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11.08.2002

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For more Hartman Group articles on RETAILING & RETAIL DESIGN...

NATURAL SENSIBILITY

Wellness Myth #1: Retailers Already Know and Understand the Wellness Market

HARTBEAT

Store Within a Store: Segregation, Integration, Gentrification and Beyond, Part One

Store Within a Store: Consumer-Driven Solutions, Part Two

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Messing With Success: the Segregation Vs. Integration Debate, Part One

The dilemma of whether to integrate or segregate specialty and conventional products at retail has finally been solved. It turns out that trying to determine whether integration will outperform segregation or vice versa is simply the wrong exercise. The question shouldn't be whether to integrate or segregate, but rather how to integrate or segregate. In other words, the solution to the original problem is to ask a somewhat different question.1 I admit this is cold comfort to those who feel compelled to decide once and for all between the two, but beating our heads against the old form of the problem hasn't really gotten us anywhere. I believe the real question we need to answer, and the question that I intend to examine here, is how to approach implementations of particular store design features, rather than what features we should implement.

No doubt, we've all read numerous expert opinions favoring one approach and opposing the other. Proponents of segregation often argue that manufacturers benefit from a segregated section that either presents their products in an appealing manner or makes invidious price comparisons with conventional products more difficult. Champions of integration often play the convenience card, suggesting that consumers want products organized in a consistent "logical" manner and will not ordinarily seek out separate sections. For the record, we often come down on the side of integration. Of course, reasonable people have advanced reasonable counter-arguments to each of these positions. Indeed, the long history of the debate is nothing if not testament to the fact that both sides have merit. We have probably all experienced situations in which a well-appointed specialty area or carefully integrated product mix resulted in an elevated store image. By my latest tally, no one yet has made a convincing argument for the inherent superiority of integration or segregation.

We have also asked consumers what they think. But when we listen to their answers, we have to pay close attention to how they express themselves, because it turns out consumers want both formats � just not at the same time. For example, when advising grocers on the wisdom of devoting a special portion of their store to all things good, such as solving the riddles of the universe through an organic lifestyle, most consumers will admit they feel a little funny spending much time shopping in areas as special as that. As one woman put it,

I don't understand why they insist on putting the organic stuff in a different section of the store. I feel like everyone is looking at me weird when I shop over there, like I'm a freak. I just want the milk by the milk and the yogurt by the yogurt.

Taken on its face, this comment might lead us to jump to rule #1, "Segregation creates leper colonies of products." As handy as such rules prove in some circumstances, the real lesson this shopper teaches us is not to design any part of the store in such a way that makes shopping an uncomfortable experience. I know, that was probably lesson one in the prerequisite to Retail Marketing 101. But to get to the bonus round you need to understand what in the design of the section made that shopper feel as if everyone thought she was a freak. Here's a clue:

It's too much to go in there [natural section of supermarket]. The wood floors and shelves, I mean, come on! It seems like we're paying more for natural foods so that they can pay for the fancy setup.

Apparently, this particular specialty section does stand out as special, but not in a good way. In fact, the section essentially challenges passersby, daring them to buy anything displayed on a wooden shelf. I can imagine what a store that evokes such sentiments must look like outside of its natural section. Every other area of the store is probably the antithesis of "natural," with row upon orderly row of metal shelves and sickly yellow fluorescent lights reflected in a sea of beige floor tiling. Everything except the one natural section working together in perfect harmony to drive home the message, "We're not special." In an environment where every sense registers "mass market," a specialty section awkwardly grafted onto the existing design will virtually guarantee reactions like the ones quoted above.

The question is why didn't the retailer see what the customer saw. Did they truly believe their wood grain oasis would seduce customers into going organic? Frankly, I have a hard time believing that retailers who've unsuccessfully built a store within a store did so thinking their customers would be enchanted by a new section simply because it looked different. Most likely, some expert convinced them it was the thing to do to meet the "need gaps" of the new wellness/natural/organic/whatever customer. The unfortunate thing is that, properly executed, a specialty section probably would have worked. But the retailer's mind was fixated on the "solution" offered by the segregation model rather than on exactly how to create a specialty section that enhanced the existing store experience.

We can turn this around too. Stores that impress with their upscale, quality design also project a high-ticket image and provide a fertile ground for showcasing specialty products in specialized store areas. As consumers, we're not completely psycho and we do expect to pay top dollar for top quality. After all, if we're to believe a retailer's claim to quality, we better see at least one outrageous price. In settings such as these, shopping in a specially designed section of the store can actually make you feel like a high roller. At the very least, you would not expect the sideways glances of other shoppers that put off the woman who stepped into the natural products section of her neighborhood supermarket.

Of course, we consumers are at least partly psycho because we sometimes allow our perceptions of a store's overall quality to convince us that we cannot afford products we have not even seen. It would be a mistake under these circumstances to unceremoniously blend new products of extra value into the existing mix, since shoppers already avoid the "too expensive" offerings. Any attempt to integrate the new products with the old, especially as a way to draw attention to an entire shelf set, should include a plan to influence or take advantage of customers' perceptions of the store as a whole. I'm not advocating the use of gimmicks to trick customers, but rather to take the customers' point of view and think about the shopping experience as opposed to the selling experience.

Stay tuned next week for Part Two.

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