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Counter Points: Inspired Store Design Can Yield Higher Margins

Posted: March 27, 2014, 1:35 p.m. EDT


By Barry Berman

As pet supply retailing becomes increasingly competitive, and with pet owners being offered more choices than ever before of where to shop, including via the Internet, many store owners are upping their game in every aspect of their business.

As I visit pet stores around the country I notice store interior designs that, while the specifics might vary, all share several important elements in common. Many adapt ideas from other retail categories, such as apparel, housewares and home décor. I call these interior designs the "homey-apparel” approach.

From a business strategy standpoint, these stores all aim to make female consumers feel they are in a warm, pleasant environment that encourages them to enter, linger and return.

Creating an environment with these characteristics can allow a store to set higher price points by offering a more pleasant shopping experience and by making affluent consumers feel at home. A homey-apparel pet store not only looks and feels different from other pet stores; its design also leaves customers with a different impression than that of many other stores they frequently visit, such as supermarkets and pharmacies. A comfortable, unhurried atmosphere also can make it easier for staff to initiate conversation with customers.

Counter Points
A combination of light-colored fixtures and upscale-looking merchandise gives an impression of abundance. Carrie Brenner/I-5 Publishing at George

More frequent and longer customer visits, more effective relationship building—we’d all invest in those retail benefits if we could, wouldn’t we?

Cash in on Cozy
How exactly do homey-apparel pet stores differ?

The bright lights necessary to effectively merchandise display are tempered by design elements that create a calmer and more inviting atmosphere. In spaces with high ceilings and warm colors, such as dark orange or deep gold on upper walls, beckon from a distance. These upper spaces are left plain or are decorated with names of the store’s key brands or with slogans promoting natural pet nutrition or other mission statements.

Ceilings are sometimes spray-painted black so girders and ductwork are invisible.

In conventional stores, floors often are covered with shiny light-colored vinyl tile to increase the ambient light level. Floors done in the homey-apparel approach are covered with material that resembles wood, and in some cases actually is wood. Other stores feature floors that are painted dark gray or a pleasing light brown.

"Wow” in 20 Seconds
"The first 20 to 30 seconds of the customer’s experience in the store are crucial. The curb appeal and the first looks left and right forms her opinion of the store,” said Chris Miller, president of Pacific Store Designs in Garden Grove, Calif.

Miller calls the front of a store the "decompression zone,” which should be at least 9 feet square so two customers can enter together comfortably.

If possible, use a larger space for this purpose with freestanding, movable and nontraditional fixtures: almost anything but a boring gondola or cheap cardboard shippers. This entry space should create the "wow” factor in consumers’ minds.

To achieve that homey-apparel effect, a combination of light wood fixtures and upscale-looking merchandise give an impression of abundance, e.g., treats, beds, collars, leads or toys.

If the air strongly smells of pet food and smoked bones, use an air purifier or introduce a pleasing environmental aroma, such as a cookie scent.

Frequently change whatever provokes the wow factor at the entrance during the course of the year, Miller recommended.

New Look in Aisle Four
Beyond the front and surface spaces, homey-apparel stores take different design approaches with the rest of the interior spaces, as well.

Examples include warehouse-style shelving painted unusual colors or the use of nontraditional shelving, such as silver-colored wire throughout. Shelves are sometimes garnished not just with clip strips but with handwritten signs touting product benefits.

This homey-apparel environment should earn two big payoffs. First is simply keeping traffic and sales from slumping in the face of ever-increasing competition. The second comes in the form of higher margins, as the concept should drive customers willing to pay more into the store. I say "should” because obtaining higher margins also depends on stores adding to their offerings unique products that are unavailable elsewhere. Moreover, there must be enough of these high-margin products to positively impact overall gross margin.

Encourage Customers to Linger
Since the 2008 recession, many store owners have told me that sales of consumables remain steady but customers are spending less on higher-margin accessories. Miller advocates a number of solutions to reverse this situation.

One study Miller cited showed that widening aisles from a standard 3- or 4-foot width to 5 feet increases the length of time that shoppers spend in a store by between 30 and 40 percent. Customers who browse longer invariably make more discretionary purchases—and these stores enjoy higher margins. Miller also encouraged retailers to fit more accessories into a fixed amount of space, e.g., by using swinging panels that accommodate more than three times the amount of merchandise that normally fits into a 4-foot section, and sliding panels that double the amount of items displayed in a 4-foot space.

Check out these ideas and more in the "Idea Store” model at SuperZoo 2014 in Las Vegas in July. 
 
Barry Berman is president and founder of NexPet, a co-op for independent pet retailers, and Grandma Mae’s Country Naturals, a pet food company. He has served in executive positions for Central Pet and Brinks, and entrepreneurial positions in the home furnishings industry. A graduate of Harvard Business School, he is a member of the World Pet Association board of directors. Contact him at 888-653-8021 or barry@nexpet.com

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