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ACut Above

BY Katherine Boccaccio

The economic downturn has resulted in serious budget-cutting across the retail industry. Few, if any, retailers have escaped the scalpel. But is it possible to reduce store-development expenses without sacrificing store image?

“It’s not easy, but it can be done,” said Craig Hale, principal and national director of retail, Jacobs, Pasadena, Calif.

When embarking on a cost-reducing plan, Hale suggests that retailers focus on two points from the get-go.

“First, you must recognize your brand and keep it in mind both at the beginning of the cost-cutting program and then throughout the process,” he said. “No matter what you do, you must be loyal to your brand.”

The other point to remember, Hale noted, is that how you use the store facility itself is a reinforcement of your brand.

“The store environment must help to produce the sales, and it creates the theater, but still it must be operationally efficient,” he explained.

Creating a store environment that accomplishes both—underscoring the brand while operating at its most efficient—requires teamwork between owner and designer.

“The designer has to recognize the brand, and the store owner has to provide guidance in terms of the costs,” Hale said. “Once a budget and a design objective are established, the team needs to look at every decision through the eyes of the customer.”

Such an approach allows the team to more easily find ways to cut store-development costs. “If you view the decisions you make through the eyes of the customer,” Hale explained, “you will find ways to solve detailing problems and to source finishes and materials that are more appropriate to making the store the theater and the merchandise the star, rather than making the store the focus of the attention.”

Cost-Cutting Tips

Spend the most money where the customer sees and touches, and cut back in areas removed from the shopper;

Make the materials you choose count, whether in terms of payback or brand reinforcement, or both;

Examine how you buy your materials or how they are provided. Either buy directly or negotiate personally for the best quality for the lowest price;

Use your merchandise to your advantage. Since the product is the star of the store, exploit it when you can so that you can spend less on the environment around it; and

Keep sustainability and total cost of ownership in mind when making your decisions.

Customers, for example, rarely look at the ceiling, so that’s a perfect place to scale back. Details far from the customer, such as crown moldings, are potential cutback areas. “Crown moldings could perhaps be in a stock shape as opposed to a custom shape,” Hale added. “Or they could be painted or stained to resemble wood, without actually being wood.”

When addressing store lighting, the first rule of thumb is to specify only what you need.

“Many luminaires have adjustability options to change directionality,” Hale explained. “But if the light is shining on a static display, you’re paying for an option you don’t need.”

The merchandise itself can help to defray store design and decor costs.

“Apparel, for example, with its visual colors and textures, can be used as part of the design scheme,” Hale advised. “The goods are covering the walls, so you are not having to spend money where the customer is looking.”

Smaller wares, though, need a more theatrical environment around them. Jewelry stores may require more interior detailing because the merchandise is so small, according to Hale.

Every store, regardless of what it sells, can benefit from challenging how things have always been done.

“You may find that there is no longer a valid reason for materials that you are using or the ways you are using them,” Hale said. “Rethink, challenge and change your strategies accordingly, with a goal of gaining benefits as well as cost reductions.”

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Kohl’s, Forever 21 win bid for 46 former Mervyn’s stores

BY CSA STAFF

MENOMONEE FALLS, Wis. Kohl’s and Forever 21 won a joint bid for the leaseholds of 46 former Mervyn’s locations valued at approximately $6.25 million.

Kohl’s will assume 31 of the locations while Forever 21 will assume 15, pending approval by the court overseeing Mervyns bankruptcy proceedings.

“We are pleased with the results of the auction,” said Kevin Mansell, president and ceo for Kohl’s Department Stores. “With over 1,000 stores from coast to coast, these locations provide increased presence in under penetrated markets. We will continue to be opportunistic and prudent in our discussions with the owners of select Mervyns real estate as we continue to position Kohl’s to grow market share.”

In fiscal 2009, the Kohl’s said it continues to expect to open approximately 50 stores, including the majority of the 31 former Mervyns’ locations.

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Bazaarvoice appoints new CFO

BY CSA STAFF

AUSTIN, Texas Bazaarvoice, which provides social commerce applications that drive sales, announced that Ken Saunders has joined the company as CFO. Saunders has over 25 years of experience as a senior financial executive at companies including Open Solutions, Peregrine Systems, Fair Isaac Corp. and Arthur Andersen. In his new role at Bazaarvoice, Saunders will guide all aspects of the company’s financial operations, as well as lead the team responsible for day-to-day finance, IT and human operations.

“Bazaarvoice is not only the most innovative social commerce company in the industry, it’s the fastest growing, serving hundreds of major brands worldwide and adding more at a very rapid clip,” said Saunders. “As CFO, I look forward to working with Bazaarvoice’s executive team to drive the company’s growth now and into the future, as they continue to transform the way people interact and shop online.”

“Ken has a wealth of world-class financial experience at both private and public companies, and we’re thrilled to welcome him to the executive team as Bazaarvoice continues to cement its market leadership in the social commerce space,” said Brett Hurt, founder and CEO of Bazaarvoice. “As more and more retailers worldwide embrace the customer voice as a key brand and marketing tool, Bazaarvoice is poised for rapid growth – and Ken is the perfect person to lead our company’s financial strategy.”

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