From Stockroom to Showroom

Why? Demographics point to the potential of a longer-term economic funk: GenY, while large in numbers, is youthful and won’t hit peak spending until around 2027. And GenX, at about half the size of GenY and Boomers, is known for more conservative spending habits.

This could add up to the beginning of a 17-year spending slump for retailers. To help, here’s our fourth idea, on a store design and experience strategy.

With more consumers going online to make their purchases, brick-and-mortar retailers need less space devoted to stockrooms. This is because goods ordered online go from warehouse to doorstep, circumventing the retail store. As a result, the proportion of square feet devoted to stockrooms is shrinking, transforming stores and their designs into something more akin to a showroom.

This store-as-showroom design concept provides a visceral experience with a product and its brand to support an online purchase to be made later. It also shifts the position of the retailer from primarily a purveyor of goods or services to primarily a purveyor of cultural meaning that then results in the sale of things. In other words, you go to stores to find out how stylists are pairing fabrics and colors together, to find trends, discover what is holding currency for your peer group. This also makes stores displays and styling more important than ever.

Moving from stockroom to showroom can result in a store design interpretation that borrows conventions from galleries, museums and, yes, retail showrooms to connote “curation,” which is appreciated by GenY. The concept also leads to another logical step: store-as-stylist. A store that’s taken this concept quite far is J.Crew, which uses creative director Jenna Lyons as the brand’s stylist. The retailer even makes in-store recommendations on make-up and nail polish to complement its clothing. J. Crew’s influence as a style-maker for GenY and Gen X has allowed it to cultivate relationships with other products and brands, such as Nars, Bobbi Brown and Stila, which are outside of its traditional realm. This broadening of sales and connections makes the brand more powerful as a purveyor of cool for GenX and GenY.

Another example is Eileen Fisher. The retailer is re-branding to attract GenX by changing its styling, the way it communicates its clothing systems and its use of technology to stay connected to customers. The store-as-showroom and store-as-stylist are both at work here to keep the brand evolving to attract a younger demographic.

In the end, this strategy results in the sale of goods just as before, but it’s a different means of getting there. The store supports the online presence (and purchase), not the other way around, and it’s evolving into something else as a result of it.

For more ideas, visit MulvannyG2’s panel discussion at IRDC this week on “The 17-year Itch: The New Shape of Retailing for Gen X and Y.” For more information, visit www.irdconline.com.

Randy Sauer is a principal with MulvannyG2 Architecture. This is the final article of a four-part series by MulvannyG2 Architecture that offers marketing, store design, and center development strategies to help retailers leverage Gen X’s spending peak and GenY’s rise into the next decade.