Retail insight - Atmospherics

London Crown House 143-147 Regent St. London W1B 4JB T +44 (0)20 7478 0000 E info@liveandbreathe.co.uk

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Activating consumers to physically engage with your brand and drive sales

// About us We take time to understand consumers, brands and retailers leading to creative and compelling communications. Our specialism is retail, rather than a single marketing discipline, so our clients benefit from real sector knowledge and a truly integrated approach.

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Introduction

This thought piece celebrates real retail and shows how, despite growing online sales, nothing beats the buzz and experience gained from active participation in a store environment. We explore the role of retail atmospherics as an important differentiator from online competition and demonstrate how the right experience aids both planned and unplanned purchasing.

Shopping is a favourite pastime for us Brits; spending has become an enjoyable release for many people, despite rising debts and the tough economic times. In fact, last year (2009) UK retail sales amounted to 257 billion larger than the combined economies of Denmark and Portugal! Todays retailers have powerful emotional and social roles to play; they can satisfy consumers desire to connect with oneself and others, to escape, to indulge, to relax, to discover, and to enhance or tailor ones image. Most high streets or shopping centres satisfy all of these desires by offering a cross section of retailers to maximise appeal. As shoppers see others browsing instore around them, it helps the

In 2009 UK retail sales amounted to 257 billion larger than the combined economies of Denmark and Portugal
customer feel part of something greater, and share an affinity with others. Shoppers are able to have a dialogue subconsciously with the store and its environment through the stimulation of their senses and by picking up on a variety of messages directed at them. A great degree of satisfaction is gained from real shopping because of the intense degree of interaction that defines the shoppers experience.

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The fight against e-tail

These days its hard to open a trade publication without reading about the success of an internet company. It would be a major oversight for real retailers to ignore the threat of potential online competition in their sector. Consequently, finding ways to provide a good reason for shoppers to continue to make the effort to come out of their homes is paramount. Despite much investment by online retailers to improve their interface and navigation tools, it is hard to see, with current technology, how the internet can match the emotional experiences enjoyed by being in a store. For value driven sectors, where the shoppers needs are purely functional (looking for the best price) or when the shopper requires a long tail of choice, experience is less important. However for most aspects of retail, effective and emotive store design is becoming a more vital strategy for real retail. This can be seen in the recent figures published by Mintel in their June 2007 UK Store Design report, which showed that retailers invested 4 billion on shop refurbishments in 2006. Last year the figure grew by a further 4%.

It is hard to see how the internet can match the emotional experiences enjoyed by being in a store

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Retail atmospherics
Be it shopping on the high street or in a mall, with so much choice these days, retailers cant afford not to invest in atmospherics. According to Levy and Weitz (1995), Atmospherics is the design of an environment via visual communications, lighting, colours, music and scent to stimulate customers perceptual and emotional responses and ultimately affect their purchasing behaviour. This way, both customer and retailer enjoy mutual benefits.

// Atmospherics enhance the customer experience in several ways

Strengthening and differentiating brand equity Satisfing shoppers desire for experience Helping to put the customer at ease and encouraging purchasing Making the experience more ritualistic Dividing the store into zones

Atmospherics Metrics
Affinity Pleasure Arousal Dominance Flow
The closeness a customer feels to the values and attributes that the retail environment is projecting

The degree of enjoyment a customer attains within the retail environment

The level of stimulation experienced by the senses

The power balance of control a customer has within the retail environment

The holistic sensation a customer experiences when acting with total involvement

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Strengthening and differentiating brand equity

for specific messaging. Get any element wrong and the brand becomes sabotaged, leaving the experience less than satisfactory and the customer easily enticed elsewhere.

In the same way that a product communicates through its packaging, the retailer can project brand equity using atmospherics. The finer details of dcor, materials, lighting, scent, POS,

// Satisfying the shoppers desire for experience

Peoples desire for sensory stimulation has been hyped up with the advances in, and accessibility of, entertainment and technology that permeates nearly every aspect of their daily lives. The result has been a push in customers demands of retail experiences and the increased desire for immersion. Today, even the more regular, mundane trips such as visiting the supermarket are shifting towards experience-based shopping where carefully thought out lighting, music, plasma screens, information screens and aromas can encourage browsing or speed up traffic flow.

Bluewater uses piped birdsong and waterfalls to encourage a sense of calm

design and sound all culminate in creating a sensory extension of the retail brand. Each retailer will apply these elements in a very unique way that reflects the brands image/identity and acts as a communication medium Live & Breathes client, Bluewater, uses piped birdsong and waterfalls within the retail space to encourage a sense of calm, setting it apart from the noise and stress normally associated with shopping centres.

With consumers, especially young adults, seeking entertainment and stimulation in every aspect of life, retailers will begin to create engaging environments to keep shoppers interested, happy and, most importantly, in the store longer. David Jago Mintel Director

Desire for sensory stimulation has been hyped up with the advances in and accessibility of entertainment and technology

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anticipation Introduction

the act itself

remembering

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Helping to put the customer at ease and encourage purchasing

study conducted by Neuroco, at Lakeside, did just that, using ordinary shoppers wired up with electrodes and embedded video glasses. The research found that retailers with stronger atmospherics created a greater degree of impact on the brain and Yalch and Spangenberg (2000) found that the type of music effects the amount of time spent in store. Familiar music makes people feel like they have spent more time than they actually have in-store, whilst unfamiliar music encourages the customer to linger.

Extensive research has proven that creating the right atmosphere helps make the shopper relaxed and encourages them to let down their natural defenses. As shoppers lose themselves, they suspend reality, and can better enjoy the shopping experience.

As shoppers lose themselves, they suspend reality, and can better enjoy the shopping experience
Neuroco, the London based neuroscience company, conduct in-store studies to measure the impact of a brands marketing or retail space (including atmsopherics) through subconscious responses. This enables retailers to understand shoppers true feelings, which are later rationalised. Subtle mind-scanning and eye-tracking devices enable the researchers to identify the exact triggers which capture someones initial attention and first impression. Real-time recordings evaluate quantitatively the nature and intensity of sustained attention, emotional engagement, arousal and emotional attraction levels with that subject. A recent

// Encouraging Ritualistic Behaviour

A habit is an activity that happens on a regular basis but is not something the brain strategises about and therefore remains in the subconscious. It is functional and little pleasure is derived from the experience. Shifting a shopping trip from a habit to a ritual promotes brand loyalty - and frequency - because it becomes an emotionally charged experience and encourages behaviour to stick. A ritual consists of three parts that together form a structured and sequenced approach to shopping. Atmospherics can enhance each of the stages of the experience.

Unbranded coffee forecourt Stressed state

Inside Starbucks Relaxed state

and subsequent neurological responses. This was seen for example when comparing shoppers entering Starbucks to an open coffee stall in the forecourt. Neuroco found that the specific act of crossing the Starbucks threshold triggered a massive shift in mindstate from tension to relaxation, as well as a surge in emotional attraction. Selecting the right music is one of the most important aspects of atmospherics in putting the customer at ease. Milliman (1982)

Atmospherics can enhance each of the stages of the experience

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The Shopping Ritual

Each zone has used unique ways to interact with customers and help them navigate through a wide selection of options
Before walking into a store, for both existing and new shoppers, heightening the anticipation of the experience can be achieved with lighting, enticing entrances or window displays and appealing music or scent. This helps increase the arousal effect - a way of measuring how stimulated a person is in response to the environment. Studies have shown that the greater the level of anticipation, the greater the desire for a person to purchase something. memorable one. Whilst in the queue, the distinct aroma of Starbucks coffee and the uplifting world music helps heighten the drinkers experience and makes the purchase much more emotional. Using atmospherics (cross merchandising and POP) at this stage increases a positive mood and can be directly linked to impulse purchasing. Comfy sofas, dcor and wooden floors help encourage patrons to linger and make the experience memorable and enjoyable. Remembering the act is triggered by the stimulation of more than one sense. Good service, branded shopping bags and a positive exit experience also help enhance the final stage of the shopping ritual which encourages repeat visits and brand loyalty. Next time the shopper returns to the store, the arousal at the anticipation stage will be even greater and, therefore, increase the amount of pleasure experienced.

Heightening the anticipation of the experience can be achieved with lighting, enticing entrances or window displays and appealing music or scent
The Act Itself occurs inside the shop, and here an element often overlooked by academics is the importance of service and ease of navigation in store. Starbucks overcome their issue of not being able to serve customers immediately by providing an involving waiting experience that means the prolonged experience is a pleasurable and

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Dividing the store into zones

For stores that have mass appeal or sell a wide variety of products or services, segmenting the store into zones is extremely helpful for the customer in directing their search as well as using atmospherics to treat each area uniquely. Borders concept store in Ann Arbor, Michigan has used sophisticated atmospherics to achieve its vision of becoming a knowledge and entertainment HQ. Throughout the store, large

illuminated drums suspend from the ceiling and guide customers through the space in a way that is exploratory, intuitive, and easy. Curiosity is further encouraged by altering the feel of each of its main areas - travel, cooking, wellness, novels and childrens. Each zone has used unique ways to interact with customers and help them navigate through a wide selection of options to provide a personal and customised recommendation.

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Cyber atmospherics

In the past few years there has been a growing sense of urgency by internet companies to try to imitate some of the principles of real retail atmospherics online. Researchers such as Falk, Warren and Chen (Atmospherics in the Cyber World) and McKinney (Creating a Satisfying Internet Shopping Experience via atmospheric variables) have come up with mandatory features that make the experience more enjoyable and humanistic. Attributes like Usability, Navigation, Cyber-Interactivity, Trust, System Response Time and Music all improve the experience but cant satisfy at the same level as real retail on classic metrics such as pleasure, arousal, dominance and affinity. Its not just retailers that are investing in atmospherics. International manufacturers are spending the time and energy to ensure their brands are given the proper space and environment and merchandised as intended. This is reflected in the rise of Experiential Marketing and Activation budgets by the likes of P&G, Unilever and GSK. At Live & Breathe, we get excited by the untapped opportunities of using atmospherics in other leisure

Attributes like usability and music improve the experience but cant satisfy at the same level as real retail
spaces too, such as gyms, service stations, cruises, car showrooms, vending sites, and, surprisingly, many of the UKs shopping centres. We understand the science behind identifying customers needs and linking these insights back to create the right balance of stimuli which is crucial for the successful implementation of any retailers brand experience. We have a track record in solid retail marketing that delivers results, combined with creative thinking that enables our clients to be at the forefront of innovation. We are continually seeking out new technology and techniques to deliver ROI and accountability.

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Creative Retail Marketing Activating consumers to physically engage with brands and drive sales.

By specialising in the retail sector as opposed to a marketing discipline we are able to offer an integrated service to retailers and brands that value our retail experience. We balance the right amount of planning and intuition based on 20 years of sector experience, to get to answers quickly. Creativity and efficiency are delivered via a business structure built to reflect the strategic, creative, responsive and efficiency needs of the retail sector and by splitting skills sets appropriately across our London and Leeds offices. We marry the most ground-breaking creative ideas with efficient, detailed delivery. In the best retail tradition, we create work that delivers. We use our proprietary retail planning model to put shoppers at the heart of every brief and to therefore arrive at the most relevant and commercial creative response, whilst maintaining the right amount of art in the science. Live & Breathe is lead by CEO Stuart Mitchell, Chairman Adrian Watts and MD Nick Gray.

Leeds Giles House John Charles Way Gelderd Road, Leeds LS12 6QA T +44 (0)113 279 3232 info@liveandbreathe.co.uk

London Crown House 143-147 Regent St. London W1B 4JB T +44 (0)20 7478 0000 info@liveandbreathe.co.uk

To find out more about Live & Breathe please contact Nick Gray on 020 7478 0000 or email nick.gray@liveandbreathe.co.uk
Copyright Live & Breathe 2010

Thanks to Retail in Action for supplying photographs. www.retailinaction.com Neuroco conduct a full range of marketing and retail based studies. Their expertise combines neurological, psychological and physiological responses at both qualitative and quantitative levels. They are also able to measure the full range of sensory responses. Their aim is to provide fresh, new and deeper insights and evaluations into how consumers genuinely respond to the stimuli around them. www.neuroco.com