How Shell Improved Its Margins By 5% With A New Design

Shell Shopfitting RefitUK retail designer/shopfitter Craig Phillipson was surely being modest when he described his craft as “the forgotten bastard-child of design” during the second day of London’s Retail Design Expo 2016. Even if he was being hyperbolic, his statement reflects the way shopfitting is perceived in this day and age, as well as the errors in that thinking.

Phillipson was intimately involved in a major, chain-wide overhaul of the gas-powered monolith, utilizing extensive customer data and research. Phillipson interpreted the data and insights, via decades of retail design experience, in an innovative symbiosis of technology, social sciences, and solid, traditional shopfitting.

According to Phillipson, ““People’s active peripheral vision is 60 degrees for men and 65 degrees for women. Shoppers want to turn to see things at no more than 45 degrees, and they also only buy when a product is 1.2 metres away,” he explained, in a torrent of useful information.

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“Using these principles, stores were re-pointed in such a way that we got incredible results. Food category sales – one of the main product types we wanted to increase – improved by 49.2%; total shop sales increased by 15.1%; while shop margins improved by 19% because customers were buying more higher margin items.”

Phillipson assisted Shell in three different formats, designed to capture three disparate audiences. The first was geared towards what Phillipson described as “transient visitors” – high-mileage drivers, for whom food was the primary concern. The second is closer to the modern convenience store, being customized for local shoppers, focusing on snacks and alcoholic beverages. The final category was solely for people getting gas, which put the most precedent on to-go snacks.

A wider range of alcoholic beverages, for the local shoppers, and high-end Costa Coffee machines for the long-haul drivers, were some examples of these customizations.

These retail re-designs are already yielding maximal results, according to Phillipson. “We’ve converted about 400 stores since 2012, and are doing another 50 per year, but already we’re seeing that overall store margins are three times the margin tobacco provides – where just four years ago, the margins were the same.”

These revisions aren’t designed to manipulate the consumers, or sell them what they don’t need. Quite the opposite, in fact. Shell’s re-design is giving consumers more of what they want, which is converting into real-world profit margins. “In 60% of transactions, there are now convenience retail purchases too – which is up from 40% in 2012. Moreover, in 30% of transactions we are seeing convenience-only purchases – that is no fuel purchases at all – meaning our stores are becoming places people want to go to.”

If a retail re-design is enough to make a gas station/convenience store into a desirable destination, just think what a shopfitter on the Sunshine Coast could do for your business? We also offer commercial building maintenance!