Environmental branding is a disciplined approach to interior design that aligns a three-dimensional space with the brand positioning. This marketing tool aims at expressing the brand's essence in showrooms, work areas, trade exhibits and any other customer-oriented spaces.
Like Molieíre's Monsieur Jourdain, who delivered prose without realizing it, many retailers have had years of experience with environmental branding before the concept fully crystallized. In particular, the luxury retail stores of Oxford Street, les Champs-Elysées, and Fifth Avenue have been precursors in the art of wrapping their affluent customers in the brand experience. Among them, toy store FAO Schwarz led the way, working its brand into the hearts and minds of children, followed by the Disney (DIS) Store, which displayed a full-scale Mickey Mouse and other magical characters to bring the brand to life.
In the affluent late 1990s, Ford Motor Company (FCJ) started to roll out a shopping mall concept of its brand portfolio: Ford, Lincoln, Mercury, Mazda and Jaguar (later to be joined by Volvo and Land Rover). Each car brand was to have its distinctive showroom, with a combination of attributes aligned with the positioning strategy. This approach would have increased the differentiation between models that came from the same plants, e.g., Taurus and Sable, which were both produced on the same assembly line in Chicago.
Land Rover was a precursor of environmental branding even before Ford Motor took over the company. For instance, these British SUVs were typically displayed on podiums shaped like giant wooden compasses, underscoring the off-road, but nonetheless conservative, attitude of the brand. Also, in many showrooms, canoes and fishing and hunting gear would further convey an active outdoor lifestyle. Outside, a flashy test course was designed to emphasize the many wilderness-friendly characteristics of the products, and reinforce the brand attributes. Thus the retail space was fully aligned with the message conveyed through the product design, TV commercials, ads, website, and direct mailing. Environmental, or retail, branding was part of a 360-degree strategy.
Environmental branding is powerful in many ways. It is a three-dimensional experience, which considerably adds to the rather limited expression of the brand on a flat screen. In a retail store, there is no channel surfing and no TiVo (a digital video recorder that allows skipping television commercials at the touch of a button). On Chicago's North Michigan Avenue, Nike (NKE) built the most extravagant shoe store since the markets of Istanbul. It has the height, darkness and grandeur of a gothic cathedral. To capitalize on the theme, the television commercials, website and merchandising of Nike depicted the same gothic atmosphere.
There is no other situation in which a brand manager has such a level of control over the brand experience. Moreover, the brand experience can be delivered with all its complexity and nuances. Environmental branding can literally delight the five senses and provide memorable experiences. Barnes & Noble bookstores are weekend destinations in the US. Part of the success is in the training of personnel, which is knowledgeable and respects the readers that patronize the store. More importantly, however, visitors are welcomed with the aroma of freshly brewed coffee. Thus, even the sense of smell can quite easily be touched with the smart use of aromatic brews and leather chairs.
Environmental branding is a combination of mood, look, and sensory perception created by the environment and the front-line personnel. It is complementary to product design, advertising, merchandising, web design, PR and generally everything that the customer can see, touch or perceive.
Environmental branding involves professionals from different disciplines, such as interior designers, architects, and hiring and training consultants. The management of the project should however remain under the authority of the brand manager, who will keep the team focused on capturing the positioning three-dimensionally...and within budget.
Branding a space does not have to be expensive. Actually, it can often fit within the budget constraints of an existing construction or remodeling project. A reasonable increase to a conventional budget can even trigger a disproportional increase of revenues and profitability, as many movie theaters have recently experienced. Whereas margins on movie tickets are slim, environmental branding allows movie theaters to retain their audience, who then spend more on drinks, food and video games.
The challenging issue is truly for the creatives to optimize the impact of the design within the set budget. This is the time when the client is exposed to actual samples of material -- such as fabrics, stones, metals, and colors -- that give a more realistic perception of the textures and surfaces. The review of the best possible materials, lighting systems, and architectural structures can become a long and grinding process, but it is worth it. For example, the creative use of colored glass (in sunny climates) can compensate for the lack of expensive lighting systems; brushed or blackened steel can be as striking as more noble metals; and video projectors can animate the dullest walls and panels like magic.
Most people have a hard time visualizing something that does not yet exist. An environmental branding project therefore makes extensive use of visual aids such as renderings to help the client -- at all levels -- and the vendors achieve consensus around a new design. These renderings can be paintings or Photoshopped pictures, capturing on flat boards the creative vision of the designers. They will be particularly useful in market research, to test customers' responses to specific design concepts.
Environmental design does not stop at the bricks and mortar. It should strive to delight the five senses. For instance, high-end department store Nordstrom (JWN) employs a pianist in its environmental branding concept in the US. The live performance of classical pieces reinforces the high-end positioning of the store, while differentiating it from competition that plays conventional Muzak over speakers. Nordstrom also understands the importance of involving the personnel in the environmental branding concept. The Seattle-based company focuses attention on the recruiting, training, and compensation plan of its front-line personnel. This focus is reflected in the attitude of staff, which does not appear to be driven by bonuses. To the contrary, the salespeople are open, pro-active, helpful and caring, to the point where they regularly follow up with a thoughtful "Thank you" note in the mail.
This kind of white-glove treatment is to be expected in a luxury segment. Nevertheless, Ikea demonstrates that low end does not imply a poor buying experience. The Swedish company takes full advantage of the three-dimensional nature of its products to furnish its stores. Grounded in Scandinavian culture, Ikea is casual and respectful of the visitor in the same way as Barnes & Noble. Similar to the American bookstore, Ikea offers coffee -- sometimes free of charge to enthusiasts who show up before opening hours -- and even meals. Everything is done to keep entire families on the premises as long as possible, until the purchasing decisions are final. At a time of high customer expectations, which is intensifying dramatically in service industries, many could gain inspiration from this soft approach to salesmanship.
The softness is constantly delivered thanks to well-measured customer-control processes. Staples (SPLS) and Home Depot (HD), specialty stores in the office supply and DIY fields, respectively, have both paid particular attention to processes that control the waiting time at checkout. For Staples, it goes to the heart of the brand's DNA, captured in the trademarked slogan "That was easy." Belgian supermarket GB addresses the same issue from a different angle: Video screens hang over checkouts to entertain customers while waiting.
Unfortunately, these processes are too often afterthoughts in environmental branding projects. As a result, unacceptable lines can be seen at service counters, check-outs, women's restrooms, and elevators. Those issues are not always easy to fix after the grand opening, and can surreptitiously affect the brand image. Effective processes can become key differentiating elements when they are fully embraced. In the 1990s, many banks looked like post offices, and vice versa. This is no more. Dialogue service is widely accepted as the way of doing face-to-face business. In this concept, the company representative and the customer sit at the same level around a table, with the computer screen visible by both parties; sometimes even a cup of coffee is served. This marketing technique reduces the tension that can arise from seemingly opposing sides dealing with each other, fostering a more service-oriented retail environment. With mundane tasks now performed online or through ATMs (automatic teller machines), many banks are rolling out "Dialogue Banking," and the French postal service, La Poste, has already adopted several aspects of it.
Finally, how can we reasonably delight customers if employee turnover is high and morale is low? Many professional service firms have long paid attention to the appearance of their premises with the client visit in mind. Increasingly, all kinds of corporations consider environmental branding as an additional tool to enhance employee loyalty and retention and increase recruitment reach, particularly among young women. (Graduate schools in the US show 30 to 50 percent enrollment of female students.) An increasing number of companies, such as Ikea and New York Sports Club, offer daycare for customers and/or employees. Market research shows that the physical presence of a daycare center appeals to both men and women, since it demonstrates a set of values.
Environmental branding is not altruistic. Its goal is to increase profitability, indirectly through better brand awareness and differentiation, or directly through increased and repeated traffic. Some, such as Nike (with Niketown), Samsung (on the Champs-Elysées), and most fashion designers, have chosen the path of flagship stores to implement the concept. Others, such as Ikea, Victoria's Secret, McDonald's (MCD) and Ritz-Carlton, prefer to roll out the same core concept to create consistency at every contact point with the customer. It is a powerful opportunity to welcome customers with hospitality, and wrap them in a total brand experience.