A new kind of retail

A new kind of retail
Service companies branch out into the retail sector with exciting new bricks-and-mortar concepts

By Jessie Bove, Managing Editor
August 01, 2009

Highmark Direct

Studiohio Inc.

A trip to the mall is not what it used to be. Today’s shoppers are just as likely to encounter a storefront for a shoe store as one for a cable TV company—or an energy company, homebuilder, dotcom or travel services provider, for that matter. A multitude of service companies have taken the plunge into bricks-and-mortar retail to manifest their brands, opening up retail outposts and communicating their messages in new and compelling ways.

“Organizations that are service-oriented are finally approaching the concept that they don’t necessarily just have consumers, but they actually have shoppers, too,” says Aaron Spiess, president of Columbus, Ohio-based Big Red Rooster (BRR), which has recently designed environments for alternative retail, including stores for AAA and Highmark Inc. “In each of these service companies, it’s really about getting to the strategic role of retail in the overarching portfolio of distribution to their consumers and their shoppers.”

The challenges in an alternative retail project are many, from re-training associates on how to engage shoppers to integrating technology. The main challenge, however, remains communicating with shoppers, who have grown accustomed to interacting with the brand in a one-dimensional way, explains Diane Rambo, executive vice president, creative services, BRR.

However, the objectives of alternative retail are the same as any other retail store—”to make the cash register ring,” Rambo says. “The nuance is that the space is dedicated to selling services rather than consumer products,” she adds. “Developed with specific operational intent, they are the physical embodiment of the service offering, providing an opportunity to interact with the offering the way no Web site or call center can.”

To engage consumers on their own terms, Pittsburgh-based health insurance provider Highmark Inc., an independent licensee of the Blue Cross Blue Shield Association, launched two retail stores in Pennsylvania, called Highmark Direct. The stores, which debuted in March, aim to attract the increasing amount of consumers faced with financial and decision-making responsibility for their health insurance. “We know that health insurance can be confusing at times and wanted to provide a place [for people] to come for answers,” says Matt Fiddler, director, retail marketing, Highmark. “Highmark Direct provides consumers with the appropriate tools and information to help them make well-informed decisions to manage their health care.”

Highmark viewed retail development as an opportunity to align their culture and capabilities with the growing demands of the consumer-driven market, Rambo notes. “The vision was to start a fresh conversation with shoppers and eliminate barriers to purchase by positioning Highmark as proactive in protecting wellness and longevity, and presenting the offer with transparency and clarity,” Rambo notes. “The new retail space creates a welcoming and supportive environment that puts people at ease.”

Throughout the Highmark Direct space, iconic visuals of apples, in both prop and graphic form, connote healthier living, Rambo says. “The use of natural materials and a mural of the sky create an optimistic, uplifting environment,” she adds.

Each section of the store is designed to serve a particular purpose, such as service, sales, health information exploration and consultation. The design has improved sales penetration significantly for Highmark, a brand once perceived by consumers as too expensive, Rambo adds.

Credit card company American Express also has delved into the retail arena, recently opening its flagship Travel Service Office in Cambridge, Mass. Located in historic Harvard Square, the Travel Service Office features a lounge-
inspired environment offering visitors new travel services, including a Cardmember lounge, concierge services, virtual technology, special travel offers and events, as well as service from travel agents.

“The new Cambridge office is the travel agency of the future, a destination that’s welcoming, interactive and encourages visitors to linger and discover all the features and services that American Express Travel offers,” said Ellen Bettridge, vice president of the American Express Retail Travel Network, in a statement. “Our goal is to make the vacation planning and exploration process easy, convenient and meaningful, and to invite consumers who haven’t used a travel agent before to discover the benefits.”

Another company hoping to better showcase its services to consumers is AAA, a club whose robust knowledge base was virtually unknown to its members. In fact, from a brand study standpoint, a large percentage of consumers only saw AAA as a towing service, Spiess comments. To convey the full breadth of offer in a physical space, BRR designed a flexible and modular retail concept—the AAA Explore Store—for Ohio AAA, which has been licensed and adapted for rollout in several other states.

AAA’s existing locations were primarily offices, which left members feeling as though they were intruding or interrupting the people who worked there, as opposed to feeling engaged in the exciting experience of travel planning, Rambo says. “Changing that dynamic is the core challenge of every design for alternative retail projects,” she notes. “The shift in mindset from an office to service retailer requires extensive process mapping to make the experience better for both shoppers and associates.”

To make the transformation to retail, the BRR design team created opportunities to showcase the depth of offerings to members. “The wealth of travel maps, tour books and other valuable resources that historically were hidden away in file cabinets, were prominently displayed and organized for shoppers to freely access,” Rambo describes. “In the new design, shoppers are exposed to tour packages, local event calendars and the many financial and emergency auto services that AAA provides.”

The AAA Explore Store leverages the reception counter and red brand wall as consistent anchors that greet visitors into the space, Rambo explains. A concierge assesses each visitor’s individual needs and directs them to the appropriate service. Members seeking travel or other program information are invited to explore the open floorplan of informational kiosks, wall displays of local and worldwide travel ideas/packages, and a display of maps, tour books and other resources. While the space is organized to help visitors navigate their journey around the store, staff members are also integrated into the space to offer guidance.
The end result is a space that reinforces the brand’s primary equities to maintain or improve renewal rates and attract new members, Rambo says.

“Ultimately, design for alternative retail is less about design than process reinvention,” Rambo notes. “It’s more about defining the ideal customer journey, and then designing an environment for that journey to come to life.”