Reclaiming the four walls with sensory engagement

Store Sense

The Retail Acumen Series

By Stephen Ogden-Barnes (Retail Industry Fellow, Deakin University) and Danielle Barclay (Retail Consultant and General Manager, Retail Engine) 1

Contents
About the authors ................................................................................................................................................................ 4 The new retail dynamic ...................................................................................................................................................... 5 The physical store under threat ...................................................................................................................................... 5 Opportunities to reinvent the store .............................................................................................................................. 6 The brand experience ......................................................................................................................................................... 7 The new consumer .............................................................................................................................................................. 7 The youth market - future-proofing the retail store ..............................................................8 E-sense - how technology is connecting with the senses in-store..................................................................... 8 Shopper marketing in perspective ................................................................................................................................ 9 The sensory store .................................................................................................................................................................10 A focus on the senses .........................................................................................................................................................11 Sight: the visible building block of retailing .............................................................................11 Tactics and techniques ...................................................................................................................... 12 Touch: the power of the tactile experience ..............................................................................14 Tactics and techniques ...................................................................................................................... 15 Sound: amplifying the shopping experience ...........................................................................16 Tactics and techniques ...................................................................................................................... 17 Advances in sound technologies ...................................................................................................17 Scent: the most powerful sense of all .........................................................................................18 Tactics and techniques ...................................................................................................................... 19 Taste: try before you buy ................................................................................................................. 20 Tactics and techniques ...................................................................................................................... 20 Ambience - the hidden features ....................................................................................................................................21 The sensory store and competitive advantage .........................................................................................................21 Multi-sensory engagement: 1 minute case studies ................................................................................................22 Conclusion ..............................................................................................................................................................................23 References...............................................................................................................................................................................24

About the authors

Danielle Barclay is a retail entrepreneur having launched one of the newest retail technology agencies in Australia and New Zealand, Retail Engine, part of the CPM Group. Retail Engine has quickly developed a reputation as innovators in the retail space, developing leading edge solutions to traditional activities including point of sale, display, visual merchandising and product demonstrations. Their clients in Australia and New Zealand have included McDonalds, Mercedes Benz, Lion, NZ Lotteries, Telstra, Intel, P&G and Kimberley-Clark. With a retail marketing background spanning 11 years and three continents Danielle has worked in management roles both for FMCG companies and advertising agencies giving her unique insights into the way consumers think and more importantly how they interact with the retail environment. Steve Ogden-Barnes is retail Industry Fellow at the Deakin University Graduate School of Business. Following a diverse career in UK retailing, Steve moved to Australia to specialise in retail education, industry engagement and research. Steve has recently completed a PhD focusing on marketing decision making and sales promotion management in the Australian retail marketplace. In addition, he is supporting the development of the new Graduate Certificate of Retail Management at Deakin, due to be launched in 2012. Steve is a regular commentator on retail and consumer issues, for the Australian Financial Review, The Age, The Australian, the Herald Sun, BRW, ABC Radio and Today Tonight.

Our sense of sound, sight, smell, and touch have a powerful effect on us, and psychological research is just beginning to explain some of the physical, cognitive, social and emotional effects. Sensory stimuli can influence environments, improve the shopper experience and change the nature of behaviour in ways beyond our consciousness. [1], p. 286.

The new retail dynamic

The evolution of stores and shopping in Australia is part and parcel of the story of European settlement. As far back as the 1800s going shopping was still a relatively new social concept although cities and towns rapidly formalised to offer residents and visitors greater leisure and retail opportunities. New settlers continued to bring their diverse cultural traditions with them, buying goods from home producers, street-sellers or at the wharf or market-place. With the first purpose-built shops beginning to appear in Britain and Europe from the early nineteenth century, emergent colonial societies at the outposts of the Empire quickly followed suit. For these early consumers, the shopping experience was a special occasion - a trip to town, dressed in their Sunday best to marvel at the spectacles presented in shop windows, combined with the anticipation of a special purchase. The nostalgic smells, sounds and emotions of these vibrant experiences (for example corner shops with their tempting arrays of sweets or tins of biscuits) is still powerful and evokes memories of a time when shopping was far less complex and sophisticated but when the experience was at its most pure [2]. Since these early beginnings and for most of subsequent retailing history, the physical bricks and mortar environment has provided both the focus and the context for customer engagement. As economies evolved, established brands in all major countries developed large retail store chains and distribution networks. Competition was based on the traditional marketing pillars of price, product, place and promotion with the scale and resources of bigger organisations providing strong competitive advantage. As time progressed, independent retailers rapidly lost ground to both the shopping centre and the national (and international) chains as consumers sought the convenience of location and the confidence of the big brands. But all this is rapidly changing. The new dynamics of the global retail economy are arguably threatening traditional store environments, as shoppers increasing turn to alternative channels like the internet to browse, compare and ultimately purchase. Faced with this evolution, it is essential for bricks and mortar retailers to revisit the principles and practices of in-store consumer engagement and to understand in greater detail how their physical store environments can be leveraged to optimum effect to ensure sales optimisation, customer satisfaction and sustainable profitability.

The physical store under threat

The explosion of internet and multi-channel retailing in the last decade is having a considerable impact on the evolution of retail environments and shaping how people buy. The growth in online sales is capturing a significant and increasing share of the retail dollar, estimated by Forrester research to reach 8% of total retail sales in the US and Europe by 2014 [3]. In Australia the value of online purchases has grown at an average rate of 15% per annum since 2005, with Forrester predicting that Australian

online retail sales will more than double from $16.9 billion in 2009 to $33.3 billion in 2015. With the ease, convenience and cost effectiveness of new technologies at their disposal, consumers are increasingly playing the currency markets to take advantage of lower overseas product costs, and domestic retailers are finding it difficult to compete in key commodity categories like home electronics, books and music. In addition, online retailers are using web-based technologies - for example 3D to create virtual online environments where consumers can interact and engage with products and retailers much the same as in a physical store. Other consumer benefits offered by online shopping includes virtual shopping carts, product comparison and recommendations based on purchase behaviour, tailored advertising and access to limitless information and reviews. Finally, for the timepressured, there are no queues and no need to leave the comfort of home or the office. Technology enables consumers to do all this on the move with mobile phone internet penetration reaching 50% in Australia [3]. Social media has become a critical component in the retail message mix, changing the way consumers hear about products, research and acquire. Now consumers seek the opinion of others in relation to their purchases, bypassing (or at least qualifying) the mainstream marketing messages of retailers. There is no disputing the fact that the multi-channel consumer is here to stay. With the explosion of new connectivity between consumers, brands and channels [4], many retailers are strategising to capitalise upon these new market channel and dynamics, for example in evaluating the role that mobile phone applications and social media channels like Twitter and Facebook can play in relation to both sales promotion and transactions. Anticipating a very different future, some researchers have conducted focus groups with avatar-shoppers in virtual worlds like Second Life [5] to understand the similarities and differences between the truly virtual and the real world shopper. Research into virtual category management, for example in online grocery stores [6], is also helping ambitious web retailers to identify improvement opportunities for selling products, thereby driving transactional efficiency and optimising sales. The physical bricks and mortar store, it would appear, is under increasing threat in the multi-channel age as both research agendas and media attention turns to alternative channels of research, engagement and acquisition. So is it all over for the humble shop, or can retailers work to restore the high street experience with new strategies to re-engage the shopper at the sensory level?

Opportunities to reinvent the store

While the significance of the internet and social media in the retail mix is not to be underestimated, the very conservative recent sales growth noted in countries like Australia [7] reveal that retailers need more than ever to optimise every physical customer contact and engagement opportunity (and crucially every store visit) to drive customer numbers, sales and customer satisfaction in bricks and mortar environments. It is even more important to address some of the commonly reported negatives about the physical retail environment, for example the spatial and human crowding which affects consumer perceptions of their shopping experience [8, 9]. With the significant capital investment that retailers have at stake in physical retail stores, it would be short-sighted indeed to both underestimate and undervalue the significance of tactile interaction with a product and the human service interactions that can only be found in a store environment.

The brand experience

More than any other medium, the store offers the greatest potential for consumers to really experience the brand. Brand experience can be thought of as sensations, feelings, perceptions, and behavioural responses evoked by brand-related stimuli (Fig 1). These influence consumer satisfaction and loyalty, enabling the brand to sell products at a premium and create a powerful competitive advantage.

Sight: brand look

Sound: brand soundtrack

Sensory Brand Engagement

Taste: brand flavour

Smell: brand scent

Touch: brand texture

Figure 1: brand experience via the senses

The more powerful this experience, the stronger the brand impression and the retailers ability to create meaningful and memorable differentiation. In recent years, companies like Nokia, Apple, Barbie, and Gucci have opened flagship stores in various countries to provide more consumer-brand sensory engagement opportunities. For example the newly-built Barbie Store in Shanghai, a 6-floor megastore with a spa, offers a design centre, caf and interactive activities designed for girls. It rapidly became an experience hotspot with thousands of young shoppers now visiting the store every day. These flagship stores are a powerful example of the interactive avenues retailers are using to connect their brand with consumers in an experiential environment [10].

The new consumer

Consumers live busy lives and the shopping experience can be both time consuming and overwhelming. With so much visual noise and clutter to contend with it is not surprising some of the traditional methods of communicating within a retail space - for example static posters and product displays - dont have the same impact they once did. Faced with instant access to information and limitless choice, it is not surprising that many retailers have found it challenging to understand how to engage todays consumers and how evolve their stores for the future. The key issues for retailers are therefore not only to understand the evolving multi-channel retail mix, but also to understand the new, multi-faceted consumer and determine how the physical store environment can be fine-tuned to retain both its appeal and its effectiveness at a significant time of sector change.
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The youth market future-proofing the retail store

In considering retails long-term bricks and mortar future, it is also important to consider the priorities and preferences of tomorrows shopper. Research conducted into the demographic most likely to defect from physical stores to internet shopping - the youth markets - reveals them to be still significantly influenced and affected by the degree of in-store sensory engagement, despite the attractions of their multi-channel consumer environment: The ambience of retail stores, whether pleasant or unpleasant, moderates the arousal effect on satisfaction and in-store buying behaviours...Satisfaction in a pleasant retail ambience where music, hands-on experience services, playing areas and recreation are integrated maximizes consumer arousal. It has been observed that young consumers perceive positive effects on in-store behaviours if shopping arousal is high [11] , p.273. The findings presented in this case show that as shopper engagement and arousal increases, so do sales (when compared to regular, more neutral and transactionally focused shopping trips). This research further reveals that improving in-store sensory engagement can lift average sales by 5.4%. This presents retailers with a specific opportunity to win back the youth demographic by refreshing their approach to in-store retail engagement and sensory immersion, especially at key impulse buying times of year (e.g. Christmas) and not just by driving awareness at the pre-purchase stages with slick web-based and social media campaigns. The research conclusions support this sensory view: The perspectives of store ambience and shopping satisfaction effectively become a measure of retailing performance, as perceived by young shoppers, which can indicate directions for change in retailing strategy by offering more recreational infrastructure, extended working hours, places for demonstrations, and consumer education on innovative and high-technology products and services (pp.280-281). For other youth demographics that offer increasingly significant market potential (but are perhaps often overlooked by retailers) opportunities to leverage retail engagement and sensory experience have also been identified. Hence retailers who seek to develop retail environments which offer sensory rather than economic appeal (i.e. The Entertainer in the UK, and Smiggle in Australia) find opportunity not at the lowest price points but at higher levels of emotional engagement even with their youngest shoppers. For retailers therefore, focusing on the tangible, sensory aspects of consumer engagement in-store can provide a pathway to a more effective and productive retail store environment, even in the online age.

E-sense how technology is connecting with the senses in-store

It is inevitable that advances in multi-channel consumer technologies have had a significant impact on the traditional servicescape i.e. the retail store or shop. Consumers now commonly use both fixed and mobile technologies to conduct research and comparisons and increasingly these activities are integrated into their physical store visit [12]. Exploiting and incorporating these channels, as well as the increasing raft of sensory-based digital and technology innovations is arguably one of the biggest challenges - and opportunities - for retailers. It questions the very nature and future of the retail store as a static and generic shopper experience as opposed to a mobile and flexible one.

In many ways, digital retailing is evolving much more rapidly than bricks and mortar retailing. For example the increased use of SET (sensory enabling technologies, i.e. 2D, 3D and virtual try-on) offer significant store-based advantages to at-home shoppers [13]. As UK researchers investigating the use of 3D in relation to product presentation concluded: Authentic 3D product visualisation enables consumers to experience online products without directly inspecting them; it makes non-store retailers the best place to examine a product virtually; and it provides consumers with a sense of having a direct experience with the product [14], p.109 This digital or virtual communication method can of course be used within store environments as well as at home as part of an integrated multi-channel strategy. Digital communication plays a part in entertaining customers in the same way television or moving image communication does at home. It presents an opportunity to communicate multiple messages in a dynamic way within a small space. In relation to other virtual mediums of engagement, research from the UK has revealed that the use of digital screens to convey marketing messages increases both enjoyment levels and information provision to key shopper demographics, and they are more welcome and impactful in areas where shoppers are stationary, waiting or dwelling, (i.e. in queues, lifts or cafes), providing the content and messaging is mood appropriate [15]. The integration of the store environment with consumer technologies will redefine the shopping experience as retailers learn how to optimise the physical senses and leverage E-sense across the key shopper decision stages.

Shopper marketing in perspective

The increasing significance of shopper marketing as a retail discipline has provided added impetus for store-based retailers. Shopper marketing is defined here as: The use of insights-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience and improve business results and brand equity for retailers and manufacturers. At the most basic level, the buying process is shaped and influenced by the stimuli encountered and perceptions created in bricks-and-mortar stores. Shopper marketing however goes beyond the transactional basics to include all activities and points of engagement along a path to purchase designed to influence brand awareness and preference, store selection, in-store experience, comparison, purchase and, ultimately, post-purchase review and evaluation. Improved consumer insight and purchase behaviour data have made it easier to capitalise on the 68% of customers who make their decisions in store and the 70% of in-store purchase decisions which are reported to be made on impulse [16]. Although a move to develop and employ shopper marketing strategies is evident in FMCG environments like supermarkets and pharmacy, this is however often category-specific and supplier-driven with a focus on brand defence, brand promotion or brand attack, seldom encompassing the whole retail experience. Retailers, it is proposed, need to develop a more holistic store engagement strategy to capitalise on all the opportunities that a store visit can present, not relying solely on supplier-driven shopper marketing initiatives, but instead developing a comprehensive and robust understanding of how a shoppers senses in-store can be positively engaged and optimised in relation to the purchase process, in order to once again place the store at the heart of the decision-making process. Welcome to the sensory store!
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The sensory store

As the dawn of the virtual age is fundamentally changing the DNA of retail and new metrics of performance measurement enter our vocabulary, it is important for retailers not to overlook new thinking in relation to their physical store environments. At its core a visit to a retail store is and always has been a sensory experience: sight, sound, touch, scent and taste all shape the propensity to purchase, with the subsequent opinions, emotions and experiences shaping the purchase process. While retailers increasingly seek to connect with consumers with diverse multi-channel approaches (i.e. direct marketing, internet marketing, loyalty card segmentation), its vitally important to acknowledge the need to leverage engagement and immersion opportunities within the store. As it becomes increasingly difficult for store-based businesses to compete on price, range, convenience, time saving and transactional efficiency, its imperative to create a new and integrated point of competitive advantage and trading philosophy, one which capitalises upon the estimated 100 billion neurons in the human brain across the consumers five key senses. The impact of engaging the senses in store is often referred to as shopping arousal, a powerful trigger in the purchase decision process. The challenge is to understand and apply the appropriate strategies which enable the senses to complement, rather than compete with each other.

sensory strategies

sensory experience

sensory impact

holistic brand engagement

Figure 2: The sensory engagement process

A number of retailers have recognised the importance of revitalising the store experience via sensory engagement: Harrods in London recently ran an exhibition of the senses - an innovative means of increasing footfall to the store. Each of six store lifts was themed around a different sensory experience. The sound lift had a specially commissioned piece composed by Michael Nyman to demonstrate the impact of
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sound in a confined space: for sight micro lasers directed beams of light on Swarovski crystals. In another lift: different smells, including the scent of a new car, were emitted at the touch of a button and the taste lift provided the opportunity for customers to create their own ice-cream flavours. The touch lift demonstrated the challenges that face the sight impaired. The store even created a special 6th sense lift for cosmic ordering - the potential to grant wishes! Apple with its come and play feel and Nike with its sporty imagery both express their brands superbly through their store environments. Shoppers feel like they are immersed in the brand - an interactive emporium where they are welcome to engage and be engaged and browse and shop at their leisure [1] , p.287. For many others however, reactive price-based promotions rather than proactive shopper engagement continues to dominate promotional thinking in increasingly challenging times. Prior to focusing on the new strategies and solutions available to retailers to enable them to connect with their consumers active senses, it is essential to review what retail and consumer research has revealed about the potential to better leverage the shoppers senses and in doing so create more engaged, loyal and profitable shoppers.

A focus on the senses

Sight: the visible building block of retailing
The power of selling through sight alone has been fundamental to retailing throughout the ages. Beginning with the shop window, customers could view products available in store that would influence their decision to explore further. Visual merchandising, store design including colour and light, packaging, ticketing, signage, point of sale and space planning are all forms of visual communication techniques utilised by retailers to appeal to this sense. Most shoppers rely on visual cues to find their way around stores and assess merchandise displays to identify options and make final purchase decisions. In self-select environments like supermarkets, the merchandise has to largely speak for itself. Where product is best placed within the store environment and what affect placement has on brand recall and sales continues to be a key area of interest for suppliers and retailers. Recent research [17] into visual attention has confirmed that the number of product facings and product placement on the shelf have a significant impact on shopper behaviours. It is important to acknowledge that the research in this case identified that grabbing a shoppers attention with bigger, more dominant product displays doesnt always translate to increased sales, hence more of the same may not always be more effective for established brands. Niche brands were found to benefit most from greater increased display presence, a significant factor when retailers are predicting the margin implications of category performance as a result of display changes. For the average brand and consumer it is reported for example that: In the best-brand scenario, for occasional users of a low-market-share brand, doubling the number of facings increased noting by 28%, re-examination by 35% and choice and consideration by 10%. Positioning the brand on the top shelf (versus the bottom one) increased noting by 17% and choice by 20% and 36% of the gains in terms of brand evaluation came from attention (p.14).

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What is interesting to note from these specific category (pharmaceutical) findings is that the effect of visual impact is reported to be different for diverse demographics. This proves that engaging consumers with sensory visual stimulation is often more complex than may be imagined as other psychological and sociological factors act upon the decision making process. For example older customers in this case considered fewer brand alternatives and were less responsive to changes in the number of facings presented to them. It was a different story for younger customers in this case however, who were more receptive to changes: We found that in-store marketing works particularly well for younger, more educated, and opportunistic consumers, not because of differences in attention (attention patterns and the influence of in-store marketing were similar across all consumers) but rather because these consumers were more willing to consider and choose brands that were brought to their attention as a result of in-store marketing (p.14). Supporting this research into visual influence, UK research into grocery shoppers brand perceptions shows that consumers take a keen interest in the quality of merchandise display and presentation when assessing overall retailer image [18], focusing their attention and energies particularly on key sensory categories (e.g. bakery, fresh produce, flowers, fresh fish). The way that products are packaged is also a key sensory consideration, as consumers respond to the visual stimuli in the packaging design at the point of purchase across both visual and verbal (written) elements. Studies reveal that consumers are impacted in different ways by these variables, depending on the nature of the product [19]. For example for consumers of milk and washing powder verbal cues are more important for consumers than visual cues at the point of sale, even when time is short. The challenges for retailers are therefore to understand which verbal / visual packaging design mix is most appropriate for which product type, as well as giving consideration to how product information is efficiently conveyed to time poor consumers via technological means at key decision points. Colour also plays a role in shaping mood and perception and is culturally specific, with different colours holding different meanings in diverse contexts: We all share similar responses to colour, although some cultural variations exist. For example, white is the colour of marriage in western societies but is the colour of death in China. In Brazil, purple is the colour of death. Yellow is sacred to the Chinese, but signifies sadness in Greece and jealousy in France. People from tropical countries respond most favourably to warm colours; people from northern climates prefer cooler colours. Our heart rate and blood pressure rise when we look at intense reds; conversely, we can become tired or anxious by looking at large areas of bright whites or greys. In a retail environment, understanding those responses can be crucial to enticing that customer inside, and then enticing open their wallet or purse [20] .

Tactics and techniques

There are a number of new techniques available for retailers and marketers to re-invent visual communication and merchandising in store. These include digital signage which plays animated content via a screen, the use of projectors and specialised film on walls or windows, electronic ticketing using e-paper or small LED screens and sequence-lit signage and point of sale using electroluminescence paper.

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Telstras flagship Melbourne store has some of the most visible window display space in the central city with tens of thousands of people walking past each day. For many years Telstra have utilised traditional visual merchandising techniques with static signage displayed in the window but recognised an opportunity to try something new to better communicate with their technology savvy customers. As part of a recent Christmas campaign, window displays were brought to life via a 24-metre long interactive window. The space incorporated projected animation about product, a gesture-based snow globe which shoppers could shake by moving their hands and a giant mobile phone offering a live video call to Santa.

Image 1: Telstra connecting at Christmas

Image 2: Santa on call

In the supermarket sector, a recent innovation by Tesco to combine physical retail communication with mobile marketing in South Korea has captured the attention of marketers all over the world, winning a Grand Prix Media Lion at Cannes in 2011. The Homeplus Subway Virtual Store enabled commuters on their way home from work to enter a virtual supermarket and shop their way around the aisles using 2D photos of products. Shoppers scanned QR codes on the product images with their mobile phone and the product was added to a virtual basket and then later delivered to their home.

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Image 3: Tescos virtual store

This virtual shopping experience could easily be implemented within traditional physical retail spaces, enabling product purchase and without product displayed on shelf an presenting opportunities for both greater sensory engagement and inventory optimisation.

Touch: the power of the tactile experience

Central to consumer engagement in-store is the power of touch. Although virtual representations of products online can convey look, shape and colour, our sense of texture, temperature, weight and feel is realised only through touch. Retailers can however often make it quite difficult for consumers to readily access products, especially in upmarket retail environments where security may be high but staff numbers low. Its important to remember however that touch and ownership - or anticipation of ownership - are closely related, with recent US consumer research confirming that (in an experimental setting) when consumers physically handled a product their sense of ownership and their valuation of the product both increased [21]. Interestingly, other related research [22] revealed that the concept of touch holds further implications for purchase behaviour dependant on who has been seen handled the product: Specifically, male consumers responded positively to the contaminated (touched) product when it was touched by a highly attractive woman but not when it was touched by a highly attractive man. Similarly, albeit to a lesser extent, female consumers responded positively to highly attractive male contagion but not to highly attractive female contagion (p.698) Retailers should therefore not underestimate the role that touch plays in the buying decision process, especially where product integrity, quality and comfort are involved. So how can our sense of touch be optimised in retail environments?

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Tactics and techniques

We know that touch gives the consumer a sense of empowerment in their shopping experience which cannot be replicated online. It enables them to have a tactile interaction with the brand or product, thereby influencing their experience and subsequently their purchase decision. In fashion retailing a lot of the decision-making is tactile. Shoppers like to feel the textiles as well as try the clothing on, fuelling emotions for aspirational decision-making. Beyond the traditional `product touch approach in-store, intangible products can also be experienced and there are many other ways of bringing touch into the traditional retail environment. Touch screens have become more commonplace within retail spaces as a way of mimicking the flexibility of an online experience in-store. Kiosks with in-built touch screens have enabled many retailers to present more product information and choices to consumers, increasing their product knowledge and simplifying the purchase decision. However many retailers have tried and failed with this approach, perhaps underestimating the need to provide consumers with unique content which adds value to their sensory shopping experience. Footwear retailer Adidas has recently taken the idea of touchscreen shopping into their stores with the introduction of an interactive shopping wall enabling shoppers to examine up to 8,000 3D models of shoes. Shoppers can navigate and manipulate the virtual product showcase using touch gestures. The benefit for the shopper is that they can enjoy browsing in one location in store, have access to a more extensive inventory and at the touch of a button can have all their questions answered and choose to purchase. Rather than replacing the store, this technology is a good example of how to blend virtual technology with more traditional in-store sensory engagement.

Image 4: Adidas in-store touch screen

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In Australia telecommunications retailer Telstra has again applied the same concept of touch-enabled communication to their Melbourne flagship store windows. For the launch of the Windows Phone 7 mobile handset, Telstra brought the new user interface to life for consumers by projecting an image of a large phone onto the window and installing a paper thin touch film behind, enabling consumers to interact with the device from the street. Hence shoppers were able in interact with the brand at a sensory level prior to entering the store, breaking the tradition divide between the exterior and the interior of the store.

Image 5: Telstras interactive window

Sound: amplifying the shopping experience

Research has consistently revealed that music and sounds influence the shopping experience in retail environments and can affect consumers in very tangible ways. Its important for retailers to consider the soundscape of the retail environment, especially as the perceived congruence between music and the brand or retail product has proven to affect consumers in-store response, dwell time and perceptions of brand [23]. As our auditory sense is keenly developed, unattractive or unappealing sounds can literally drive customers away, but by the same measure the targeted or timed use of sound stimulation can be used to attract - or maintain - shoppers in a featured location. As well as creating mood and ambience, music can also be used strategically in relation to service, with researchers in the US finding for example that shoppers negative perceptions of crowded retail environments are modified when slow-paced music is played. The worst sensory combination is conversely proven to be providing loud, frenetic music in crowded settings [24]. The type of music played in-store has also been identified as tangibly influencing shopper moods [25] with sad music perhaps not surprisingly being identified as fostering more negative consumption emotions while happy music fosters positive buying emotions and can lead to customers spending more time in store. Consumers tend to underestimate time when their auditory senses are positively engaged. For retailers interested in increasing both shopper dwell time and consumer sentiment, there is a simple, valuable recommendation proposed by the authors in this case: ...Results confirm that if retail stores adopt joyful music, positive emotion can effortlessly be produced, leading to the underestimation of time perception (p.178).
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Its critical to ensure that the music experienced in-store reflects the consumers perception of brand. US research [26] into the brand / music fit in a high-end supermarket for example found that playing brand-appropriate music increased average in-store dwell time by 22 minutes. Although there was no direct evidence in this case of increased spending, choosing the right music did increase the potential selling time available to the business. Actively considering the brand music fit may be more significant for retailers whose products serve a clear emotional - rather than a functional - need, where mood is more closely linked to purchase behaviour. French research [27] has revealed for example that when romantic music was played in a florist shop, more money was spent by customers than if no music or pop music was played. These findings have obvious implications for niche retailers who are seeking to create a particular brand feel and market position in specialist sectors and who need to leverage both dwell time, average spend and repeat visitation much more so than mass or discount retailers.

Tactics and techniques

Music should add to the ambience of the store, but, unless it is crucial to the product and market, should not be so loud to be immediately noticeable. It should however mask the sounds of customers moving about the store, employees working or the conversations of people across the room. The challenge with using sound is scheduling the right music to enhance the experience for a broad demographic, as well as minimising the annoyance factor, particularly for the retail staff themselves. In-store radio is one-way retailers have experimented with sound, choosing music to influence customer behaviour and scheduling audio advertising messages throughout. For many retailers this has also become an additional valuable income stream, offering advertising space to suppliers. Regency Duty Free in New Zealand used sound to influence customer behavior in their stores located at Auckland International Airport. The customer demographics and shopper behaviour in the Departures and Arrivals stores each store were slightly different so distinct playlists were created to offer specific shopper appeal. In the Departures store, people were browsing quickly before moving down to the departure gates, so the playlist was changed to reflect a slower tempo, and to feature popular/romantic music designed to reduce the perception of time pressure and extend dwell-time. In the Arrivals store it was completely the opposite. Many flights and customers arrived at the same time and the majority of customers already knew what they were going to buy so the playlist for this store consisted of popular music with a fast tempo to get people moving quickly through the store to reduce crowding and queuing.

Advances in sound technologies

Directional sound, originally developed by the US and Soviet Navy for underwater sonar, is an effective tool to emit sound for the purpose of interruption within a retail space without generating constant sound within the space like a normal speaker. The speaker concentrates acoustic energy into a narrow beam so that it can be projected to a discrete area, much the same way as a spotlight focuses light. When a sound beam is aimed at a listener, that person senses the sound as if it is coming from a headset or from inside the head.

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When the listener steps out of the beam, or when the beam is aimed in a different direction, the sound disappears completely. The Intel brand is one of the top ten known-brands in the world, perhaps most recognised for its iconic five-tone Intel inside musical jingle composed by Walter Werzowa and first developed as sound branding in 1995. Intel recently developed a display for one of its Australian retailers using a built-in directional speaker to send the recognisable Intel brand sound toward the entrance to the electronics department to focus attention and attract customers to the branded display. Sound doesnt just need to be utilised inside the store. A surface speaker no larger than a mobile phone can be used to turn a glass surface like a shop window into a speaker to emit sound to passing foot traffic. Telstra have been utilising this technology for the past year as part of their innovative window campaigns, turning 3 metre high panels of glass into large speakers to convey audio messages to support the windows visual communication.

Scent: the most powerful sense of all

Our sense of smell is highly developed and like our auditory senses different odours can evoke different moods, perceptions and emotions. Scent has the power to strongly influence people because it has a direct connection to the emotional seat and memory centre of the brain. This has become an increasingly significant research arena. The Sense of Smell Institute in the US for example sponsors research into the diverse impacts and effects that smell can generate with impact and effect distinctions drawn for example between genders and life stages. Scent can be used strategically for many purposes in retail and consumer environments. Increasing numbers of fashion retailers have created a brand-scent for example, although established technology enables particular parts of the store and specific products within it to offer diverse olfactory experiences. Scent can be used to attract consumers to specific parts of the store and can prompt strong brand and product recall. Scent can also prompt positive (or negative) associations and memories and can assist in the formation of a stronger bond between retailer and consumer [28]. Scent can also be used overtly to achieve a particular purpose or covertly to change behaviours to the retailers advantage without necessarily being noticed by the shopper. Research has shown that scent has the ability to improve peoples mood, make them happier, make them more alert, reduce anxiety and make them more willing to help and get along with others. Used alongside other positive brand experiences such as high product quality and excellent customer service, scent marketing is a win-win situation for both the company and the customer. [29] There are obvious ethical issues in relation to the covert use of scent to change behaviour [30] but the fact remains that many retailers do not optimise store or category scent management. With the average human able to identify over 10,000 individual smells, and with our sense of smell being so vital to our environmental perception, it could be time for retailers to develop their own new car smell, capitalising on the potential that scent branding can offer.

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Tactics and techniques

For retailers and manufacturers looking to attract customers and develop a long-lasting relationship with them, emotion and memory are critical connections and should be some of the top goals of their marketing campaigns and branding efforts. Scent devices have been developed to disburse realistic scents into the air using fans rather than sprays, enabling a more authentic scent experience. Sony for example uses a branded aroma in its SonyStyle electronics departments, aiming to make browsing more appealing to women. Finding the right scent involved months of research by ScentAir, a firm specializing in scents for retailers, with over 30 mixes being prepared for SonyStyle executives to test. In the end, a mix of a full-bodied orange, vanilla with a dash of cedarwood was selected. Why this mix? SonyStyle felt it accomplished the goal of the appealing to women with the orange and vanilla, with the scent of cedarwood adding a degree of masculinity preventing the scent from being perceived as too feminine, and thereby not alienating male shoppers. Lush stores present a strong example of engagement via the sense of smell. The scents emanating from the products displayed provide a strong motivation for shoppers to enter the store, who quite literally follow their nose.

Image 6: Lush, Hong Kong

The power of scent is also demonstrated in speciality retail environments, for example bakers, florists and tea and coffee outlets. For retailers who wish to engage shoppers at a deeper emotional level, it is important not to underestimate the power of scent as part of a sensory strategy in attracting customers, increasing dwell time in-store, encouraging sampling and trialling and creating strong brand recall cues.

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Taste: try before you buy

Case studies and research have revealed that perhaps the most basic form of sensory engagement - product sampling and trial in store - can offer significant benefits in terms of sales lift. Research into sampling at Costco in the US [31] highlights for example that tasting or experiencing a product via sensory engagement increases a customers perceptions of enjoyment, increases the propensity to impulse purchase and is effective not just for low cost food and beverage items, but for more expensive non-foods products. Yet many retailers still do not implement a coherent sampling strategy to capitalise on seasonal or promotional product opportunities to engage consumers senses of taste, touch, smell, sound and vision.

Figure 3: Involving shoppers via demonstration

Tactics and techniques

Sampling has long been one of the more widely used promotional tactics among consumer packaged goods manufacturers because they can generate trial while instantly monitoring sales via a physical count of merchandise sold on the event day. In addition, in-store demonstrations are well known to be an effective means of introducing new products to customers in grocery, consumer electronics, toys and a variety of other categories. Simply put, the easiest way to induce trial and encourage repeat purchase is to literally put the product into the consumers hand. The feedback generated instantly in this way has helped make in-store sampling part of the integrated launch strategies for many new products and recent studies have shown this marketing technique can not only produce an uplift in sales for up to 20 weeks after the campaign but also create a `halo effect uplift for trial of the whole brand family of products [32].

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Capitalising on the power of sampling, Sample Central specialises in facilitating product trials, providing a space where brands can promote and test products in a `try before you buy store model. Once signed up, consumers can try out the latest and often unreleased products and take samples home for free. In return, Sample Central members complete surveys, the results of which are presented to the manufacturers, providing valuable consumer insight. But what about products you cant taste? Consumers have varying tastes and increasingly seek personalisation unique product combinations. The car purchase process for example presents customers with the opportunity to tailor a vehicle to their individual needs, with variables including colour, interior finish and options. Mercedes Benz in New Zealand recognised an opportunity to bring this purchase process to life by developing an interactive display where consumers could see, smell and feel the real car but also create their own virtual car through a touch screen. Customers are able to build their ideal car on screen, viewing the colour choice and accessory options as part of the decision making process.

Ambience the hidden features

Subtle factors experienced through the senses - either individually or collectively - can affect our sentiment in relation to degree of relaxation, stimulation and perceived market position. According to research differing light and temperature combinations act to influence our perceptions of the retail offer, with soft or warm light tones and cool or warm temperature variables creating different perceptions in diverse product sectors [33]. Its vital for retailers to determine how these key ambience factors are optimised in relation to their brand and product offer, by capitalising upon both academic research and industry best practice.

The sensory store and competitive advantage

For emerging retailers who for reasons of budget availability arent able to secure the most convenient locations i.e. shopping centres or popular strips, increasing the sensory and hedonic appeal of the retail environment could help overcome some of the convenience and accessibility concerns that customers may have, as well as serving to differentiate the retail offer in relation to the more accessible, but less memorable competition. US researchers investigating the potential for greater sensory appeal and differentiated service provision [34] concluded that: Store managers have limited resources, and may have to make trade-offs when they allocate available resources. Our findings suggest that investments into the hedonic aspects of a store can help retailers overcome, and perhaps even exploit, the commonly acknowledged disadvantage of operating a store that lacks convenient accessibility...If a store manager is not able to select a location that is easy to access, it is possible that increasing the sensory and experiential aspects of the shopping environment could enhance shopper commitment to the store (p.257) This has strategic significance for the new wave of independent niche retailers and franchise operations who are seeking to capitalise on the slowdown in mass retail markets by creating smaller and more focused market offers. In order to connect effectively with consumers who may be disaffected by the retail blandscape, developing deep skills in both consumer psychology and in innovative sensory

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retailing tools and technologies is essential, especially if the competitive cornerstones of their retail offer are based neither on price nor location.

Multi-sensory engagement: 1 minute case studies

Having considered the evidence in support of the greater use of sensory engagement in retails future, further ways in which this can be tangible realised will now be presented in brief, summary case studies. Traditional in store sampling and demonstrations present the opportunity to engage multiple senses. Kimberley- Clark, manufacturer of innovative health and hygiene products, recently trialled a new supermarket demonstration concept in Australia for their Viva cleaning product range. The strategy incorporated dispersing the scent of the products via scent machines, innovative digital visual signage, traditional product display, product demonstration and one-on-one in-store conversations with brand ambassadors. Results showed a 40% conversion rate of shoppers compared to previous campaigns achieving only 10-15%.

Image 7: Sensory engagement in action

Coles supermarkets have recently trialed a new store design strategy which incorporates sensory engagement and stimulation. Open store layouts facilitate a clear line of sight, and present well-lit, attractive and engaging displays, minimizing the sense of clutter and confinement. Products are placed in close proximity to the shopper with barriers to both store entry and product handling noticeable reduced. To create a, fishmongers, bakers, and butchers are encouraged to actively promote their wares. The scents of aromatic products are emphasised via open displays, and customers can see bakers, butchers and fishmongers at work, reminiscent of a market-style ambience. In addition, product sampling is encouraged and promoted by staff in-store.

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Wholefoods market-style shopping experience is Americas fourth- largest food retailer chain and the worlds biggest, and most profitable organic grocer. Whole Foods has a distinct and innovative approach to food retailing that clearly differentiates itself and delivers a unique customer experience. Wholefoods emotionalises the shopping experience by appealing to the five senses. Shoppers are encouraged to taste and touch, with the aromas of bread, coffee, smoked meats, and fruits defining the retail atmosphere. Carrefour, the worlds second-largest retailer and the largest in Europe, has evolved the traditional hypermarket concept with its innovative Carrefour planet concept [35]. The new concept has been carefully developed to appeal to all senses, and includes wide aisles, softened lighting and nine colour-coded and themed zones, redesigned and rebranded to make shopping more enjoyable and attractive for customers. The market area offers fresh food in a marketplace atmosphere with a focus on the customer experience with sampling and cooking lessons for example. The organic area offers organic brands and their own private bio brand and the beauty area offers a virtual make up consultation and haircut area. In addition, special in-store events are scheduled throughout the year, designed to arouse curiosity and encourage repeat visitation. Multi-channel technology is central to in-store communication with digital signage, kiosks and demonstration centres. Through Carrefour planet, this retailer breaks with retail hypermarket traditions and uses the merchandising methods best suited to each specialised selling area: self-service, vendor-assisted sales, personal behind-the-counter sales and vending for example.

Conclusion
At a time when the retail industry is undergoing perhaps its most fundamental period of change since the introduction of the shopping mall, retailers need to consider how their asset and channel mix can be optimised for competitive advantage. The growth of online retail (and more recently m-commerce) has naturally focused retailers attention on virtual channels of sales and promotion. It is important to remember however, that the store experience is - and will be for the foreseeable future - a vital point of interaction. For a low margin industry like retail, with high bricks and mortar investment and operating costs, getting the best out of the physical store is more important than ever. As illustrated, retail stores are essentially sensory blank canvases, upon which retailers can create their own picture of the engaged shopper. Understanding the subtleties of how the senses can be engaged through light, sound, touch, smell and taste, interwoven with brand architecture and intelligent promotional agendas will be essential, if retailers are to capitalise upon the potential of customers in-store. For retailers who embrace this sensory challenge, the future of bricks and mortar stores will be very different in the years ahead, but it will without doubt be a much brighter, more interesting and a more engaging future. That seems to make a lot of sense!

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Contact
Danielle Barclay General Manager Retail Engine Australia & New Zealand 155 Cremorne Street Richmond Vic 3121 Tel: +61 3 9226 6403 Mob: 0439 428 158 Email: danielle@retailengine.co Website: www.retailengine.co

Steve Ogden-Barnes Retail Industry Fellow Deakin University Graduate School of Business Faculty of Business and Law 221 Burwood Highway Burwood Vic 3125 Tel: +61 3 9244 5021 Mob: 0458 321 008 Email: s.ogden-barnes@deakin.edu.au Website: www.deakin.edu.au/buslaw/gsb/retail