Aisles of life: outline of a customer-centric approach to retail space management

Abstract

The article argues that well-established principles of urban design are highly relevant for retail management and applicable in regards to a much needed customer-centric turn in space management within retailing management. In particular, supermarkets, hypermarkets and larger retail chains are governed by a space management tradition that heavily draws on principles of utilitarianism and instrumental rationality. Yet, any physical retail space accommodates a separate and distinctive, but not independent, social space which must equally be addressed if attractive retail spaces are to be grasped, created and maintained. In fact, the standardized and repetitive design of many larger retail environments such as supermarkets appears to build on uncontested traditions of space management and tenacious myths about consumer behaviour and preferences that are challenged as urban design studies are consulted. In reference to current urban design research, the article concludes by suggesting five propositions and measurements for the customer-centric quality of retail spaces that take as a starting point the appreciation of the social space that any retail space management presupposes.

Keywords::

• space management
• nudging
• urban design
• retail layout
• servicescape
• atmospherics
• customer experience
• built environment

Acknowledgements

I would like to thank the two anonymous referees for valuable suggestions and constructive comments that have strengthened the paper considerably.

Notes

^1. According to Lefebvre (1991), social space is continuously produced by ‘the three moments of production of space: spatial practice, representations of space and spaces of representations’. A discussion of spatiality therefore encompasses the physical world, the mental world and a social construction of space. These three worlds are both separate and have interconnections between all of them.

^2.http://www.fmi.org/research-resources/supermarket-facts

^3. For example, a practical guide to retail space management suggests the following:

The first step in developing a store layout is to understand the logic that forms the basis of defining and creating product categories by answering the following questions:A) What is a category?B) What is the meaning of a grouping of categories?C) What is the thinking behind presenting categories at the store?D) What does a display do? How? (http://www.scribd.com/doc/43419876/Last-Mile-5category-Layouts, p. 1)

^4. The relationship works both ways, of course. Architects and urban planners may equally learn from retail design. Not surprisingly, architects and retailers share a common vocabulary of pedestrian traffic, destinations, zones, and plazas, and with the possibility of experimenting and learning through trial and error in everyday operations, retailers may well hold a spatial expertise that urban planners must somehow envy. It is possible and not unusual to refit a store entirely, whereas in an urban context, it is rarely seen that entire cities are torn down and built up from the ground.

^5. The difference between public and private space may involve at least two differences: (1) ownership structure, and (2) number of stakeholders. Both a city and a retail setting are influenced through a complex net of decision makers and users; however the actors involved in the much larger city may necessarily outnumber those engaged in a specific retail setting. In regards to public spaces, the number is higher and thus the decision-making process more complex. In the case of private space, the control of space may be more direct and uncompromising. In addition, long-term planning versus short-term planning of the city as well as of retail may come down to investment type and ownership structure. As a popular saying goes, shareholder companies are notoriously known for working within a timeframe that goes from annual report to annual report, whereas in politics the cycle of election is typically 4 years.

^6. The restaurants of IKEA are great examples of social spaces that work well as destinations. They are not space-efficient in regards to the SKU count but they encourage people to hang out, rest and reload. Market research has established that people who visit the IKEA restaurant spent a significant longer time in-store, resulting in a higher average ticket. Likewise, IKEA has institutionalized the commercial potential of visit-ability in terms of designated ‘open-the-wallet’ areas at the very beginning of the customer journey (Stenebo 2010; IKEA 2012).

^7. To be clear, there is no logical necessary opposition between efficiency and enjoyable customer experience– convenience may be exactly where the two collide. But neither can convenience replace comfort-ability.

^8. Gehl (2010) speaks of a 6 km/hour architecture as the ideal.

^9. Alternative KPIs of space performance that brought the customer to the centre stage would be (1) exposure of products per customer similar to the widespread online measurement of pay-per-view or pay-per-impressions, combined with (2) length (time) of exposure of products per customer.

^10. For example, IKEA is infamous for forcing customers through the store. On a short-term basis customers may impulse-buy more being forced through the entire store; on a long-term basis the customers may tend to return more frequently if they do not spend half a day on a visit (possibly even feeling trapped most of the time).