Retail has changed due to the influences of both the pandemic and inflation impacting shopper behavior. Today, shoppers are increasing their pre-trip planning and taking fewer trips overall. With these fundamental shifts, many of our retail clients are focused on optimizing their in-store experience to build both loyalty and trip frequency. But what is the best way to optimize a retail reinvention and what role does research play to ensure a strong ROI?
Market research can play a crucial role in optimizing retail design as it helps retailers gather valuable insights about their target audience needs, competitive benchmarks, and industry trends. Let’s take a look at best practices when conducting a retail re-design initiative based on our first-hand experience through working with our retailer partners.
Define the Objectives
Sound obvious but sometimes it isn’t and can dramatically impact ROI when the goals and objectives of any retail design initiative are not clear. That’s why upfront it is important to identify specific objectives whether it’s enhancing the customer experience, increasing conversion, or maximizing section traffic. Identifying the most important objectives often will require input from several sources including sales data, competitive and customer data. One of the approaches we have used with our retail partners is to conduct initial research to clearly define the shopper challenge that we are solving for. This approach often requires a back-to-basics approach of being in-store and observing shopper behavior. This can be done through using store analytics such as utilizing data from foot traffic counters, heat maps, and other store analytics to understand customer flow and behavior within your retail space or through in-person observation. Simply observing shopper behavior can help pinpoint where along the conversion funnel there are challenges such as traffic flow, conversion, or shopping challenges within the section. Precisely pinpointing specific shopper challenges will inform the design objectives to create changes that will directly increase sales.
Identify the shopping needs of your target audience at a category level
While most retailers have a shopper segmentation of their customers, it is important to understand the specific triggers by category to drive sales. This entails understanding shopper preferences, needs, trips, and shopping behaviors at a category level to develop and design relevant shopper interventions. This information will guide your design decisions to cater to your most important shopper segments with relevant merchandising, offers, and communication that will make a difference. A starting point for many retailers is to utilize Explorer’s Shopper Activation Framework to identify department-level opportunities relative to their competitive set.
Analyze the competition and conduct early-stage design sessions
Study your competitors’ retail designs, store layouts, and strategies. Identify their strengths and weaknesses and look for opportunities to differentiate your retail design and offerings. Involve your shoppers early in this process, and observe their reactions to different retail design elements, displays, and layouts. This qualitative feedback can offer valuable insights into what attracts and will ultimately engage your customers.
Test prototypes and concepts
Before fully implementing a new retail design, create prototypes or virtual representations of the proposed changes. Use mock-ups or virtual reality to get a feel for how the design will function in the physical space. Once test stores or VR environments are built, get customer feedback through interviews, and further measure their engagement via eye tracking and benchmarking behavior versus your objective setting phase. Ask your shoppers about their experience, likes, dislikes, and any suggestions for improvement. This information will give you insights into what aspects of your current redesign are working and what needs to be optimized.
Develop an optimization plan
Based on the insights gained from market research, create a comprehensive optimization plan. This plan should outline the changes and improvements you will make to your retail design and how you will measure their effectiveness.
Conduct A/B testing prior to rolling out the design
If possible, perform A/B testing with different layouts or designs to understand what works best for your specific retail section and target audience. Use data and customer feedback to refine your approach. At this stage it is important to gain customer input into the designs, so you have the “why’s” to explain the test results and revise as necessary.
Implement and measure
Put your optimized retail design into action and closely monitor its impact on key performance indicators (KPIs) such as foot traffic, sales conversion rates, and customer satisfaction. Regularly review the data and adjust as needed. Keep the retail section fresh and exciting by regularly updating displays, rearranging products, and introducing new elements to encourage repeat visits.
Remember that the success of a retail section redesign depends on understanding your customers’ needs and preferences. Continuously monitor the performance of the redesigned section and be prepared to adjust based on customer feedback and sales data.
By following these market research steps, you can ensure that your retail design optimization efforts are informed by data and customer insights, leading to a more successful and customer-centric retail environment. Contact us to learn how we can help you reinvigorate the retail experience.
