design:retail - September 2015 - (Page 38)

038 shopping with paco The "P" Word PACO UNDERHILL CEO & FOUNDER ENVIROSELL T HIS MAGAZINE IS filled with lovely images. Behind each picture is a legacy of study and talent, hard work and diligence. The commercial design world has made great strides in the past decade. Can you remember (not that long ago) when a remarkable number of stores with prize-winning designs were closed just a year after opening? The fact that the industry liked something, and the public didn't, was our greatest challenge. The last recession-paired with the explosion of e-commerce-has fostered fundamental changes in how design is brought to life. I like to call it the meeting of art and science. Almost every major design project has a research component. Strategy work is a major part of retail design as we process information. My old friend Faith Popcorn says, "If we know the future, we can mine the past to find out how we can get there." Almost all of us working in retail services (whether offering design, fixtures, merchandising or research) would like to be seen as contributing to a merchant's victories. The key to our long-term compensation should be the results we engender. However, just as our evolution is happening, the businesses we serve are also changing. The ugliest word in contemporary retail design is "procurement." All across the retail world, a new guard dog is now sitting at the table with merchants and designers, controlling pricing, payment terms and often dictating suppliers. The guard dog's job is to lower costs, with no attention to the project's merit, quality or positive impact on the bottom line. Unless you are in the C-suite, everyone across the corporate structure is living with an (oftentimes) ill-tempered, design-ignorant and arbitrary guard dog. For many of us, a signed contract is only the start to negotiations. Eight years ago, contract terms promised payment in 30 days; SEPTEMBER 2015 DESIGNRETAILONLINE.COM today, payment for many accounts has gone to 60 or 90 days. Many of us are often asked for a 20 percent discount after a contract is signed, but before a purchase order is issued, which starts the payment clock. How many times have our clients insisted that work start immediately, but procurement delays a purchase order for 30 days or more? The answer is: more times than we can count over the past three years. A project may be finished before our first bill is even looked at. Small businesses seriously are suffering at this totally inappropriate and unprofessional practice that global conglomerates can get away with as they essentially "borrow" money from the little guys. Recourse is nearly impossible for many reasons, the most poignant being that the quality of our work has never been better-and we want these same clients to commission future projects. My design-industry colleagues and their retail design department clients bemoan the guard dog in the room. Work is directed to the lowest-cost provider regardless of past history. At 40,000 ft. up, we see the origins of procurement as a reaction to the explosive growth in the POP industry, and the bottom-line driven conglomerates. Below-the-line advertising has grown, as money is pulled out of print and broadcast media, and is reallocated. The POP industry historically gave away the creative to secure the order. The industry was subject to deals being made on the golf course. This lack of transparency hurt the industry and brought reverse auctions and other forms of cost controls. Another contributor has been the relentless process of engineering cost out of the supply chain that the goods merchants sell. With stagnant wages for more than a decade, the purchasing power of the middle class consumer has declined. In order to sell goods, we've had to make them ever cheaper. The cost cutting that has been directed at the supplier of goods and services to merchants and marketers should come as no surprise. But neither art nor science benefits; the ultimate losers are both the American consumer and the retail industry itself, which gets shoddy goods and shoddy work. Most of us learned in the last recession that our homes, cars, closets and bellies were too big, and we needed to downsize. We also learned that the cheapest product was often not a bargain, but a poor substitute. The changing nature of our industry is both complex and simple. Our troubled business practices, stemming from larger companies taking advantage of smaller, creative ones, force us to re-examine our laws and business strategies. They also force us to carefully choose with whom to work. It's time to procure our own terms. PACO UNDERHILL IS THE FOUNDER OF ENVIROSELL AND AUTHOR OF THE BOOKS "WHY WE BUY" AND "WHAT WOMEN WANT." HE SHARES HIS RETAIL AND CONSUMER INSIGHTS WITH DESIGN:RETAIL IN THIS BI-ISSUE COLUMN. Illustration by OJOGABONITOO/ISTOCK/THINKSTOCK http://www.DESIGNRETAILONLINE.COM

Table of Contents for the Digital Edition of design:retail - September 2015

design:retail - September 2015
Editor’s Note
Show Talk
On Trend
We Love This!
Designer Picks
Clicks & Mortar
How’d They Do That?
Have You Heard?
Shopper Insights
Shopping with Paco
2015 Portfolio Awards
Retail Design Luminaries
Retail Design Infl uencers
Retailer of the Year
Best Store Designs of the Year
Design Firms of the Year
Best Visual Merchandising Programs
Retail Superlatives

design:retail - September 2015