I haven’t designed any auto dealer showrooms. But I certainly would take a lesson from the folks who devised Saturn’s new retail strategy.

Like a lot of other retail marketers, Saturn’s did their homework. Not surprisingly, they learned that 75% of auto buyers do their research online before even getting near an automobile showroom. So Saturn’s new design includes computer stations with free Web access right in the showroom to entice would-be buyers.

Further research showed that their target audience has changed in the past few years. They are mostly female, “…younger, with higher income and education and care more about style and the driving experience than value and pricing issues.” So they’re luring them in with great showroom interiors featuring “modern graphics and furnishings and bold use of the brand’s signature red.”

Wow. I want to stop by and check it out myself for inspiration, even though I’m a few years beyond the Saturn target audience. Combining high tech with high touch sounds like a dynamite strategy, one that almost any retail store could emulate, even on a tight budget.

Read the article, then consider visiting a Saturn showroom yourself. If they can figure out how to drive customers inside, I’ll bet you can, too.

So you thought you had to worry about Wal-Mart, Target, Home Depot and Lowe’s cutting into your territory? Well, you still do, but for reasons you might not expect.

The big guys and even the medium-size guys are downsizing, shrinking, rescaling—whatever you call it, they’re invading the neighborhoods where smaller retail stores used to dominate.

In a way, you can’t blame the big guys. They’ve done their homework, as this story in the Sacramento Bee (free registration may be required) points out: “Retailers know you’re pressed for time. They’re pressed for profits. Their solution for both: smaller stores carefully stocked with the stuff you’re most likely to buy.”

Think about it. How many times have you stopped at Trader Joe’s instead of Vons because you know you can find what you need in a hurry, without circling the parking lot to find a spot? Or have you gone into the local Ace hardware store instead of traipsing through Home Depot? A lot of consumers do just that because they know that even if they have to pay a little more, they’ll get quality items and decent customer service.

Even if you’re proud of your store’s reputation for great service and targeted merchandise, it pays to be vigilant. The big chains usually have big advertising budgets, so they can let lots of people know about their new, smaller stores.

How do you continue to differentiate? By doing what you do best. Continue to keep the customer service level high, the merchandise mix well-stocked, the convenience factor well-known (consider offering to feed shoppers’ parking meters, for example, or matching any discount store’s prices on select items).

And, as I’ve said before, decide whether you really want to stay in your present location. Moving into a high-traffic area such as Bank Street in Decatur, Alabama, is paying off for the boutique merchants there. Even if the big-box stores set up shop nearby, you can work with your neighboring retailers to set your district apart through advertising, promotions, events such as sidewalk sales, etc.

Don’t be afraid of the big boxes and their smaller offspring. I always say retailers should study their best practices. Now it seems like they’ve been studying the best practices of small retailers all along.

It really helps to know your customers. I saw two articles this week about businesses that stopped to listen and are doing great because they did.

Consumer electronics chain HMV in England has been around for 86 years. But it got a bit stodgy and profits started falling. The CEO even admitted they had lost touch with customers. So they got in tune with the younger generation and now offer all the things these big spenders love: free computer stations, music downloads to memory sticks, giant plasma TVs and even a juice bar. The results on the bottom line aren’t in yet, but HMV has turned itself into a retail destination by listening to its customers.

So has T-shirt store Lemon Rags in Burbank, Calif. The husband-and-wife owners started out as a recording studio selling T-shirts on the side. Turns out the customers were more interested in the rags than recording. So the owners concentrated on stocking pricey T-shirt and spun themselves out of the recording business. Again, they saw what turned their customers on and adjusted accordingly.

Having a passion for retail isn’t always the same has having a passion for what you’re selling. Key in to what your clientele wants and buys. It might not be what you had in mind, but if you listen—or in this case, respond—to buying patterns, you could become a niche destination with sales exceeding your original forecasts for a different product(s). Good luck and good listening!

…to figure out that customer loyalty has made this bagel-restaurant chain a growing giant. Even though the parent company of Einstein Bros. and other bagel cafes has had its financial problems, the quality of its food keeps customers coming back.

I remember when Einstein bought out the Baltimore Bagel chain in San Diego. As a Baltimore customer, I was worried that the menu choices and food taste would diminish. I was pleasantly surprised when both improved. The breakfast and lunch menus continue to improve, and I look forward to the yummy baked goods Einstein’s now offers. It seems like the menu gets revamped every six months or so–I also look forward to trying out the new items.

All the Einstein cafes I’ve been to have the same basic layout. It seems to work, but I would change it a bit. The first thing customers see is the checkout area. They’re then forced to walk off to one side, where the large menu faces the order line. Even before they order, they’re confronted with a refrigerator case that holds all the cold drinks they’re supposed to bring to the cashier. Then they wait in line to order.

I would move the refrigerator case closer to the cashier, or maybe eliminate it in favor or an ice tray for the drinks. Then customers like me wouldn’t feel so rushed to decide on beverage as others who don’t want a drink get ahead of me in line.

That’s a minor complaint. The stores have colorful, whimsical graphics throughout. It’s a pleasant dining experience with delicious food and moderate prices. This winning combination is fueling a period of unprecedented growth for the parent chain.

You should stop in sometime. While you’re noshing, check out how the place blends merchandising, production selection, design and graphics. Then think about how you can apply those principles to your retail location. You don’t have to be a genius to see how Einstein’s theories can work for you.

You hear and see a lot in the news about China’s exploding economy. Yet I’m continually fascinated reading about the similar changes in India, the world’s No. 2 most-populous nation.

Stories about Indian retailing constantly pop up when I Google-search for retail design news. This article talks about how Western-style shopping malls are popping up all over the country. Reebok just distributed a press release about opening its largest store anywhere–15,000 square feet of Reebok-only branded merchandise. Products are merchandised in categories such as Running, Walking, Aerobics, Tennis, Cricket and Lifestyle to help customers make better purchase decisions, the release says.

I like how the Indian press release writer prefaces a quote from Reebok’s managing director for India: He “expressed his delight at the opening” of the new store. In the U.S., quotes like that usually say something like, “We’re pleased to announce…” blah, blah, blah. Very delightful in their speech, the Indian people can be.

If you’ve seen any Bollywood movies, you know there’s a growing, affluent middle class that hungers for and has money to spend on American goods. Now that those middle-class people are getting malls and shops that cater to their tastes, it might be time to expand your merchandising possibilities.

The Times Online article calls India “consumerism’s final frontier.” You don’t have to be a Wal-Mart or a Pizza Hut to get in on the action. But if you’re a supplier to some of the big Western retailers getting into the Indian market, it would behoove you to find out if your product or service can piggyback with theirs.

I’ve worked with companies that have had great success partnering with firms that do business in Malaysia and Taiwan. The startup costs might look like a barrier. But do the numbers and you might find going global isn’t as difficult as you would expect. I will express delight in your success.

Todd Languis, the owner of a growing Orange County, California-based home entertainment company, the decision to open a showroom was easy. “I had been working out my garage, but my customers needed to see the installation how it might look in their home,” said Mr. Languis.

Mr. Languis found TRIO Display through a Google search, liked what he saw, and contacted owner/head designer Jeff Grant. The design challenge was to create a different installation for several varied scenarios in the showroom space. Mr. Languis wanted to show his workmanship in kitchen, conference room, home office, and family room environments.

Jeff and the design team crafted a lay-out strong on aesthetics, with clean open sight lines and a welcoming home-style ambience. Oddly enough, the toughest part was choosing the color palette.

When the DVI Home Theater showroom opened late last year, it paid dividends immediately. “The showroom boosted business seventy percent,” said Mr. Languis. “One of the major concerns my customers have is how to use the equipment, how it works when it’s installed. Our display puts it into the context.” When TRIO spoke to him, DIV Home Theater had just landed a $735,000 commercial installation job. Not bad for a business that operated out of a garage only twelve months ago.

Retail packaging (bags, boxes, etc.) comes in all different shapes, sizes, colors, and materials. It’s easy to become overwhelmed by the options for what seems like such an easy decision. Here some tips to make your decision easier.

• Pick the appropriate bag for your merchandise and brand. This is common sense. You wouldn’t put a diamond ring in a plastic t-shirt bag; you wouldn’t package a cheap tee in a tinted Kraft box. The right packaging confers value to your brand name and the product.

• Use gusset bags if you sell bulkier items. The gusset is the added panel on both sides of the bag that allows it to expand. Not to worry, a gusset bag folds almost as flat as a non-gusset bag, which brings up another point…

• Choose retail packaging that stores flat. Packaging takes up a lot of storage space, so pick a product that economizes on space.

• This seems like a no-brainer, but take your biggest boxed item and use it to choose your biggest bag size.

• Turn your retail packaging into a promotional vehicle for your store by putting your store logo on every bag. The bag then becomes a walking advertisement when it leaves your store.

• Environmental awareness is huge, and for good reason. Part of the conservation efforts involves recycling retail packaging. Instead of plastic bags, think about buying a slightly sturdier cloth bag with your logo on it. This reusable marketing tool will pay dividends in the long run and burnish your image as a “green” retailer.

I’ve blogged before about the importance of great product selection and great customer service. Some retail chains with smaller stores, like Anthropologie and The Sharper Image, know that the two go hand in hand. Yet some larger stores, like The Home Depot, only emphasize customer service when they get enough complaints to make their bottom line suffer.

So it heartens me to see stories about retailers like family-owned Elliott’s Hardware in Dallas. They’re holding their own even with the arrival of nearby big-box stores like The Home Depot and Lowe’s. And outstanding selection plus dedicated customer service are the reasons why.

Quite a compliment that Home Depot’s district manager visits Elliott’s monthly. “It’s an old-school hardware store, and there are only a few of those left,” he says. “I strive to emulate some of that feel that they have at Elliott’s.”

The experienced staff at Elliott’s really go the extra mile for customers. The lawn and garden manager even “…keeps a hand scope in his pocket that magnifies by 10, various bugs in bottles, and leaves, blades of grass and soil that people bring to him for a diagnosis. He calls them ’salad bags.’ ”

A marketing professor at Texas A&M University, who has written books on customer service and been a Lowe’s Co. board member for nine years, has good things to say about Elliott’s:

“When a customer makes up his mind about where he’s going to shop today, he’s deciding what he’ll endure to get it. What you deliver each and every time affects your reputation. It’s cumulative and dynamic. It takes a while to build a reputation, and it takes much less time to ruin it.”

That pretty much sums it up for me. Don’t let your reputation go down the drain because of one poorly trained sales person or one out-of-stock item. Be like Elliott’s. Be a place where everyone knows the sales staff cares and the shelves are well-stocked. When the manager of your big-box competition starts stopping by regularly, you’ll know you’ve made a great impression.