Recession Survival Kit

Call it a recession, a correction or a seventh-inning stretch, the results are the same: Costs are up, consumer confidence is down and many retailers are struggling to make ends meet. According to the International Council of Shopping Centers, almost 5800 U.S. stores will close in 2008.

But while some are closing, others are adapting. They’re realizing customers aren’t saving every penny, just changing how and why they spend it. In tough times, retailers who understand what’s important for consumers – and build their brand around those key ideas – not only will survive but will soar.

Conditions are giving rise to a new type of retail environment, one more attuned to the ebb and flow of today’s consumer lifestyle. Many of these retail environments fall into categories RTKL Associates has identified as the Five E’s.

EXPERIENCE Try now, buy now.

Shoppers want to know more than what the product does and how much it costs; they can learn that much on the Internet. They want to know how the product makes them feel.

In response, more stores are letting shoppers “kick the tires” to build desire and spark an emotional connection with the product, which is coming out of the box, off the shelf and into interactive displays that encourage pre-purchase use and testing.

At the same time, retailers are transforming store employees into brand emissaries. But for these changes to have their full impact, the design environment must reflect the brand, as well. At the Apple store, where well-trained employees are Mac evangelists, store design reflects the clean lines and understated sophistication of the latest products.

ESCAPE Go to the happy place.

With media coverage constantly reminding us of the weak economy, it’s no wonder people are looking for an escape. Economists may be ringing the alarm bells, but the malls are alive with the sound of Muzak.

After the September 11 attacks, tourism dropped but Las Vegas thrived. People wanted a getaway.

Today, escapism centers on personal transformation. Consumers are looking for ways to improve their lives by either educating themselves or smartening up their environments. Home renovation shows are flooding the airwaves and a new wave of retailers is capitalizing on consumer demand for life-changing – or kitchen-renovating – experiences. With dollars tight and mortgages even tighter, home makeovers are the new escapist delight.

EDUCATE Get smart.

For today’s consumers, experience is good and escape is great, but education really charges their batteries. Smart brands are blending shopping with an educational component that both broadens product knowledge and fosters a deeper sense of brand loyalty. Who knew coffee could be so complicated until Starbucks came along?

Whole Foods has moved to the head of the class with opportunities to eat, learn, socialize and, yes, shop. The Chopping Block in Chicago’s Merchandise Mart turns the retail experience upside down. It operates primarily as a culinary school, with a gourmet shop irresistibly located on the way to the exit. Other retailers, particularly consumer electronics specialists, are experimenting with similar approaches to attract customers and extend the relationship with loyalty encouragements, like problem-solving services and product-related classes.

ENHANCE Get better, stronger, faster.

Wellness is priceless. Even with less money to spend, people want to look good and feel good, whether that means a serenity weekend package, a nip-tuck or a soothing cup of herbal tea.

Healthcare is virtually recession-proof, and it’s going mainstream. A wellness culture is permeating all aspects of our lives, from the food we eat to the exercise equipment we buy. Baby Boomers – once famously urged to “turn on, tune in and drop out” – are now looking for ways to tone, firm and tighten.

Health and fitness outlets are sprouting across the retail landscape. Massage kiosks are cropping up in airports. Leading spas such as Canyon Ranch are teaming up with like-minded developers to create wellness lifestyle environments where people can live, shop and play. These comfortable, tranquil settings take the spa experience in new directions.

EVOLVE Change is on the way.

As money tightens, people start taking inventory of their lives, deciding what really matters. Their priorities change and retailers must evolve with them.

More and more, consumers are deciding where to shop based on retail ethics and a perception of social responsibility. They want to know what retailers and manufacturers are doing to make the world a better place. Green retailers and product lines are much in vogue. And retailers like American Apparel use corporate responsibility as a selling point.

But this evolutionary trend is most evident in food retailing. Locally sourced produce, organic products and other eco-friendly features resonate with today’s shoppers, who are willing to pay a premium for them. Free-trade, farm-to-fork and locally grown movements are taking root at groceries and restaurants across the country, and show no signs of slowing down. And smart retailers are responding with building practices – sustainable materials, efficient lighting, solar heating and cooling – that have the same social responsibility.

In any economy, retailers constantly re-evaluate their brand experience. With constrained budgets and consumers’ shift from accumulating goods to valuing the intangibles, retailers face a major adjustment. By offering a shopping environment designed for these Five E’s, retailers can strengthen more than their short-term earnings. They can build a strong, resonant brand – and it’s hard to put a price tag on that success.

Katie Sprague is a vp in the Los Angeles office of RTKL Associates Inc., directing the firm’s environments studio, which specializes in the design of brand-rich places and retail environments. Lori Mukoyama is an RTKL principal in Chicago, heading up the office’s retail and branded environments studio. 

Photography: Jeffrey Jacobs, Memphis, Tenn.