Store Atmosphere In Khiel's

RETAIL MARKETING

KIEHL’S : STORE ATMOSPHERE IN THE COSMETiCS

In 1851, John Khiel’s bought the apothecary where he was working in as an assistant, and put his name on the door. He sold cosmetics that he did himself, and also made personalized lotions. In 1921, his assistant Irving Morse bought the apothecary and create the brand Khiel’s. The success is growing and the brand start to be sold in department stores in the New-York, London and Paris. In 2000, the group L’Oréal bought Kiehl’s, a new-york family company that couldn’t handle their growing worldwide success. In fact, nothing really unusual, a big group bought a little growing company. But the major challenge of this acquisition is the marketing difference between the companies. L’Oréal, king of branding and communication, in front of Kiehl’s, little cosmetic brand founded on his history and products, with almost no advertising. For the first time, L’Oréal, which usually adapts all its techniques to its brands, had to let Kiehl’s works as it has always did. And it has worked. In a bit more than 10 years, the turnover of Kiehl’s has grown from 40M to more thant 200M dollars. What was L’Oréal role? Replying the concept of this unique boutique in Manhattan all over the world. The brand, that at the time had only one store (the same than in 1851), and products sold in some luxury department store has now more than 250 retail stores all over the world. The principal asset of the brand is probably the concept itself: a trip back in time. In the 21st century, you enter in a cosmetic boutique with simple natural products; vintage design and sellers dressed like druggist, and you directly feel like if you were in the original Manhattan 1851’s shop.

According to the PAD model, a psychological one developed by Mehrabian in 1997, during the shopping experience, when the customer feel pleasure, and more or less arousal, he is more likely to spend more time in the shop, and then probably more money. In some cases, could we think that it’s a sinequanone condition to the purchase? As Kotler says when he developed the concept of atmospherics, the customer does not only buy the tangible product, he buys an all package of services, packaging, advertising, image etc… Also, all this elements can be communicated to the customers thanks to the atmospherics. In the case of Kiehl’s, we could think that the package includes the history, the image of the brand and the message that he tries to communicate. In the case of Kiehl’s, there is no advertising at all. As their choice was to make themselves known thank to the world of mouse, hoping that people will enjoy the brand and the experience that they lived in the shop to share it with their friends. If we assume that the tangible Khiel’s product is only a small part of the package, and that the rest of it is shared by the atmosphere created in the shop, can we think that it’s the only way for Khiel’s to sell its products? Would Khiel’s would know the success if it was advertised as any other popular L’oreal brands? The usual techniques used by the big group are simple: finding a famous face as an egery, doing a lot of advertising including feminine magazines and TV, and selling the products in drugstores or cosmetic store (ex : Sephora) with noticeable gondolas. And they actually tried to apply those to Kiehl’s the first months, but quickly understood that it couldn’t feet the brand. Customers love the brand for the way it is sold, the enjoyable experience that they live. Indeed, before starting this paper, I asked several questions to customers getting out from the Kiehl’s boutique in Paris. All the questions where related to their experience in the shop, and how hey see the product. For practical analysis conditions, all the questions where yes/no answer. 20 women between 17 and 48 years old were interviewed.

Question / Answer Yes Maybe No

Would you be attracted Khiel’s products you didn’t know anything about their history? 3 5 12

Would you buy Kiehl’s product if you didn’t know anything about their history? 6 3 11

Would you buy Kiehl’s product if you had randomly found them in a drugstore? 2 2 16

Would you be attracted by Kiehl’s is the boutique was simpler? 5 7 8

As we can see from the answer from the customers, the experience they live in the shop, the way the products are staged in the boutique. A massive portion of the customers admit that without the whole world created about the product, they wouldn’t purchase it. We recognize here the importance to feel a hedonic need. But does the atmosphere of the boutique changes the vision of a product? Apart from being the part of a whole package, does it gives more values to a product? Certainly. But at what point? I have made the choices to study the effects of a store atmosphere on the tangible product that is sold, the way it characterizes the product, how it enhances its features.

How the visual atmosphere improves the characteristics of a product?

In today’s world, we know that how the retailers sell is as much important as what they sell. In the book Retail Marketing, the authors developed the idea of a PSSE: “perceived store shopping experience”. As we know the more this experience will include pleasure and arousal, the more the customer will stay in the shop and probably buy more. Kiehl’s principal marketing technique is that the customer enjoys his PSSE and shares it to his friends, and therefore it has no other way to share the characteristics and values of its product. Let see how Kiehl’s uses its store environment to manage two different goal : make the customers buy the product, and make his PSSE interesting enough so that he talk about it around him and be a sponsor for the brand.

According to the Retail Marketing book, there are different points in the store environment that maximize the PSSE : the design dimension, the ambient dimension and the social dimension.

The design dimension includes architectures, layout and display.

First the architecture of all Kiehl’s shop is the same: a replica of the original Manhattan boutique, that is to say an old fashion black “apothèque” façade that seems coming from the 19th century. The interior design follows: red-brick wall, vintage decoration, always a skeleton at the entrance, old pharmacy posters, a Harley Davidson (for the original boutique) or miniatures. All this elements permit to Kiehl’s to share his history with the clients. Reminding him where the brand

...