The in-store environment

How does in-store environment affect consumer decision making?

The in-store environment

The in-store environment plays a crucial role in consumer decision-making. Indeed, many studies have found that more than 50% of purchase decisions are not pre-planned and in fact occur in-store1. Therefore, retailers have more power to influence customer behaviour than they might ever have thought.

The first dimension to consider is layout, which has been researched using techniques such as eye tracking and CCTV analysis. One study found that the number of aisles a customer shopped in was the biggest influencer of in-store decision-making. Hence simply encouraging customers to visit more areas of the store could lead to an increase in purchases.

Taking the customer on a physical journey

There are many ways to achieve this; careful positioning of stairs or escalators at opposite ends of the store, placing major brands in the middle of aisles to ensure maximum distance from either end, putting essential items at the back of the store, or using lines on the floor to guide the customer. A retailer that has mastered this technique is IKEA. Stores provide customers with a set path to walk, guaranteeing the whole store is exposed to them. Best practice for retailers, is to design a store layout that gives consumers access to relevant information, and aids them in their decision making2.

Nevertheless, retailers must ensure customers are not conscious of the fact that they’re being prompted to take a specific route through the store. For example, promotions where customers buy an item and get 50% off another in a different aisle are simply an inconvenience, and make them aware they’re being forced to spend more time walking around the store. This prompts a negative attitude towards the store, which will have an adverse impact on sales.

Involving the senses

Sensory factors are another key feature of the in-store environment, as they can stimulate powerful responses from the customer. For example, research has found that evaluation of products is enhanced when paired with fragrances. Smells are processed in the same area of the brain - the limbic system - that is responsible for emotion and memory processing, which explains their dominant effect on behaviour.

One studydemonstrated this by presenting a pair of Nike trainers in either a floral-scented room or an unscented room, and found that people were willing to pay up to $10 more for the same trainers in the scented room! This shows that pleasant scents improve opinions of stores and lead to perceptions of higher quality products. That in turn increases the subjective value of products, resulting in a willingness to spend more.

However, for products that normally have a familiar odour, such as the lemon scent of a kitchen cleaner, the pleasant odour will only have a positive effect if the smell is congruent with the product. For instance, pairing a cleaning product with the smell of coffee will lead to negative evaluations of the product, no matter how pleasant that customer finds the scent of coffee, as it’s unnatural in this case.

Further sensory factors include lighting and music, which act to create a mood that again helps the customer develop a positive attitude towards the store and products. However it’s quite difficult to create a mood that will appeal to everyone. Parents visiting Hollister’s stores have complained of tripping over and even losing their children due to the loud music and lack of lighting. 

In Hollister’s case, the target market is young teenagers who are likely to favour the club-like atmosphere the store exudes. Therefore the music and lighting must be in line with brand’s values and customer demographics. One study4 found that shoppers bought more expensive goods in a wine store when classical music was played, showing the importance of aligning sensory features with the product’s characteristics.

Appealing to the eyes

Additionally, lighting can increase the time a customer spends in the store, with warm white light giving off a sense of security, encouraging customers to stay for longer.  Nevertheless, bright light is not always the answer when it comes to retail. In addition to influencing how we feel, lighting has the ability to draw our attention to products that otherwise may have gone unnoticed. This is why contrasts are crucial.

By using accent lighting, retailers can highlight promotions or specific products. In the same way, shelf position plays a significant role in attracting customer attention. For instance, one studyshowed that placing potato crisps on the middle shelf led to more sales than when the same crisps were placed on the bottom or top shelf. This is because the products on the middle shelf were placed at eye level, making it easier for the customer to find.

Presenting a friendly face

Staff are another important aspect of the in-store environment, of course.

Customers are likely to have a more satisfying shopping experience when a member of staff offers help without being asked for it, so all staff should aim to be proactive. Likewise, studies have found that simply bringing items to a customer’s attention through suggestion can be an effective way to encourage purchases. One study conducted in a pet shop, found that when staff prompted customers by asking “Would you like any pet accessories with that?” sales increased fourfold, demonstrating the power of saliency and  customer service6 in purchasing decisions.

In the last decade a multi-channel approach to shopping has been born, in which both online and bricks-and-mortar stores combine to enrich the shopping experience. For example, it is now common to see staff equipped with iPads, digital catalogues, access to online reviews and even mirrors that can display digital content in stores. Technology enables the customer to gather more information about products, which both empowers and engages them, resulting in a positive influence on sales.

Technology in support of expertise

However technology should not be viewed as a substitute for staff knowledge. Staff must be respected and seen as a trustworthy source if they are to have any power to persuade. Being viewed as expert or specialist is one way to gain trust, so staff must think of technology as an aid rather than a replacement for deep product knowledge.                     

The role of environmental settings in a store, such as staff interactions, sensory factors and store layout can all affect a consumer’s mood and mental state. This in turn impacts on their behaviour, which, in this context means buying decisions.

1 Vohs, Kathleen D., and Ronald J. Faber. "Spent resources: Self-regulatory resource availability affects impulse buying." Journal of consumer research 33, no. 4 (2007): 537-547.

Mohan, Geetha, Bharadhwaj Sivakumaran, and Piyush Sharma. "Impact of store environment on impulse buying behavior." European Journal of Marketing 47, no. 10 (2013): 1711-1732.

Hirsch, Alan R. "Preliminary results of olfaction Nike study." note dated November 16 (1990).

Areni, Charles S., and David Kim. "The influence of background music on shopping behavior: classical versus top-forty music in a wine store." NA-Advances in Consumer Research Volume 20 (1993).

Sigurdsson, Valdimar, Hugi Saevarsson, and Gordon Foxall. "Brand placement and consumer choice: an in‐store experiment." Journal of Applied Behavior Analysis 42, no. 3 (2009): 741-745.

Bitner, Mary Jo. "Evaluating service encounters: the effects of physical surroundings and employee responses." the Journal of Marketing (1990): 69-82.