Monday 19 April 2010

Big isn’t always beautiful when implementing a roadside retail design project

When I was the project manager for Shell’s global petrol station re-imaging project in the 1990s one of my key tasks was to work with Shell Brazil where we had nearly four thousand Retail outlets. The Brazilians ran one of the most creative and energetic of Shell’s marketing businesses and they were always keen to embrace new opportunities to enhance their already strong competitive position. So when after a couple of year’s work we had codified the design standards in a comprehensive manual it was with eager anticipation that I flew to Rio de Janeiro to see how the company’s first re-imaged site looked.

I was not disappointed - it was a superb upgrade of a fine station situated in the lee of Corcovado hill in one of the city’s most prestigious districts. The opening was carried out with typical Brazilian style – it was carnival time and wonderfully well done. The following day I had a meeting with Shell Brazil’s retail management and top of my agenda was the implementation programme for their huge network. It transpired that so much energy had been put into the first site that no time at all had been allocated to creating a project management plan for the remaining nearly four thousand! We had to start from scratch to get something in place!

The point of this anecdote is that whereas it is a necessary condition for companies to be creative and have a sensitive feel for new design this right hand side of the brain activity has to be combined with left hand side of the brain organisation and planning – especially when the overall task is complex and extensive. Art and science need to be combined you might say. As we shall see big companies like Shell have a built-in advantage when implementing huge programmes – above all they can get economies of scale from bulk purchasing. But smaller companies can also achieve excellent results because they can be much more hands on a site by site basis and be more flexible in respect of materials and implementation methods. One of the best realisations of petrol station design projects I have seen was in the United Arab Emirates where the two main players across Dubai and the Northern Emirates, Emarat and Eppco, have only around 250 sites between them but they are all sites which are elegant and customer-focused manifestations of the two companies brands. Similarly one of the best implementations of the Shell “Retail Visual Identity” design I saw was in Hong Kong where even though Shell had less than one hundred sites, they not only adhered to the design standards authentically but also by using some innovative materials ideas – mostly locally sourced – kept their costs under control with a site by site approach.

The essential difference is between projects where size demands that they are carried out with a sophisticated project plan and hard-nosed bulk purchasing (like Brazil or Europe for Shell) and smaller scale operations where far greater flexibility in the practical aspects of implementation, like materials choice and sourcing and installation methodology, is desirable. Where these projects co-exist for one brand, usually an international brand with businesses in dozens of countries, then this aspect needs to be understood at any early stage in the design development. There is little point in a designer creating a design element that has to be mass produced in modern factories if some of the implementation areas will have to rely on lower tech and more labour-intensive fabrication methods. Similarly a design element that requires a high degree of hand manufacture or finishing would clearly be unsuitable in projects where tens of thousands of units have to be upgraded.

Even a company as large as Shell can permit and even encourage small scale signage (etc) production in certain markets. I remember seeing exceptionally high quality elements being made in, for example, The Philippines using local materials and highly labour-intensive fabrication methods. Compare this with say Japan and you realise that the challenge is to get the right balance between capital costs and labour costs. In sophisticated markets with a tradition of high tech manufacturing and relatively high labour costs, like Japan, then an upfront investment in scale production equipment is preferable. In less sophisticated economies with lower labour costs, like The Philippines, then a more “craft” based approach is desirable. So long as the end result meets the design standards, is durable and cost efficient then how you actually get there doesn’t matter that much.

The adage that “All Markets are Local” applies to most things in a marketing business – including to some extent procurement - the challenge is to make the right judgment about the “extent”. There is little point in exporting factory-built components around the world if some countries can achieve the same quality, at lower cost, using local suppliers and methods. On the other hand concentrating production to a relatively small number of suppliers in Europe proved, for Shell at any rate, to be advantageous both in respect of consistency of quality and cost – the economies of scale were considerable. A small and highly skilled team was set up by Shell in the mid 1990s to manage procurement across twenty-five countries in Europe and for more than 12,000 petrol stations. The key to the success of this project, which achieved cost savings of around 40% compared with original estimates and delivered exceptional quality components, was commitment from the top. Not only did the senior Shell management in Europe support the project but they also allocated very senior and experienced executives to run it. That decision ensured both highly competent management and, crucially, that the exercise would in the end have credibility with the top brass in the European operating companies. This did not come easily as there was then a tradition of local autonomy in Shell and in some cases country managers took delight in doing their own thing – even if the end results cost more and were of inferior quality. A strong dose of dirigisme from the centre was necessary to achieve “buy in”! One of the key early decisions in Europe was to divide the elements of the re-imaging programme into separate parts and to use industrial manufacturing methods, not necessarily by traditional signage companies, where appropriate. It was also decided not to allocate any of the components to just one supplier – the size of the project required this for both security of supply and logistical reasons.

A roadside retail re-imaging programme is one of the most significant strategic investments that any brand can make – but it is not to be undertaken lightly. As we have seen it is essential that elegant and customer-driven design solutions are, as far as possible, “future-proofed” in visual terms – we are not talking “fashion” here! But it is also essential that the implementational and economic aspects of the project are considered from the start. Prototyping should reveal design flaws which can be both aesthetic and practical – a design solution might be rejected in consumer research or it may turn out that a particular element just cannot be built at an acceptable price. Whether the project is on the huge scale of a multinational brand or is much smaller in scope, perhaps only in one country, communication between those who create the design and those who will have to build and install it should start almost on day one of the project.

Paddy Briggs
April 2010 © Minale Tattersfield

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