Research

Designers recognize that a store is a collection of many different customer zones and maximize each zone's merchandising potential.

Consider Specific Zone Strategies for Targeted Packaging and Merchandising

By Howland Blackiston and Jacqueline DeLise

The truth is, most merchandising strategies aren't strategic. That's because many retail stores, drug stores, supermarkets, and restaurants tend to think "holistically" about their environments. They think: one space, one strategy. They develop broad communications and merchandising strategies that are designed to be used throughout their stores.

Here, there, and everywhere. Banners, posters, danglers, wobblers...you name it. Up they go throughout the store, and then they sit back and hope for the best. That's a surefire way to sub-optimize your merchandising strategies.

King-Casey repositioned the Adams Super Foods brand as the new Adams Hometown Market, targeted to consumers who demand quality products, attentive service, convenience, and the atmosphere of a neighborhood store. The new store concept features a robust center store area and expanded zones for bakery, deli, meat, produce, and home meal replacement.

Start thinking 'zones'

The most successful restaurants have recognized that their stores are not just big branded boxes. Each store is actually a collection of many individual "customer operating zones." Customers behave differently in each zone, and their needs and expectations are different. Each of these unique zones is right for one merchandising strategy, and dead wrong for others. Designers can take lessons learned here and apply them to packaging and merchandising projects.

By identifying these zones and understanding how customers behave in each zone, we can craft zone-specific communications, merchandising, and packaging strategies that are sharply responsive to how customers use these zones. This makes the customer experience faster, easier, and more enjoyable while distinguishing your brand and maximizing business results. The concept of developing communications strategies based on "customer operating zones" was pioneered by King-Casey decades ago. This blend of science and creativity is used to help clients manage the entire customer experience.

The acronym COZI® (Customer Operating Zone Improvement) captures the methodology used here, and the multistep process is called the COZI Strategic Discipline. The first step is Zone Assessment. Understand your environment and your customers. Begin by identifying all of the COZI zones within your store. What are your "zones of opportunity?" Using a QSR or Fast Casual restaurant as an example, these zones might typically include: Entry Zone; Line-Up Zone; Order Zone; Pay Zone; Beverage Zone; Pick-Up Zone; Dine-In Zone; Exit Zone.

Note how customers use and interact with these zones. Measure the time they spend in each zone. For each zone probe to discover customer needs, expectations, attitudes, and behavior. What problems do they encounter in these zones? Do they understand what's being communicated to them? Here's where objective focus groups, interviews and video tracking studies can be very helpful.

Now walk around the store and do an assessment of your current merchandising and communications. Are your message strategies appropriate for the zones they call home? Do you have the right message for the right zone? How can messages in this zone be optimized to drive sales?

Devising a zone strategy

Zone strategy development consists of three elements: 1) What is it that you want to achieve; 2) What is it that you want to say; and 3) How you are going to say it? What you want to achieve is the Business Objective. Begin by identifying the business strategy for each of the zones. What is it that you hope to achieve in this zone? How will you measure improvement? Note that your business objectives may vary from zone to zone.

What you want to say is the Message Content. What is it that you must communicate to achieve your business objectives for this zone? The message should be responsive to how customers use a particular zone. You don't want a long and detailed message in an entry zone, as research tells us that customers only take two to three seconds to view a message there.

How you are going to say the message is the Physical Element. What is the physical nature of communications in this zone that will best communicate your message? What communication medium would work best in this zone?

The last step in the zone strategy process is Design Development—the creation of graphics, images, typography, branding, etc. This is what the communication will look like. It's tempting to jump straight to this step. Many well-meaning design firms do. But don't fall into this trap. Design should be driven by thoughtful analysis and strategy development. Attractive images do not necessarily result in attractive business improvement.

With an understanding of "zones," the revitalized Rollerblade packaging and merchandising system helps customers select the product that meets their specific needs in a friendly, comfortable environment. Packaging was designed specifically to create a compelling visual impression and excitement for the product.

Implementing a zone strategy

By now you have identified your business objectives, you know what you want to say, and you know how you are going to say it. During this step you fine tune and finalize your zone merchandising elements. By all means evaluate the concepts and get team consensus. Keep things objective by using focus groups to validate the concepts with customers, lapsed customers, and non-customers. Make modifications as necessary and create digital artwork for production. Select several stores that will serve as pilots for the new initiative. Monitor results during the test period. Measure sales increases, customer flow, throughput, and return on investment (ROI). The success of these tests convinces other franchisees that this is worth the time, effort, and investment.

The final stage is Strategy Improvement and Roll-Out. Continue to monitor key measures of success to identify opportunities for improvement. What's working? What's not? Why? Make tweaks to optimize business results. Feed these "lessons learned" back into the planning process (the next round of efforts will benefit from what you learned). Use research to find out from customers what's working and what's not. Finally, roll out your enhanced strategy to other stores in the system.

COZI Absolutes

Sounds simple? It's just common sense, you say? You're right! But it's amazing how many organizations (even the really smart ones) overlook the value of developing strategies based on "customer operating zone improvement." It's time to start thinking in terms of zones. It all starts with a thoughtful "assessment," zone by zone, of what you are doing now.

From our experience with hundreds of COZI initiatives, we can identify the key things that you should absolutely do:

• Avoid "holistic" merchandising and packaging strategies by recognizing that a store is a collection of many different customer zones.
• Understand exactly how customers make use of each zone. Customer research helps objectively evaluate customer behavior and identify opportunities for improvement.
• Develop communications strategies that are responsive to each of these zones.
• Develop strategies that are designed to achieve specific business objectives and are responsive to customers' behavior in these zones.
• Develop measures of success and monitor results. Measures will help determine ROI.
• Based on results, enhance your strategies to continually improve outcomes and customer satisfaction.