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October 25, 2012
Picking up a prescription at the drugstore? Try the sushi while you’re waiting. Or maybe get your nails done. Shopping for dinner? Consider visiting the in-store wine bar for a tasting and a recommendation to go with your meal.
Across the Northwest and the country grocery stores, drugstores and large retailers are augmenting their mix of products and services in unexpected ways, and these changes are being reflected in store designs and layouts.
The broad goal of these expanded offerings is to encourage more frequent trips by shoppers: trips that add up for retailers. Stores are hoping that a wider range of merchandize and services will attract new customers while filling up existing customers’ carts with items they normally buy elsewhere.
Take groceries, for example, where the marketplace is getting crowded. The top three chain drugstores Walgreens, CVS and Rite Aid have all vastly increased grocery options since 2010. This shift is especially relevant for drugstores because they are losing their market share of prescription drugs to other sources, such as online retailers, supermarkets and big boxes. One way to make up these lost profits is to offer items with higher margins, such as non-perishable food.
Drugstores also want to capitalize on convenience. They are banking on customers grabbing a quick and healthy prepared lunch or milk and bread on the way home rather than making a visit to the grocery store. Big boxes have expanded their groceries, too, as we’ve seen with CityTarget at Second and Pike in downtown Seattle, as well as Walmart, Family Dollar and Dollar Tree stores nationwide.
Much more than groceries
But it’s about more than groceries. Non-food items such as clothing, cosmetics, electronics, home decor, sporting goods and automotive-related offerings are being added to the mix. So are services. Walgreens, CVS and Rite Aid have all added in-store health clinics staffed with nurse practitioners to help with routine health issues. In some cases pharmacists or “wellness ambassadors” work the sales floor dispensing advice along with remedies, providing added value and another reason to visit the store.
Other drugstore sections now include delis, juice and salad bars, beauty counters and hair salons.
Retailers are also fine-tuning their selections on a store-by-store basis to create a local feel. This may include stocking specialty items such as organic groceries, high-quality (and higher margin) private labels, gluten-free options, ethnic foods, food and wine, or whatever best suits customers in a particular region or neighborhood.
Demographics drive design
One group driving these changes is baby boomers, who bring specific needs and higher expectations to the marketplace. They are looking not only for convenience, but added value; they want a shopping experience. To satisfy these customers, stores are branching out to be less like basic retailers and more like a hub for goods plus services.
As baby boomers age (within 10 years the number of Americans over 65 will jump 30 percent) and encounter more health issues, they will rely on drugstores and grocery stores for a greater variety of health items, and treat these stores as an extension of their health-care network.
Store design is changing as a result.
Room for in-store clinics and consultation areas are being added, replacing crowded aisles packed with merchandize. To further appeal to this demographic, stores are using larger writing on signs and price stickers, magnifying glasses on shelves at eye level, raised shelves to prevent bending or reaching, and swapping tile or linoleum floors for carpet or other non-slip surfaces.
Other design changes appeal to all consumer groups: simpler aisle navigation and clearer sight paths, more self-checkouts to encourage quick and frequent trips, and more space for refrigeration and food preparation to accommodate more groceries, delis, sushi bars and the like. All of these changes encourage customers to shop differently.
These changes present an opportunity for architecture and design firms to help their retail clients discover new and unconventional ways to use their space to attract new customers and reengage regulars.
As MulvannyG2 Architecture’s vice president of retail store design, Brian Fleener leads the development of their retail stores market sector and design strategy, and offers clients a global perspective on their retail development plans.