK)
These sandwich shops do authentic conversation better than any other retailer in the world. Should you find yourself reading this book while sitting at one of Pret’s stainless steel counters, you would find that the coffee cup you’re drinking from has a note on it that explains how Pret’s coffee has come to taste as good as it does. That cup would explain too how Pret supports the grower of the beans your coffee was made from. You might then dab the corners of your mouth with a Pret napkin that tells you it’s made from unbleached, recycled fibres that explains why that’s a good thing.
This conversation Pret a Manger has with its customers is powerful and is about helping customers to discover a lunchtime option that meets a perceived deeper set of needs. There’s a lot of research evidence that proves that our sense of taste is effected by contextual information – telling somebody that they should expect to enjoy their sandwich more because it’s fresh increases the likelihood that they will enjoy it more. You can use that in lots of ways in retail. We’re generally really bad at communicating emotional or sensual information so directly to our customers.
Urban Outfitters (USA)
You’ll notice that I categorise most fashion stores in the product-led discovery category. Urban Outfitters makes the jump because of the innovative way it has constructed its display systems, the credible addition of non-clothes ranges and the considered inclusion of branded ranges. All displays at Urban Outfitters are mix and match – tables, shelves and rails can be easily combined, moved and re-merchandised. This makes it easy for the team to constantly refresh the store and use a form of convection to bring different items to the surface before allowing these to settle back into main stock as new items get pulled to the surface.
Stew Leonards
Being authentically great fun
This case study is essentially the same one I included for the first time in the 2007 edition of Smart Retail. All I’ve had to change is to put another hundred million dollars on the revenue total. Stew Leonard’s keeps on ramping up and up. It’s an amazing business and more retailers should go out of their way to visit. I first had that pleasure on a mammoth drive from Lake Winnipesaukee up in New Hampshire down to the bottom end of Manhattan Island via Danbury in New York State. We arrived at the Danbury store in the dark and through driving rain feeling exhausted and miserable after hours on the road. I’d long wanted to see a Stew Leonard’s but my partner and I were grumpy and hungry and this visit felt a lot like work. An hour and a half later we were back in the hire car buzzing, having been boosted by one of the most vibrant and fun store experiences we’d ever had.
Stew Leonard’s is barking. Often literally. And it’s baa’ing, moo’ing and clucking too, much of the time. Stew Leonard’s is a chain of just four stores (with a fifth planned), all in the north east of the USA that together take $400,000,000 a year. They turn more than $5,000 per square foot of sales space and achieve revenue-per-employee that is around $180,000. Staggering, stunning, mind-blowing numbers.
And what is Stew Leonard’s? A family-owned dairy store that sells a limited selection of 2,200 dairy and dairy-related products, 80% of which are fresh, serving 130,000 customers each week.
And, although I suspect current boss Stew Leonard Junior wouldn’t call it by this name, discovery is what sits at the heart of the amazing performance of this business. The entire format is built around discovery and theatre: loads to see and do and a massive single aisle that snakes customers past every last part of the big store. Promotion-led discovery is there in spades and in massive volume. Product-led discovery, too, is important with, in particular, what they claim to be the freshest milk in North America, which comes from their own herd of cows, cows you can see milked on the live webcam feeds shown in the milk area. Service-led promotion is incredibly important, too. The employment experience at Stew Leonard’s is of a very high standard (and regularly recognised as such in Fortune Magazine’s 100 Best Companies to Work For annual list).
The customer is king, but only because the staff are allowed to make it so. “You can’t have a great place to shop without first making it a great place to work.” That’s a slogan you’ll see written up in the store but it’s more than words as the management team deliver on that too.
Stew Leonard’s gives every employee a real say in how to best service customer needs. If an employee thinks that doing x is good for an individual customer, they will get on and do that thing. If they think y is good for their customers in general, and they really do mean “their”, then they will suggest the business gets on and does that too. There is a great story Stew Junior tells that illustrates this in action. He calls it the tuna fish story: “I unwrap one of our tuna fish sandwiches, and this package of mayonnaise rolls out. I figure the sandwich has enough mayo already. So I call Bill Hollis, my deli manager, and tell him ‘… get rid of the extra mayo, it’s expensive’. So next week, I open a sandwich, the mayo rolls out again. I call Bill, and he says ‘… you gotta talk to Mary Ekstrand, she makes the sandwiches’. I call Mary, who says ‘Sorry, Stew, the customers want the extra mayo, so I’m packing it again.’ You know my reaction? Bravo, Mary!”
Stew Junior has a cheesy, but perfect, acronym that illustrates his management style nicely: STEW. Satisfy the customer, work together as a Team, strive for Excellence at everything you do, and get the customer to say Wow.
That “wow” thing is a foundation principle of all forms of discovery. It means customers have found stuff that meets their need states. The team has created what the New York Times calls “The Disneyland of dairy stores”, and it is banjo-playing robot dogs singing Dixie, and animatronic milk cartons (The Farm Fresh Five) dancing near a model cow that tells jokes when kids pull its bell. Staff dress as cows, ducks, chickens and bananas while patrolling the aisles, giving out free ice cream and helium balloons. They put on these daft costumes, not because they are told to, but because they decide for themselves what to promote and how to celebrate it. They use their own budgets to go out and buy these costumes. Free food samples are everywhere and staff offer them accompanied by warm, genuine smiles. There are petting zoos, outdoor BBQs, beach grills, cafes and singing broccoli and carrots. Shoppers don’t just come here to buy a quart of milk, but for the experience. An experience built on discovery.
This store might feel like it’s lots of things all just thrown together, but that’s not really true. This is a place built by its people. Those 130,000 customers come along each week because they like the products, but they come for the atmosphere and, mostly, I suspect, they come because the human experience at Stew Leonard’s makes them feel good. That is down to the dedication, imagination and vision not of just one man but of a whole motivated, passionate team. A retail family.
Now
Things you can do now
- Find five ways in which your current formats inspire customers to interact with product. Consider what it is about these five things that connects them. Are they random? Is there a pattern that might suggest this inspiration to engage happens because of you?
- Work out what sort of discovery business you are now – product, promotion, service or format?
- Take an honest look at the answer above and decide if it is compatible with your Big Idea.
- Look at how you measure up with the “key elements” list for the type of discovery retailer you are.
- Identify three of these key elements to work on strengthening.
Next
Strategic considerations for the longer term
- Is your current discovery positioning compatible with the current strategic vision of the business?
- What structural change might be required to better deliver discovery to customers?