An effective Interior Design is a Design that is strategically thought and implemented to become a powerful Brand and Marketing force. It will turn people not only into customers but in advocates of the brand. A Store's Interior Design introduces customers to the Brand's universe. It is a creative and artistic mean that aims at aligning the brick-and-mortar and online experiences, making it a seamless and reconciled journey across all channels ( Read - Retail Strategy 2021) .
The Design of a store needs to take into consideration the inside as much as the outside meaning that it focuses on the exterior façade, the decompression zone, the interior design, the layout, the window display, the merchandising, as well as elements such as the materials, patterns, textures, the lighting and fixtures, the furniture and accessories. Every decision in the design is made to influence the customer behavior and every detail of the store becomes a means to deliver the essence, the story of the brand.
But, whilst the life expectancy of Retail Interior Design lies between 2 and 6 years, it can be intimidating for Retailers to undertake such work without a clear understanding of its ROI (Return On Investment). This is why it is very important for the retailer to communicate the KPIs and metrics used by the company to measure the store success so that the Interior Design can be inclusive of those parameters when making strategic design decisions.
“ Every decision in the design is made to influence the customer behavior and every detail of the store becomes a means to deliver the essence, the story of the brand."
Here are the KPIs Interior designers take into consideration and how Retail Interior Design impacts a company’s ROI:
Improved sales per square foot
Interior Designers especially if they have a background in Interior Architecture are specialized in improving the store’s functionality to help increase the flow and physical footprint. The objective is to enhance the store’s productivity by optimizing the use of the space, fixtures, store layout and merchandise whilst keeping an artistic and creative eye.
Increase retail conversion rate
Interior designers aim at redefining, reinventing the brand, creating a quest for individuality and authenticity. They aim at creating a stronger connection with the people coming into the store increasing conversion rate by turning them into buyers and advocates of the brand. The store becomes an experiential and interactive space where technology and aesthetics merge providing customers with Convenience, Experience and Personalization. In a pandemic and post-pandemic climate, this also means providing the customer with a safe environment, a strategic path across the store and product display so the customer feels secure to walk around the store and are encouraged to purchase.
Increase gross and net profit
Through Interior Design, the objective is to offer the customer with a unique universe in which applying premium prices becomes coherent with the environment. The application of premium prices allows the company to increase its margin, which positively impacts its gross and net profit.
Increase average order and transaction value
Designers impersonate the targeted customers to understand what brings value to them and what their purchasing journey looks like. They not only focus on the store’s layout and product display, they seek to maximize the space to create valuable upsell and cross-sell for the customer.
Increase online sales
People are now interacting with brands in many different ways and crediting sales to a single channel isn’t enough. As a consequence, companies need to align how physical store’s experience influences and complements ecommerce sales. From an Interior Design perspective this means focusing on in-store Experience and Convenience. For instance, fashion stores are starting to create experiential lounges for click and collect customers to wait in. Another example is the merge of technology displays across the store to expand the digital journey into brick-and-mortar. Following that trend, Burberry has launched its first Social Retail Store in China, blending the physical and social worlds in a digitally immersive retail experience.
Powered by Tencent technology, Burberry Social Retail Store is a space of exploration, designed to inspire and entertain luxury customers, where they can interact with the Burberry brand and products in new and exciting ways, in person and on social media.
Drive new sources of revenue
Retail Interior designers are specialists of the industry, always on the top of the latest concepts and trends. They can help companies to optimize their spaces to create new sources of revenue and introduce them to new retail concepts. For example, an increasing number of stores are investing on modular designs, a polyvalent design style that transforms a single purpose space into multiple purpose one.
𝐎 𝐬𝐡𝐨𝐩 modular design 𝐢𝐧 𝐂𝐡𝐞𝐧𝐠𝐝𝐮 China is a minimalist and beautifully designed shop that transforms itself into a trendy and fancy bar at night, becoming 2 business in one and generating revenues 24h.
Another example is the lease of space within a store. Small retailers are leveraging Interior Design to transform corners of their stores into attractive and dedicated spaces that digital native brands seek to rent and expose their products and make their footprint into the physical world.
Optimizing stock turn and gross margin profit
Inventory turnover is one of the most important KPI for retailers as it indicates which types of merchandise are worth carrying. Improving it is vital and optimizing the back house through a functional and practical design is a “must” for successful retailers. Interior Designers are the best specialists to optimize those spaces which will impact directly stock turn and gross margin profit metrics.
Leveraging interior design in retail is a strategic and fundamental move for every retailer. It strengthens the company's position within the market and contributes to reinforce its authenticity and individuality. The balance between aesthetics and functionality turns Interior Design into a sustainable competitive advantage.
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