baking ingredients supplier Phoon Huat has been taking steps to appeal to a younger demographic of experience-driven customers. Key to their success was a combination of a willingness to explore new ideas and having a deep understanding of their customers’ aspirations and needs.
A need to revamp
Phoon Huat Pte Ltd is a baking ingredients supplier with customers ranging from professional food services and bakeries to retail consumers. From a small “mom & pop” store established in 1947 along Middle Road, it has grown to become a well-regarded household name in Singapore.
In 2011, it commissioned Chemistry, a strategic design consultancy, to undertake its first brand study. This led to a revamp of its “Redman” retail brand to appeal to younger customers who perceived Phoon Huat as “old school”. Armed with the new brand design and packaging guidelines, Phoon Huat overhauled more than 7,000 product types.
The study also indicated a need to transform the retail experience to appeal to younger customers. However, at that time, the management was not yet ready to make that leap. It was not until 2016 when they were finally ready to do so with the first flagship Redman store at The Star Vista.
Market research shed new insights
The process to design the flagship store began with an extensive research study by market research agency Insight Asia.
It found that while Phoon Huat stores scored well on variety and value, their in-store experience was unappealing for a younger generation of experience-driven customers. On a functional level, store navigation and segmentation of products were identified as areas for improvement. There was clearly an opportunity to appeal to a less seasoned customer segment looking to start or expand on their baking knowledge.
Customers also wanted access to space and equipment. With limited kitchen space at home and a hesitation to spend too much on equipment at the start, inexperienced bakers desired more than a store that supplied goods. They wanted an experience that could build their confidence in baking.
The research sent a strong message to Phoon Huat’s management that their stores needed to shift from being spaces that sell goods to creating experiences that enabled customers to discover new possibilities.
This led them to craft a design brief for a “baking wonderland” that would delight both loyal customers and baking novices, while focusing on discovery and engagement. In addition, improved store layout, product categorisation and an e-commerce platform should appeal to the younger demographic of customers without alienating Phoon Huat’s loyal base of professional or seasoned bakers.
Based on this brief, Chemistry was appointed once again to design the first flagship Redman store with a new retail experience.
Understanding customers better
To ensure that the baking wonderland would appeal to customers, four personas from Phoon Huat’s customers were identified:
- Novelty bakers: They are exploring a new fun experience. They tend to be younger customers who are new to baking, and might or might not have young children.
- Repertoire bakers: They are keen to build their confidence, and possibly with young children, looking for ways to “love and share” with their little ones.
- Show and Style bakers: They are semi-professional or hardcore hobbyists who are focused on technical skill and results.
- Productivity driven bakers: They are often the professional bakers looking to deliver quality bulk baking.
This provided the Chemistry team with a blueprint around which key design interventions to develop. Specifically, to make baking more accessible, the idea of a Kitchen Pod emerged as a key concept during the ideation workshop.
This centrepiece would address multiple personae’s needs: as an avenue to discover and build confidence for the Novelty and Repertoire bakers; and a platform for the Show and Style bakers to share their expertise in-store.
The personas and insights of customer needs galvanised a new mindset within the organisation. It showed the company that a multi-faceted approach to delivering the new Redman experience both in-store and online was necessary. For example, the management realised that the professional classes offered by Phoon Huat demanded too much commitment from the Novelty bakers, who needed simpler classes to build up their confidence.
The combination of deep customer understanding and the focus to create an omni-channel experience allowed Chemistry to bring together a cross-functional team from within Phoon Huat to ideate and imagine what the new flagship Redman store would offer.
For instance, the Phoon Huat team agreed to forego valuable product display space to make room for the Kitchen Pod. The experiential counter was also strategically located near the store entrance to pull in potential new customers with its fun and casual baking demonstrations.
Prototyping on the fly
“One of the things we noticed early on is that young families quickly discovered the Kitchen Pod as a potential to engage and expose their little ones to the fun of baking,” said John Chan, Chemistry’s Design Director. “So during our prototyping and testing phase, we not only introduced child-friendly activities, like cupcake decoration, we added a sliding pedestal the children can stand on to help them reach the countertop!”
To reduce time to market, Phoon Huat’s management made a bold decision to forego formal prototyping offline; instead, the new flagship store which opened in 2018 became the “living” prototype. A mindset of constant iteration was adopted so there was continual improvement even after the store opened. For instance, the design of bespoke shelving systems was tweaked to make them more robust and yet less costly to set up.
A study carried out a year after the opening of the flagship Redman store at The Star Vista showed a 10 per cent increase of customers from new demographic groups. These customers spent more dollars per basket and fuelled increased footfall through their social media posts, thanks to the many Instagram-worthy spots dotted throughout the store.
Seventy per cent of Redman customers felt that the new store possessed a unique experience that catered to their needs and more. In addition, staff members reported how much more they liked working at the new store – a boon for the company in terms of talent grooming and retention.
The success of the flagship store gave Phoon Huat confidence to expand. Chemistry went on to design new heartland stores in Bedok, Pasir Panjang and Pasir Ris (two of which were opened during the COVID-19 pandemic) based on learnings gleaned from the flagship store. The Kitchen Pod, for instance, which had started out as an experiment, became integral to these smaller stores’ design due to its effectiveness in attracting customers and increasing sales.
Another critical part of the project was to develop a comprehensive digital platform that would connect with Phoon Huat’s customers beyond the store, facilitating not only online shopping,but the booking of classes. This would create a virtual space for customers and the brand to interact, share stories, recipes, and build loyalty through an online membership programme.
This timely solution was critical in helping Phoon Huat weather the COVID-19 storm. The online platform helped the company respond to the “through-the-roof” consumer demand for baking supplies when Singapore instituted a “circuit breaker” that required residents to stay home for two months.
During this period, despite the drastic impact to their business-to-business sales, Phoon Huat managed to hit an annual revenue comparable to its S$ 100 million milestone set in 2017 – thanks to the tremendous growth in their retail business. The company plans to open two more stores in 2021.
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