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THE SIGNAGE FOUNDATION |
Germantown, TN Study
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Section 3:
Germantown, Tennessee Pier 1 Imports Store
Before Pier 1 Imports decided to locate a new store in Germantown, careful market research was gathered within the trade area. Pier 1 Imports' overall marketing strategy is to locate in a shopping center and to work within the shopping center as an anchor tenant. In contrast, stores such as Levitz and Toys-R-Us, both of which are giant home-furnishing operations, use a much larger retail area and do not attempt to promote a shopping center environment. Our stores are smaller, 9,000-10,000 square feet, and we prefer to operate as an anchor tenant and interact within other forms of compatible retailing. People who come to Pier 1 to shop will typically walk through the shopping center. Such an operation is ideal for a city such as Germantown to promote because we can increase sales for other retailers simply because of our location.
Sales projections were analyzed and projections made based on Pier 1's past experience with first year operating figures of other Pier 1 stores previously opened in comparable shopping centers.
The Trade Area Analysis map on the following page shows that well over 64% of Pier 1 Imports Germantown store business comes from the Germantown area. This fact is important. Since we draw most of our customers from Germantown itself, Pier 1 Imports is a positive contributing economic factor to the city. If we do not have adequate signage to effectively identify our store, revenues will be lost to competing areas in other cities where shoppers can find the store they are looking for or can easily identify a retail location and stop by on impulse.
If shoppers leave Germantown, the city will may need to zone more retail space in attempt to get the business back. In Germantown 2004 - A Vision of the Future, it is stated that the land use percentages should remain stable. The city at some point may need to increase the 4% commercial/retail land use percentage to compensate for business and tax revenue losses related to lost signage. By minimizing necessary accessory uses such as signage, commercial/retail sites may not function at or close to their maximum capacity.
The illustration of Pier 1's Germantown store noted in the Appendix shows that currently there is only one wall sign on the store. It also shows that the existing sign is only readable from one direction although there are both east and west lanes of major arterial traffic. If a customer does not know exactly where they are going and they are traveling in a easterly direction on Poplar Avenue, they will not be able to identify Pier 1 Imports store through signage.
Market Development Associates recently completed a survey of Pier 1 Imports' customers to get test reactions to a proposed additional sign on the west side of the Pier 1 Imports store. One respondent who was not from the area commented that "...We passed by and saw the store earlier and on the way back we wanted to stop and went right by it."
For the customer who has an intention to stop during particular origination/destination trip, but could not find the store due to signage, consider the following example. A number of years ago Holiday Inn determined that 25% of the customers with reservations would not turn around if they missed the approaches to the motel/hotel. The user just proceeds on to the next available alternative. Likewise, Pier 1 is in the position of having well over 50% of customers approach its site on the blind side.
Retailing falls into two broad categories: impulse or destination-oriented. To attract the customer who has never been to your store and is not specifically seeking out the store, one must place their business in such a way that consumers pass the establishment on their route to seek other goods or services. If the location and timing of the business are in the shopping pattern of the consumer, it will meet an impulse need. We are not creating a demand. The demand is already there and the location is placed to meet that demand.[1]
If you put a fast food restaurant along a busy street and you create signage, entrances and exits and parking, you hope to have a certain percentage of customers who will stop for the first time because they see the restaurant. It is a matter of having a business at the right place, at the right time. While you will have repeat customers frequenting the restaurant, it is also critical to get the impulse customer to stop.
Destination oriented shopping is somewhat different. We know that we will not get a daily shopping or breaking at our establishment. With the extreme example in a leisure/pleasure oriented travel agency in a shopping center, the owners can expect their customers to stop by one to two times per year. If the good, product, or service is not visible so your customers are anticipating your name, you will miss that occasional trip planned by your customers.
Our Germantown store is different from a travel agency; we anticipate approximately 4-6 major visits per year from each of our customers. We also anticipate that customers will come monthly to browse through the merchandise. Since the items that are purchased are of a substantial nature (a typical purchase approximately $35), we must make sure that the customer thinks of our store when they have a demand for a product we sell.
Pier 1 is more destination oriented than a fast food chain such as McDonald's or Burger King. In Germantown, we must constantly work to get people to come in and look at our merchandise. When they stop, they will also shop at other places in the same shopping center and perhaps on impulse will purchase from other stores. Also because of the nature of our clients' shopping trips, we are not as dependent on the visual communication component of a retail site as the impulse oriented shopping trips. Put another way, Pier 1 Imports can survive without unique building designs (such as McDonalds, Pizza Hut, Blockbuster Video, etc.), specialized site layout and landscaping. If however, customers cannot find the location, we estimate well over 25% will not use the street address or landmark systems.
But as with the retailer that is dominated by impulse shopping behavior, no retail establishment will survive without a location that is identifiable and can be integrated into its corporate identification system. Clearly when the store's identification is not usable from the main point of entry, business losses are inevitable.
Recent research indicates that the constant exposure to advertising has caused the memory of the average American consumer to decrease dramatically. From 1986 to 1990, television viewer's memory for commercials slipped from 64% to 48%. This is due, in part, to the constant bombardment of media advertising that we are exposed to on a daily basis. 3,000 marketing messages a day besiege the average U.S. adult. In this noisy environment it is nearly impossible to get any one pitch noticed or remembered. Even though we are spending more on advertising annually, the memory for these ads is declining dramatically. Our request for variance is an attempt to erect a reinforcement device to complement our extensive local advertising to offset some of this memory loss.
We are suggesting that our sign will function as a reinforcement device for the other forms of advertising we utilize. Signage is critical to enforce our media campaign. We currently spend nearly $124,000 annually in the Germantown SMSA area for various local advertising media and this is incorporated into a $24,000,000 annual national advertising campaign. It is not economically feasible to spend money on local media advertising and not realize a return on it. Without the reinforcement offered by our logo signage, we will not be able to reinforce our message to the consumer, thereby extending their memory for our products and service.
Pier 1 is not attempting use a commercial signage program to fulfill the role of alternate forms of advertising such as newspaper, radio, television, or marketing advertisements. Pier 1 uses an overall marketing and advertising strategy that includes signage as an integral part of its corporate identification and as a vehicle to remind consumers of its presence.
In order to gain a market share for the products we sell, we develop our advertising strategy so that when people decide they wish to purchase a particular good or service, they think of a particular retailer. It is important to remember that retail is a derived demand and that in the short run there is only going to be a certain demand. If part of that demand is no longer filled by one business and the consumer moves to another retailer, it is not axiomatic that the market is going to increase and you can obtain the same share back by simply advertising. Our company recognizes that if we lose market share, we lose business. In retailing, lost business translates into lost profits.
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