ImplicationsVOL. 05 ISSUE 06

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Independent Retailers in Small TownsJaeha Lee and Kim Johnson, Ph.D.

What Type of Retail Environment Do Small Towns Want?Over the past decade retailing has changed dramatically. The entry into and growth of discount retailers in rural markets and the expansion of e-tailing (virtual stores) has affected the competitiveness of the rural market and the success of the inde-pendent retailer. For example, Wal-Mart has more than 1,100 discount stores in the United States located primarily in ru-ral markets. Each store features an aver-age of 107,000 square feet, 225 sales as-sociates, and 120,000 items. In addition, the practice of out-shopping, or shopping outside of one’s local community, adds to the competitiveness of rural marketplaces as many rural consumers work outside of the communities they reside in and shop where they work.

Not only has retailing changed, but con-sumers have also changed over the past decade. Consumers are looking for some-thing beyond good services and products. They are looking for retailers to provide them with a shopping experience. Thus, many of today’s retailers feature “experi-ential retailing”—a shopping environment that aims to create a memorable experi-

ence. Researchers note that positive expe-riences cause customers to connect with the store in a personal way, stay longer, and visit again.

Within an increasingly competitive mar-ketplace, it is critical for independent re-tailers to know the expectations of their primary customer base: local customers. The ability to focus on the local custom-ers’ specific needs is a competitive edge for independent retailers.

To assist independent retailers in know-ing their customers, a survey was con-ducted by Lee, Johnson, and Gahring (in press) with 328 consumers in three small communities, with populations between 5,000 and 10,000. Our focus in this is-sue is, first, to share what consumers indicated they wanted from independent retailers and, second, to show how that information can be used in the design of retail environments to improve customer satisfaction and differentiate stores in the customers’ minds.

Design Advice from Our ResearchTo begin with, independent retailers are important to small-town customers. Over 50% of the survey participants shopped with independent retailers several times a week. Stores that attract customers are have simplicity and transparency. A transparent store is a store that is easy

Independent Retailers in Small Towns

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to navigate. User-friendly location of merchandise was identified as the most important feature to small-town consumers. Customers visit local stores often to buy few things, so they tend to go directly to their desired products rather than browse the entire store. Easy navigation is critical for small, local stores; it should be easy for the shopper to read the store and quickly identify the separate product areas. The advantage of a small store is the simplicity of store layout. If customers immediately can find what they want, they feel familiar with and comfortable in the store.

User-friendly location of merchandise is making the product easy to find, but it also can mean keeping the product in a consistent location. On a recent shopping trip, an elderly gentleman approached and asked for help in locating a fabric softener. He indicated that the product had always been shelved in a particular store location. When he went to the location, he could not find it. He was clearly upset. In this instance, moving the product, perhaps to refresh the appear-ance of the store, frustrated a customer. It is impor-tant that retailers find the balance between providing an environment that is easy-to-navigate and familiar against one that is stimulating, but not frustrating to shoppers.

Wide shopping aisles along with attractive prod-uct displays were also important features of the store environment for small-town consumers. Hav-ing sufficient personal space is important to people. People are troubled by store layouts that cause them to squeeze between fixtures or bump up against other shoppers. Customers that are continually hassled by others’ movements through the area or down the aisle will spend less time examining products and may even leave the store.

The right merchandise displayed in an attractive manner can draw customers into the store. Partici-pants in the survey noted that merchandise that was unique, was of high quality, and offered them choices was important to them. Yaron Meshoulam, director at the London design consultancy 20/20, has argued that shoppers at small local stores tend to look for ‘something for now’ when they cannot or do not want to go shopping outside of their towns. Thus, small store owners need to determine the items that their customers frequently buy and locate them on easily accessible aisles.

Merchandise also needs to be in stock and imme-diately available for purchase. As independent re-tail stores have limited physical space, it is impor-tant that they use their space in an optimal manner.

Attractive product displays are important to independent retailing.

Independent retailers still matter to small towns.

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Merchandise displays act as “instruments of swift persuasion” and should assist the con-sumer in making a buying decision. Once customers have en-tered a store, the chal-lenge is to use the mer-chandise and product displays to get them to move through the en-tire store. One method to achieve this goal is the use of color. Color-

coordinated groupings can draw the customer from one area of the store to another. The more merchan-dise the consumer is able to see and touch, the more likely they are to purchase.

If a store is transparent, it is also without clutter. In the area of retailing, clutter refers to things that in-terfere with a customer’s ability to navigate through the store and find what they are looking for. A com-mon contributor to visual clutter is sign pollution. Even though in-store signage was the most impor-tant promotional aspect to small-town customers, retailers can fail to manage the visual load they offer to their customers. It is important to maximize the signal-to-noise ratio of in-store communication by designing clear concise signs and eliminating signs that provide redundant, irrelevant, or inconsistent information.

In addition, the community connectedness of the local store was important to small-town consumers when shopping at local stores. These consumers con-sidered both a retailer’s support for local community events as well as the retailer’s financial or technical assistance to community organizations or schools. The design of a retail selling space could highlight connectedness to community. Placing pictures of the

community or community events that the retailer participated in on the walls of the store is one way to do this. Another method is to collect artifacts repre-sentative of the local community. One area retailer collected and displayed memorabilia of the local high school. Once in the store, customers frequently com-mented on the memorabilia and shared their experi-ences. This made the store a sort of repository of the community and could make being a customer of the store an expression of community loyalty.

Other Design ConsiderationsDominic Perks, managing director of the Stoke-on-Trent-based design and shopfitting company UNO, mentioned that the counter is frequently the focal point of a small store because it is typically located at the front of the store and may be one of the first aspects of the store encountered. This means the check-out counter is critical in both aesthetic and functional aspects. The check-out counter contrib-utes to the first impression of the store and the image of the store. In addition, the check-out counter should be located where the store staff can see customers and customers can see the staff in order to increase the staff’s ability to watch and help customers. By locating the counter at the right place, the store staff can identify when the customer needs help as well as deter shoplifting.

Merchandise should be easy to see and touch.

Small retailers cannot compete with “big boxes” on price alone.

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Many small retail businesses are located in main street districts. Potential customers can window shop as they walk on these streets. Small store own-ers should take advantage of this opportunity by us-ing their windows to attract these pedestrians. The window should reflect what the store is about. How-ever, the information should be simple so that the message is readily understood; people are walking by and not necessarily intending to stop.

These represent the key aspects of store environments that influenced small-town consumers’ satisfaction with their local small retailers. A store’s environment provides informational cues about merchandise and service quality of the store and influences consumers’ willingness to shop and buy at the store. Appropriate design of these selling spaces can contribute to re-tailer’s profitability. As discounters continue to enter into rural markets, small independent retailers will struggle if they try to compete on the basis of price. However, small retailers can highlight their strengths as small stores by providing customers with well-de-signed stores, unique products, and positive shop-ping experiences.

About the authorsJaeha Lee is a doctoral can-didate in the Department of Design, Housing, and Ap-parel at the University of Minnesota. Her research focuses on issues affecting small, independent retail-ers and impulse buying. She is currently completing her dissertation.

Kim K.P. Johnson is a professor in the Department of Design, Housing, and Apparel at the University of Min-nesota. She received her Ph.D. from the University of Wisconsin. Her scholarship focuses on consumer be-haviors and social psychological aspects of clothing.

She has co-edited three books and has publications in the Clothing and Textile Research Journal, Journal of Fashion Marketing and Management, Psychology & Marketing, Adolescence, and International Journal of Retail and Distribution Management, among others. She is president-elect of the International Textile and Apparel Association.

References—Bell, J., & Ternus, K. (2002). Silent selling. 2nd Ed.

New York: Fairchild.

—Blanchard, T., & Lyson, T. (2002). Access to low cost groceries in nonmetropolitan counties: Large retailers and the creation of food deserts. South-ern Rural Development Center. Measuring Rural Diversity Conference Proceedings.

—Burke, R., & Payton, P. (2006). Measuring and managing shoppability: Ten principles to convert shoppers into buyers. European Retail Digest, Summer(50), 66-78.

—Design Council. Does it really matter where I put the cash desk in my shop? Design in…retail. Retrieved April 23, 2007, from http://www.de-sign-council.org.uk/en/About-Design/Design-in/I-think-my-shop-should-make-more-money-than-it-does/Does-it-really-matter-where-I-put-the-cash-desk-in-my-shop/

—Design Council. I own a small store: How much design do I really need to invest in? Design in…re-tail. Retrieved April 23, 2007, from http://www.designcouncil.org.uk/en/About-Design/Design-in/I-think-my-shop-should-make-more-money-than-it-does/I-own-a-small-store-how-much-design-do-I-really-need-to-invest-in/

—Hedrick, N., & Bridson, K. (2003). A focus on Aus-tralian retailers’ adoption of experiential retailing practices. European Retail Digest, Summer(38), 1-4.

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© 2002, 2005 by the Regents of the University of Minnesota.

Creator: Founding Sponsor:

The MissionThe Mission of InformeDesign is to facilitate designers’

use of current, research-based information as a decision-

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integrating research and practice.

—Lee, S., Johnson, K. K. P., & Gahring, S. (in press). Predicting in-shopping using small-town consum-ers’ satisfaction with local retailers. International Journal of Retail and Distribution Management.

— Wal-Mart. Our retail divisions. Retrieved May 30, 2007, from http://www.walmartfacts.com/ar-ticles/2502.aspx

Related Research SummariesInformeDesign has many Research Summaries about retail design and other, pertinent, related topics. This knowledge will be valuable to you as you consider your next design solution and is worth sharing with your clients and collaborators.

“Merchandise Display Affects Consumer Behavior”—Journal of Retailing

“Perceptions of In-Store Shopping Experiences”—Journal of Retailing and Consumer Services

“Store Design Principles from Web-based Retail”—Harvard Business Review

“Downtown Revitalization and the Main Street Approach”—Journal of Architectural and Planning Research

“Retail Environments and Branding”—Journal of Retailing

“Preferences for Downtown Business Streetscapes”—Landscape Journal

“Retailer’s Community Involvement Influences Shoppers”—Journal of Business Research

“Fragrance in the Retail Environment”—Psychology and Marketing

“Pedestrian Planning in Small Cities” —Journal of Urban Planning and Development

“Trees Improve Neighborhoods Near Retail Environments”—Landscape and Urban Planning

“Sense of Community Created by Design”—Environment and Behavior

“Best Use of Retail Space Depends on Neighborhood”—Journal of Retailing and Consumer Services

“Retail Application of Sustainability and Historic Preservation”—Journal of Interior Design

Photos Courtesy of:Kim K. P. Johnson, University of Minnesota (mer-chandise displays, pp. 2-3).

The Metropolitan Design Center, Regents of theUniversity of Minnesota (remainder).