“At a time when rents are up, construction costs continue to rise, financial restatements are on the increase and Starbucks has announced it will grow its store count from 10,000 to 40,000 units, real estate project management is more important than ever before,” said Mark Friedman, CEO of Santa Monica, Calif.-based Accruent.
Friedman addressed some 300 attendees of Accruent Insights ’07, the company’s user group conference held April 10-13, in Santa Monica. On hand were real estate executives from Target, The Home Depot, Panera Bread, Regal Entertainment and Chico’s, to name a few.
Friedman described the current state of the retail real estate industry as “seismically shifting. Besides the escalating rents and construction costs and the regulatory scrutiny, hyper-growth companies such as Starbucks are exerting additional pressures to perform as they become high-test competitors for your locations.” Companies are responding to the seismic shifts, Friedman said, with real estate performance management (RPM).
Retailers typically use RPM to grow revenue by executing rollout faster and more efficiently, reducing expense through elimination of overcharges and inefficiencies, and achieving compliance by instituting controls and accountability. Leading the charge in RPM is a host of new and upgraded solutions designed to reduce time and expense, and increase profit.
Linking strategy to execution: The session, “Linking Strategy to Execution,” co-presented by Bart Waldeck, VP of product strategy and product marketing for Accruent, and Mark Zygmontowicz, managing director of predictive analytics for MapInfo, drove home the point that profitable retail real estate is more dependent on technology than ever before.
“Today’s technology solutions have expanded from point of sale, merchandising and supply chain to real estate life cycle,” said Waldeck. The new technology is a response to clamoring retail demand.
“We are experiencing a true race for space,” he said. “And this is led by accelerated expansion by hyper-growth retailers.” Which means, if you’re going to find locations, there’s not a moment to spare. That’s where technology comes in (see sidebar).
“Linking strategy to execution means optimizing the portfolio, for one,” said Zygmontowicz. “It also entails picking the best locations—rapidly comparing sites and analyzing a large number of potential locations—as well as opening stores at a faster rate.
“What we’re talking about is reducing the time spent doing all of the above,” said Zygmontowicz. “Because in the race for space, speeding the time from evaluation to implementation makes a difference.”