KIRANIZATION OF INDIAN MALLS : THE SNOW WHITE

AND THE SEVEN DWARFS EFFECT

Rajan Johree, Ruhbani Singh and Karan Makhania

ABSTRACT
In the current changing scenario, it is crucial to be
flexible in all possible contexts. Such a scenario
currently exists in the Indian retail sector. It is
currently estimated to be a USD 200 billion industry
and recently saw the entry of very large retailers in the
form of malls. Currently, while the malls are attracting
a lot of interest in the form of footfalls of visitors, they
are not able to convert a sufficient number of these into
purchases. This is where the malls need to be flexible
and learn from the kirana stores – a traditional format
of small, corner retailers popular in India.

India and its markets are undergoing a sweeping change. This change is not
only in the market structures but also in the way goods are being sold. Gone are the
times when a customer would have to make good with whatever merchandise was
available, the price and the delivery mode prevalent in those times and finally the
value for money that he is given. Today markets and their processes are more flexible
in all aspects. The new Snow-white market places have started to replace the
traditional bazaar – kind of dwarfed tiny corner kirana shop. Be it the supply chain or
the point of purchase experience, markets and marketers are deriving sustainable
competitive edge based on flexibility.

Let us look at the current market position of the Indian malls. The number of
shopping malls, which were virtually non-existent in India till five years ago, now
stands at about 300. Many more are in the pipeline and will soon be a part of the
organized retail segment in our country (India). India is at present a fast growing
economy and is attracting considerable amount of interest in its retail sector which is
till now still in its nascent stages. Shopping malls are a relatively new phenomenon in
India and seem to be linked to the growing middle class and increasing interest in the
west.
 In the Western World there have been malls for so long that they have become
part of the public's psyche, but in India it's a new concept, so various factors that
govern the success of a mall have to be kept in mind. It is in this context that this
paper is being presented on the acceptability and adaptability of the shopping mall
concept in Indian cities and to the Indian population.
HYPOTHESIS

The problem being studied in this article is that of the Indian malls and how to
adapt them to the Indian context. The study looks at the possibility of the malls
replacing the Kirana stores (a popular form of market stores in India) by adopting a
flexible strategy which enables it to successfully adopt the key features of these local
stores and at the same time provide the benefits of the shopping malls. The study
undertakes an analysis of the attitudes of Indian consumers towards these malls and
how the malls need to modify themselves to better service the Indian consumer.

Linking the concept of flexibility management systems to the Indian retail

segment, this article talks about Indian malls and their need to be flexible and
adaptive in order to be successful in the Indian market. Retailing is the business
activity of selling goods or services to the final consumer. A retailer is any business
establishment that directs its marketing efforts towards the final consumer for the
purpose of selling goods or services.

The Indian Retail Industry is ranked among the ten largest retail markets in the
world. It is currently estimated to be a US$ 200 billion industry and organized
Retailing comprises of 3 per cent (or) US$6.4 Billion of the retail industry. With a
growth over 20 percent per annum over the last 5 years, organized retailing is
projected to reach US$ 23 Billion by 2010. There are multiple factors driving Indian
retail growth. With roughly 60 percent of the total population below 30 years of age,
favorable demographics are expected to drive consumption across categories. The
purchasing power of a young consuming middle class has been talked of considerably
since the time of economic liberalization in 1991.

Table 1
Table 2

Table 3
 As can be seen from the above tables ( taken from the FICCI – KPMG Retail
Survey, 2005 ) despite Food and Grocery being the fastest growing retail segment in
India today, only 8% of it is in the organized retail segment, which offers a huge
opportunity for malls to exploit. Presently, this segment is being catered to by the
unorganized players, notably the kirana stores.

These centrally air-conditioned malls with piped music, high-speed escalators,

underground parking space, a multiplex movie theater, multi-cuisine restaurants and a
host of national and international brands, these malls generate approximately 25,000
footfalls each, per day, with figures doubling on weekends. It is estimated that there
are 450 malls in various stages of development across India, 60 in the greater Delhi
area alone. The frequency of visits to these malls can be measured by the number of
footfalls and their conversion rates. The number of footfalls that are actually
converted to purchases is what is measured by the conversion rates. However at
present, most malls in India are regarded as entertainment zones by the people and not
as places for making their daily basic purchases. They primarily attract consumers for
purchases of furniture, home furnishings apparel and other lifestyle products.
Subsequently it has been observed that the footfalls in the Indian malls might be high
but the actual conversion rates are low.
THEORETICAL FRAMEWORK

In our study of flexible management systems, we have referred to the book

“Cornerstones of Enterprise Flexibility” by Dr Sushil. This book provided the basis of
our study and provided the broad framework within which we have studied the case of
the Indian shopping malls. We begin with an introduction to the Flexibility
Management Systems.

Background
 In this changing world the only thing that is constant is change and the best
tool we have with us to deal with this change is Flexibility. The winds of
liberalization and globalization are creating a fast changing business scenario. As the
barriers across the world gradually diminish with a change in the economic and
technological scenario, there emerges a need for higher and higher levels of enterprise
flexibility to resonate with these environmental changes. Flexibility is the most
valuable strategic option in this turbulent environment and proposes a construct of
internal and external flexibilities at the operational, structural and strategic levels. The
pillars of this flexibility concept are:

• Agility
• Resilience
• Freedom of choice
• Adaptive ness
• Openness
• Responsiveness
• Customization

An important concept is called Enterprise Flexibility, which means creating

options at various levels in the enterprise, developing ways and means of change
across the range of options and providing freedom of choice to various actors in the
enterprise for making this change happen with minimum time and effort.

The various types of flexibility within an enterprise include:

• Strategic flexibility
• Organizational flexibility
• Flexibility of various types of systems including financial, information,
marketing etc.

In the present decade of fast changing environment and uncertain levels of

organizational operation, a strategy which can absorb the shocks of change and help
the organization to adapt it at all levels i.e. from strategy to operations will be
successful. The change in the environment has to be learnt by the organization. It has
to unlearn the earlier practices which have become redundant /impediments in moving
ahead. Such identified changes are absorbed in the corporate strategy and mix of
different functional strategies set accordingly.

An enterprise with more options and having systems and processes that can
‘change’ from one option to another, can easily adapt to the environmental changes.
Enterprises that develop an open system will be able to learn about the expected
changes in the environment and be proactive in adjusting itself accordingly.
Flexibility in an organization should be brought about in the dimensions of strategy,
structure, systems and people. In order to generate enterprise flexibility the strategy
should be regenerated, organization needs to be restructured, the systems are to be
redesigned and the people to be reawakened so as to recreate the culture and adapt to
changes.
METHODOLOGY

An exhaustive and detailed questionnaire has been designed to explore all the
aspects enumerated above. To arrive at the final questionnaire, we first formulated a
rough draft with a few questions, which generated a lot of qualitative data, which
played a crucial role in helping us zero in on the final questions. An attempt was
made to make the study as broad based as possible by taking a sample of 20 malls in
the Delhi NCR region. A minimum of 5-8 shopkeepers and tenants in each of these
malls were contacted and surveyed. Detailed and specific information was extracted
from them and documented. Personal visits were made to conduct a detailed interview
of the respondents (these included both the customers and shopkeepers at these
malls). A method of passive observation of shoppers at these malls was also adopted
to study the shopping styles and behavior of the Indian customer.

Another important tool used for data collection was that of Appreciative
Inquiry (AI). Appreciative Inquiry is a positive approach to change that focuses on
probing a firm's best attributes and practices. AI is typically thought of as a "soft"
strategy used in creating organizational visions, aligning groups, and building
cultures. We visited various malls and observed the way the various consumers were
going about making their purchases. This helped us get a glimpse of how the mind of
the consumer makes choices in real life scenarios.

Case studies have also been undertaken and focused group discussions have
also been used to collect data and information.

ANALYSIS

Our Study of Consumer Behavior in India

At this stage a study of consumer behavior yields great insights into the
strategy which must be adopted by the organized retail sector in India. Consumer
behavior is seen to involve a mental decision process as well as physical activity. The
actual act of purchase is just one stage in a series of mental and physical activities that
occur during a period of time . Some of these activities precede the actual buying ,
while others follow it. However since all are capable of influencing the adoption of
products and services , they will be considered as part of the behavior of consumers.

Table 4
 ‘Know your enemy’, as the saying goes, is considered to be among the most
crucial factors for success in retail. Comparing oneself with the competition is a
perpetual function of all marketers. The two most commonly used factors for
comparison are price and quality, and the perception of the people in both these
factors is paramount.
In our survey, the respondents perceived the malls to be more expensive
as compared to the local kirana stores. This is a clear indication of the need to
adopt an effective strategy by the malls to communicate their competitive
advantage to the right audience.

Table 5
 Another aspect that emerged was the strong preference of the buyer for tried
and tested brands and also his penchant for variety at the point of purchase.
Traditionally, kirana stores are known to keep an inventory of brands that their regular
customers usually buy (e.g. Parachute Hair Oil) while malls stock up on a wide range
of brands in the same category. While the customers do appreciate a large variety to
choose from, the more popular brands should be displayed prominently to

Table 6
Table 7
The process of choosing a specific store involves the matching of consumer
characteristics and purchase characteristics with store characteristics. An individual
may use different criteria to evaluate which store best meets his or her needs
depending on the type of purchase. Consumers compare retail and store options based
on how they perceive each will perform on the various criteria.

Evaluative Criteria:
• Location ( Distance )
• Assortment Breadth and Depth
• Price
• Advertising and Promotion
• Point Of Purchase (POP) Display
• Store Personnel
• Services
• Customer Characteristics
• Store Atmosphere

As observed in Tables 6 and 7, the convenience seeking consumer greatly

appreciates the provision of multiple services under one roof. Although this facility is
available in the malls, most people surveyed were found to be purchasing their daily
groceries and other requirements from the local grocer or kirana store. This
contradiction in consumer behavior maybe attributed to the drawbacks that people
perceive in the malls as well as to certain convenience factors in the kirana stores that
they treasure, which prevents them from making this switch.

ANOVA BRAND
Sum of Squares df Mean F Sig.

Square
Between Groups 2.137 3 .712 3.034 .034
Within Groups 20.186 86 .235
Total 22.322 89

The above table reveals the relationship between people who usually buy
products on the basis of the brand and also the people who value convenience greatly .
In this table the brand is the dependent variable which is shown to be dependent on
the convenience factors that people value in the kirana stores(home delivery , personal
association with shop keeper etc).This tells us about the need to stock the brands that
the target customer values and usually buys and to also display it in the best possible
way . This is another segment that the malls need to aggressively target as their
current shopping behavior is being serviced by the local kirana stores extremely well.

Table 8

The people surveyed seem to fall in one of the 2 categories – those who shop
for products as and when the need arises and also those who visit a store once/twice a
month and stock up. The malls need to decide on a strategy to target the buyers who
shop as and when the need arises as such people greatly value convenience and
usually buy such products from the nearby local vendors.

Table 9
 The reason for this is largely typical to India – lack of appropriate physical
infrastructure like fast moving roads and vacant urban lots for parking requirements.
Also, many people tend to indulge in window shopping at the malls ,while not making
any significant purchases.

Table 10
 It has often been noticed that what others say often influences consumer
behavior to a very large extent. The term conspicuous consumption describes
purchase decisions motivated in part by the desire to show others just how successful
we are. As can be seen, this kind of outlook is widely prevalent amongst the people
surveyed.

Hence, two factors which we felt would be highly correlated did not turn out
to show any significant relationship – these factors included the prestige factor
associated with shopping in the malls and also the peoples perception of the prices in
the malls.

ANOVA

Where would the people rather be seen

Sum of df Mean F Sig.

Squares Square
Between Groups 3.716 3 1.239 .840 .476
Within Groups 122.353 83 1.474
Total 126.069 86

Table 11
 This chart emphasizes the traditional value seeking behavior of the Indian
consumer. Any retail format aiming to target the masses must be seen as providing the
best value for the consumer’s money.

Through our focused group discussions and interviews with people in the
malls we were able to identify certain strengths and weaknesses of the malls in India,
as perceived by the people who shop in them.

BENEFITS OF THE MALLS

• The whole retail and merchandizing industry depends on the efficient use of
supply chain, pricing and range of products. Single elements alone cannot
offer the customer a delightful shopping experience. Small Kirana stores
cannot offer this experience as many processes are involved, there are high
costs of manpower and infrastructure.

• Large retail formats , owing to their bulk purchases can achieve better
economies of scale as compared to a small shop.
• The shopping malls offer the customers a wider variety of goods , and also
provides them with a better display of products. The store design and better
display are point of differentiation for the shopping malls. They provide the
consumer with a memorable shopping experience. The package offered to the
consumer involves environment, service, price and the product.
• The shopping mall offers the consumer a one stop shop for all his needs. The
concept is to be able to satisfy multiple needs of the customer and to provide
for all his requirements at one location,under one roof.
 • The malls attract people on the basis of their superior – store atmosphere ,
store activities , shopping experience and better services.

THREATS SPECIFIC TO INDIA

• Crowds of people window shopping and long queues are one of the major
problems which keeps people away from the malls.
• The stores are often out of stock of the goods that the customer is looking for
(as they may be in greta demand at that particular point of time) and no
information is available on when the stock will come again and also on how
soon will it be arriving.
• Coming to the malls to shop for one or two products as and when the need
arises is not feasible. The malls seem restricted to that segment of the people
who shop once/twice a month to stock up , either to save time or to avail of
better prices.
• The bad physical infrastructure – lack of fast moving roads resulting in traffic
jams on the way is something that keeps people restricted to their local shops
and kirana stores.

Much attention needs to be paid to the customization of the malls to the Indian
context and to the needs of the local clientele. Just as when a product is being
launched in a new market it needs to be customized to the culture of that particular
place and the needs of the people there, similarly the concept of malls when applied to
India must be tailor made to adjust to the complexities and diversities of the Indian
context. Emphasis must be laid on the following:

1. Retail Image- represents an overall composite of how consumers see and what
consumers feel about a given retailer
2. Marketing concept – sending the right message to the right audience through
the right media

- adjust the product, price, place, promotion to satisfy the needs and wants of the
consumer

One possible course of action could be to not market the malls as upscale
shopping areas with big brands only but should try and make themselves a part of the
people’s daily lives and portray themselves as places where one can buy a wide
variety of things under the same roof. Branding would include the logo, the
advertising and also the overall store ambience. In branding the malls, they should be
shown to imbibe and reflect the values of the local / target population. By creating a
distinct identity, one that the consumer relates to, the retailer differentiates themselves
from the competition and creates a unique position or offer.

In India , one must understand not only the culture but also the ethnic and
religious diversity of the place. Both these aspects have a great influence on the
consumer behavior. Consumer buying behavior is the manner in which consumers act
and react to various situations involving the purchase of a good or service or the
acceptance of an idea. Effective retailing requires an appreciation of the buying
behavior of consumers. Retailers need to better understand their customers so that
they can both respond to as well as anticipate their needs.

Consumer behavior isn’t constant, but varies not only from country to country
and culture to culture but also from region to region. There is such great diversity in
customer behavior where even Hyderabad and Bangalore are as different as chalk and
cheese. On one side Hyderabad is conservative, male dominated, where customers
like loud colors and shop in groups and on the other side Bangalore is modern, where
customers want subtle shades and shop on their own. In India the culture is more
towards being thrift conscious and wanting value for money . The customer needs to
be convinced that the malls are giving him good value for his money. In fact, Kishore
Biyani, managing director, Pantaloon Retail has turned the study of community
behavior into a fine science through a specialized regional diversity tracking system.
He goes personally to people's homes, talks to local community leaders and spends
weeks walking streets of bazaars to get a feel of what products should be stacked in a
new store. Thus a proper understanding of the consumer behavior is a necessary
prerequisite to facilitate a smooth transition of the Indian consumers to the malls.

The Indian Consumer has for long relied upon the local kirana store for
purchasing their groceries and other daily requirements and are used to having their
purchases delivered home. The local kirana store is usually run by someone with
whom the consumer is familiar and friendly with; this adds the personal touch to their
daily shopping experience. The greatest advantage of the kirana stores is their
location, being located within or near the residential area makes it convenient for the
residents to shop from them. Another reason is that consumers feel that they can
bargain easily with the local shopkeepers which they believe is not possible in the
large retail malls. The malls must focus on adapting to the needs of the Indian
consumer rather than change their habits.

Design of the stores interiors are also of critical importance. The interiors
should be designed so that their interiors closely match the aspirations of their core
customers. The interiors of the malls must adapt to the culture and environment in
which they are functioning and be dynamic in this regard. An example of such
flexible and dynamic interiors can be seen in the Gateway Mall in Durban which has
successfully encouraged retailers to show their product in creative ways, and dissolve
the boundary between mall and shop. The same is true of the covered street format of
Bugis Junction in Singapore, where shops display their wares in a market-type setting.
Retailers must respond to consumer expectations with what's been called "mass
customization."

The essential premise of localised retailing is about creating "my kind of

store" – an environment where customers can feel completely at home, relate with
ease to the shopping experience, and see themselves reflected in the marketing.
Appealing directly and individually to customers, though, requires a strong awareness
of the local customer base and a firm grasp of what will catch customers' attention.
The location of new malls should be strategic and locate them in local catchment
areas thereby reducing the distance and commuting time of the customer.

The retail model should be customer-centric. This involves not only adapting
the ambience of the malls to make the shopper feel comfortable but also to customize
the products being sold to the consumers. They should thus create modified versions
of their brand by targeting smaller and more specific market segments. Such stores
should first determine the demographics of the local market, identify their needs
/preferences and typical behavior and then respond to them. The retailer must focus
on the following aspects of his market:

• Consumer population
• Consumer requirements
• Consumer potential – Ability to buy and disposable income
• Willingness to buy - Budget
• Authority to buy

Not only this, the retailers must also be sensitive to the constantly changing
external environment and should respond accordingly.

The malls must market themselves as offering the customer better quality
products and also a greater variety of products to choose from. Further the organized
retailers have the advantage of large scale operations. This can be used to eliminate
intermediaries and offer better prices to the customers by passing on the middlemen’s
margins to them. The retailers are able to get better bargains with suppliers and
manufacturers by offering business scales higher than the local kirana. Thus
customization and localization of the malls is the norm of today. It is said that those
retail chains are most successful that come and change for a particular city and react
to it.

It is in this setup that the Indian shopping malls could be likened to the
beautiful Snow White from our childhood fairytale, who learns to live and adapt
herself to the life and surroundings of the seven dwarfs. The seven dwarfs in this
context would be the kirana stores (local mom n pop stores), to whose surroundings
the fancy malls of the west must come and adapt to.

FUTURE RECOMMENDATIONS

As was earlier stated in the hypothesis,

The failure of numerous retail formats was due to the wrong blend between
international retailing concepts and those adopted in India. It is to avoid such
situations that it is often said that a careful selection of the correct genes of both the
parents is the single most important factor in setting up an overseas retail operation.
Adoption of the features and practices of either partner without a proper study of the
specific situation existing on the ground, usually leads to such failures. In this
context , the new retail formats in India not only need to adopt some features of the
local kirana store but also provide greater value for money to the customer through
differentiation and lower costs. This offering of the malls needs to be effectively
communicated to the Indian masses , who perceive the malls to be a place for prestige
shopping and to be more costly as compared to products in the local kirana stores. In
this regard the retailers need to choose an appropriate marketing mix and hence
establish the correct retail image of the malls in the mind of the consumers. Till this
happens it is not possible for them to compete with the local kirana stores. As has
been said about Nanz, the first organized retail venture (supermarket) in India – It
failed as it was ‘ahead of its time’, the Indian consumer was not yet ready to change –
and that they did not plan their entry into the market.

After careful study, we have been able to gauge that the major factor that has
helped the kirana stores retain a competitive advantage against malls has been that of
convenience: the location of kirana stores, services like home delivery, long
association with the owner of the family run Kirana shop, ability to bargain on prices
etc. Against this backdrop, instead of trying to pick up one or two features of the
kirana stores and competing against them on their areas of strength, the malls would
do well to adopt a model of co optetion. Co-opetition is a business strategy based on
a combination of cooperation and competition, derived from an understanding that
business competitors can benefit when they work together. The co-opetition business
model is based on games theory, a scientific approach (developed during the second
World War) to understanding various strategies and outcomes through specifically
designed games.

In our context, this means the malls and the kirana stores working together
towards maximizing customer satisfaction. Since the malls cannot offer the
convenience of a kirana store and a kirana store cannot match a mall for the shopping
experience , the possible solution could possibly be to retain the consumer friendly
features of both formats and to develop a hybrid format. Miniature malls , covering 3
to 4 localities and their households would be ideal. These smaller versions of the
mall , would have efficient supply chain management , discounts on bulk purchases,
lower prices and better display of products, they would provide the consumer with a
shopping experience to look forward to. These malls would have to base their
marketing and inventory decisions based on an analysis of the tastes and preferences
of their target customers. Based on such surveys , they would choose the right mix of
goods and services to provide their customers with. These miniature malls would then
have the convenience factor offered by the kirana stores and by providing additional
services like home delivery , credit facilities , computerized bills, in store activities for
children and adults. Concentrating on local people and their needs would help create a
loyal customer base (repeat customers which the malls at present donot have). Such
flexibility on the part of the organized retailers is essential for them to be able to tap
the ‘buy as and when the need arises’ segment , adopt the convenience features of the
local kirana stores and thus provide the Indian consumer with a new and more
wholesome shopping experience.

The table below shows the current retail formats in India, which tells us how
all the existing retail formats are being used in India , but not being very effective in
attracting , convincing and retaining the Indian consumer.

Table 12
 With the increased interest in the Indian retail segment, the malls will soon be
able to successfully capture the massive Indian market. This successful adaptation of
the western shopping mall concept to the Indian context will not be the end of all
problems. As has been observed – the changes of yesterday become the norm of
today. The next question facing these malls will be, to make the shopping malls a
“time saving” shopping offer for the Indian families. Fast growth, greater income to
the middle class, working couples; nuclear families etc are factors that will make the
future nuclear families look for ways to save their time and work within their budget
while shopping. Thus to adapt to the needs of this new generation of young working
couples, the malls would have to look at acquiring some special features. These would
involve opening crèches for children so that these young and time pressed couples can
shop easily and quickly. Also stores must be customized to display their products in a
manner that facilitates easy and quick decisions. Such kind of ideas targeted at
flexibility must be kept in mind for the future Indian malls.

Authors profile
• Rajan Johri (Johreé), 47, holds a PGDM in Management (AU,Washington),
Post Graduate in Organization Behavior MSU), Post Graduate in Labour Law
& Practice (MSU) and Fellow of National Institute of Training and
Development (UK.). His doctoral work in Management at the Indian Institute
of Technology (IIT), New Delhi is referred to as the Flexible Competency
Maturity Model (fCMM).
 • Ruhbani Singh is a PGPHRM Intern at International Management Institute,
New Delhi and collaborates with Rajan Johreé in consulting and research
based assignments.
• Karan Makhania is a PGPHRM Intern at International Management Institute,
New Delhi and collaborates with Rajan Johreé in consulting and research
based assignments.

Retail sector undergoing

extreme makeover

Firms redesigning stores to improve customers’ shopping experience

By Monte Stewart - Business Edge

Published: 09/19/2008 - Vol. 8, No. 19

Major Canadian retailers are redesigning their stores in a bid to become more service-oriented and tech-savvy.
The remakes, which can cost millions of dollars, range from consumer electronics outlets to drugstores to car dealerships and office-
supply outlets.
Firms such as Future Shop, Rogers and Shopper's Drug Mart are opening stores with whole new looks and retrofitting older stores with
some components contained in flagship locations.
Anson Lee, director of customer experience strategy for Karo Group, a design company that advises retailers and other firms on their
communications, advertising and in-store environments, says innovative interiors are just one component of redesigned business
operations. Firms are also giving their printed materials, advertising methods and online operations extreme makeovers.
"We're seeing companies take a different tack and improve their business," says Lee, whose firm has offices in Calgary and Vancouver.
"It's not just about saying, 'Let's improve customer service or customer satisfaction,' or 'let's improve this widget and give it more
storage or more horsepower' or whatever.
"They're looking at an overall package of experiences that customers encounter when they're trying to shop or buy or deal with using
the product."
Karo is helping firms such as Calgary-based Shaw Communications, Edmonton-based ATB Financial, which operates Alberta Treasury
Branches credit unions, and Open Road, a Vancouver-area car dealership, change their interior features in order to create a more
positive perception of the company in the customer's mind.
For example, Karo is trying to develop ATB's branch of the future.
"We're looking at improving the customer experience beyond contemporary strategies, where you might have a café built into a bank,"
he says.
Design changes help differentiate retailers from their competition, Lee says, because increasingly intelligent consumers realize that
many products already have the same functions and features and know how to navigate them.
The banking sector, he adds, is one that is really in need of a new look, both inside the premises and online.
Automated teller machines and online banking have prevented customers from developing close relationships with banks and exploring
everything that they have to offer.
Richard Talbot, a Toronto-area retail consultant who is helping Shopper's Drug Mart change its store design, says retailers are trying to
appeal to a customer's sense of sight, sound, smell and touch.
Shopper's Drug Mart, he says, has created a store within a store while introducing new cosmetic lines. The changes were influenced in
part by big-name cosmetics firms that want their brands in specialized environments.
Talbot says Shopper's challenge was to figure out a way to introduce cosmetics and convenience food into a "fairly sterile" drugstore
environment.
"On the cosmetics side, they've really created a separate 'shop in shop,' " he says. "If you come into a Shopper's Drug Mart, you really
come in through the cosmetics area, and the cosmetics area has many (sensory) features."
However, Talbot adds, many operators are still making critical mistakes. "You want to invite customers to come and touch your product,"
he says. "I still come across stores where (a sign) says, 'Don't touch the merchandise,' which is madness, unless you're selling maybe
very expensive wedding dresses."
"Often, when people find stores and don't want to go in, there's a (sensory) clash. There's a nice-looking Victorian kind of a store and it's
playing rap music. It's amazing still how many times I've come across problems like that."
Meanwhile, at its new flagship store in Toronto, Rogers has moved sales to the front and service to the back.
The new store, based on a prototype developed in Montreal last year, also contains pods that enable customers to pay for and pick up
their purchases right at the sales counter, rather than having to retrieve it from the back.
Staff stationed at rear service counters handle billing inquiries, as well as technical issues.
"In the small-retail footprint, there's always the crossover between sales and service," says Dale Graves, the firm's vice-president of real
estate and stores. "When we developed this design, we intentionally wanted to separate the two elements, which we think we were
successful in doing."
The switch has provided a better experience for customers and sales staff, who often had to attend to technical-service issues while
buyers wanted help with purchases, he says.
"We've already taken components of the flagship store and started to roll it out in the more typical mall stores and streetfront stores,"
says Graves. "We call this the 'Next Gen' design, so any new store we open today is under this design and incorporates the same kind of
elements. We've retrofitted a number of mall locations already to incorporate some of the same elements."
Meanwhile, Burnaby, B.C.-based Future Shop has opened a new concept store at Park Royal Mall in West Vancouver and will open
another one at West Edmonton Mall in November. The new store features a central "hub" and four quadrants called Living, Working,
Playing and On the Go - which reflect customer lifestyles.
"We hadn't looked at our floor plan in eight years," says Todd Empey, Future Shop's vice-president of retail operations. "It was just time
to do it.
"We've connected all four areas wirelessly. The idea is to show people how all the different technologies work with one another."
The new-concept stores will have connectivity experts who work on salary rather than commission and help people enable technologies
to communicate with each other.
Future Shop examined what retailers in Europe and the U.S. are doing, but its decisions were based mostly on consultations with
customers and employees.
Some older stores will be also redesigned according to the new formats.
Empey says today's customers want brighter, cleaner, more open stores in which products are easy to find.
"In this West Vancouver store, we've done a much better job of way-finding and signage," he says. "You can walk into the store and
easily see where the product categories are that you're looking for."