What’s derailing retail design consultants’ growth journey?
By Satarupa Chakraborty | January 29, 2019
The growth story of the Indian retail industry is hardly reflected in the performance of Indian retail design consultants. Is it because of lack of enough retail design consultants in the country who can offer end to end solutions? Or is it due to inadequate understanding of retail design as a holistic experience? VM&RD seeks to find some answers.
From disruptive brand deployment to clutter breaking storytelling, retail brands are leaving no stone unturned in sprucing up their brick-and-mortar presence. What’s more, brands from across a range of segments and categories are today joining the retail bandwagon in India, focused on crafting an impactful retail experience.
An industry body study shows that retail has emerged as one of the most dynamic industries in the country, reportedly accounting for over 10% of the country’s GDP and around 8% of the total employment. The report also says that while the overall retail market is expected to grow at 12 % per annum, modern trade would grow at 20 % per annum and traditional trade at 10 % .
Also, the rise in retail projects means better business for the retail design consultants in the country. As Mumbai-based retail designer Shravan Suthar, Principal Designer, Shravan Design Company, according to whom his 15-year old company has grown 100% over the last 7 years, explains, “Retailers who had stores spanning not more than 500-1000 sq ft are now going up to 5000 sq ft with ease. Therefore, there’s a clear increase in the number of square feet we are working with.”
This obviously means higher business volumes for retail design agencies and it would seem that all is hunky dory for the industry, with a robust eco-system of retail solution/service providers, all equally poised for growth, right? Wrong. The fact is that while there are many architectural agencies who are into retail design, there are very few consultants specializing in retail design as a complete solution in the industry. Also, while many of these consultants have made their way up the ladder to become the most sought-after names, their individual growth seems rather stunted, certainly not commensurate with the growth of Indian retail as a whole.
Understanding the crux of retail experience
It appears that these gaps are a reflection of larger issues, beginning with a lack of understanding of retail experience as a concept in itself. Now interestingly, even after brick-and-mortar made its glorious comeback, not many, particularly among the retailers, seem to have really cracked the essence of what a retail experience is all about or have spent enough resources to understand customer behavior.
Shyam Sunder, Co-founder of Four Dimensions Retail Design, says in this regard, “Though we are talking about retail experience being the paramount for retail success, many brands, even those investing in retail designers, have no clear idea about it. As they scale up their stores, they also end up constantly changing their retail designers, to suit their budget. What happens as a result is that they can’t achieve uniform ID across all stores. It’s important for brands to understand the objective of design so that there is collective benefit.”
As a result of inadequate understanding of retail experience, the whole eco system suffers, in particular the retail design consultancy business, as retailers do not feel the need to invest in a retail design consultancy firm for consistency of ID or design purpose.
Says Sanjay Agarwal, Founder, Future Research Design Company (FRDC), in this regard, “There’s an issue in understanding design in this country. We look at design from the aesthetic or luxury point of view, but often forget that design is ultimately a tool to solve problems. Therefore, the research methodology becomes very important for us even before proposing a design of a store. Now, in order to invest sufficient effort to do that, we often need longer duration and the lost time is never compensated. This often leads us to incur losses. I can only infer that there’s a severe need for understanding design at all levels.”
Dhiren Chheda, Founder, Mumbai-based Dhiren Chheda Associates, agrees, “Research even before design is the most crucial and challenging part. In addition to that, as a retail design firm, if you give special focus to timeline, the volume of your rollout goes down. Therefore, we cannot do more than 50 stores a year. In the latter case, brands go to several agencies to duplicate the design and there remains a chance of the soul of the IDs getting lost. Now, if the brand’s earnestness towards restoration of design ID and therefore the budget is conducive, we can take up fewer brands but can take care of complete rollout.”
Thus it’s the retail design consultant who again suffers, because when the project is done in piecemeal and not as a complete roll out, then the returns don’t justify the efforts and cost involved in it. And in the end, between tight time lines and lack of enough bandwidth to match the scale of store rollout plans, what gets lost is the core of retail experience – a right blend of physical design and intangible elements.
Seeking international expertise
So the challenges seem to lie in a vicious circle – retailers don’t focus on store design as a consistent long-term plan and therefore go to retail design firms for last minute store executions, which is time and pressure bound and offers no scope for creating unique design concepts. Since these projects do not monetarily sustain the design consultancy firms on a long term basis, they are constrained and unable to add more value to what they can offer to the retail clients. The high end organized retailers in the country thus end up going to international design consultants to meet their retail requirements. A look at any of these top retail entities shows that their designs were handled by international retail agencies -- ‘HD retail ID’ for Central was done by Blocher Blocher, Foodhall at Chanakya, Delhi by Paris-based Melherbe, Croma’s small format true blue omni channel ID by Chute Gardeman, Airtel’s phygital ID by London-based Eight Inc. The list goes on.
These are retailers who pay Rs 100 lakh plus as design consultation fee and in some cases even go up to Rs 200 lakhs. So here is the other side to the issue, which is the perspective of these high-end retailers according to which, design consultants from the West come with end-to-end solution comprising graphic design, brand communication, the whole works, while India’s top retail design consultants are more of interior designers. So while Indian retail design consultancy firms have their own reasons as to why they are not able to offer complete design solutions, their top end retail clients seem to have a different take.
Need for infrastructural investment
But as stated above, retail designers need to be assured of consistent revenues to be able to build the infrastructure that can help them cater to their top end clients. According to industry sources, no top agency is achieving more than Rs 5 crore annual turnover solely from concept design. This is unlike the international scene where many retail agencies sustain themselves solely on concept design work and stay away from rollout jobs. Indian retail agencies on the other hand are forced to rely on store roll-outs for their business volumes. As Shyam of Four Dimension says, “We are doing 600 stores a year across 47 brands. I won’t say that we have not grown. But let me tell you, our sole concept design revenue has grown marginally. 55% of our total turnover is still achieved from rollout, while the rest comes from concept design. And, we have been in business for the last 18 years. Ideally we should have grown equally in both the verticals but pure-play concept design fees are too meagre to sustain the business. ”
This again is a reflection of larger issues such as insufficient focus given to store design as long term initiative by retail brands. So the crux of it is that if retailers can look at design as something that needs separate investments in terms of expertise and planning and hire retail design consultants as partners who can offer concepts and not just do store rollouts, then it would lift the whole industry. It would give the retail design consultancy firms the assurance of long term revenues which can help them build infrastructure, talent and research capability to offer more to their clients, including concepts and end to end design solutions.
The way ahead
Of course this is not to say that the design consultancy firms have to wait for the retailers to change their approach. In fact the good news is that a few retail design consultants are already investing resources in research and strategy before getting down to designing the stores. As they point out, Indian customer demography is unique, which only Indian retail agencies can understand and translate into a workable design solution for retailers. But the need is for more such research backed retail design strategies and for retailers to understand and acknowledge this.
The fact is that a retail unit or a store is more than just a spectacular space. And this is something that all stakeholders need to clearly focus on – both the retail brands and the retail designers. This also means requiring the right kind of talent, because retail design falls somewhere between pure art and pure science. So the need is for expertise that understands it from both these perspectives. But while retail designers are trained and honed on job, there is no formal training imparted to them and this is another issue. As Ashateet Saran of Chennai-based Saran Associates, says ruefully, “There’s no proper course, nothing even remotely close to a training program that young retail design aspirants can opt for and get industry-ready. What’s more disappointing is that pure-play architecture is often preferred over design.”
Indeed, a few leading design institutes have started offering courses in retail design, but the course content is often not on par with contemporary and global trends. So clearly there is a big need for cutting edge retail design training, among other factors.
Well, the sooner these industry must-have’s are in place – retailer acceptance of Indian design consultancy as a necessity for a good store experience and better profitability for retail design consultancy firms so that they can invest in research capability, infrastructure and industry-ready talent -- the better. After all, world over retail behemoths have re-strategized their store size, space, merchandising and the overall design of retailing. And for Indian retail to keep pace with these trends would mean a strong retail design consultancy industry which can sustain itself on pure play design. This means a collaborative strategy between both the retail brand and the retail designer for delivering a complete design solution – one that is tuned to customer behaviour and matches the need of the hour.