The Big Chill
Sprouts Farmers Market in Westlake Village, Thousand Oaks, Calif., has joined an elite club: It is only the third store in the nation to achieve the Environmental Protection Agency’s GreenChill Partnership higher honor, Platinum Level Certification.
Sprouts, which specializes in natural and organic foods at affordable prices, joined the EPA program in 2010 and, since then, eight of its stores have earned GreenChill awards. (GreenChill works with food stores to reduce refrigerant emissions and adopt green refrigeration technologies and practices.) With the construction of its Westlake Village store, the grocer wanted to raise the bar and meet the stringent Platinum standards. The Platinum level of certification requires, among other things, the use of only non-ozone depleting refrigerants, and a storewide annual refrigerant emissions rate of no more than 5%.
“The main goal at Thousand Oaks was to reduce the risk of leaking harmful HFC into the atmosphere, and to reduce the cost of our initial refrigeration charge, said Jerry Stutler, VP construction and facility engineering for Sprouts Farmers Market, Phoenix, which operates some 100 stores throughout Arizona, California, Texas and Colorado.
The company also wanted to reduce its potential exposure to costly catastrophic leaks in its systems.
Sprouts selected Hill Phoenix, Conyers, Ga., to design a system that not only would be eco-friendly and energy-efficient, but also cost-effective to install and maintain. The system also had to reduce the store’s use of refrigerants to meet the Platinum certification standards.
In collaboration with Sprouts’ construction and facilities engineering team, Hill Phoenix designed and manufactured an innovative new refrigeration system that met Sprouts’ criteria. Installed in April, the system uses CO2, considered a natural refrigerant with very low global warming potential, as a coolant.
“Before we got involved with GreenChill, we were averaging about 2,000 lbs. of refrigerant in our system,” Stutler said. “We reduced that (amount) by about 60% to 65% with our stores that are GreenChill Gold certified. But this new CO2 design yields an even more significant reduction in HFCs.”
The new solution features a full CO2 cascade system for both low-temperature and medium-temperature applications (the Second Nature MT2LX). It is made up of two independent refrigerant systems that share a common cascade heat exchanger. The upper-cascade system is a reduced charge HFC system that cools the CO2 in the lower-cascade.
The advantages of a cascade system include reduction in the refrigerant charge and a reduced carbon footprint. And since the HFC is confined to the primary system located in the machine room, the total refrigerant charge and the potential for leaks are both greatly reduced.
According to Stutler, it’s not easy to put a dollar value on the potential payback for the Second Nature system.
“If we had a catastrophic leak in our old system, we could have leaked 2,000 lbs. of refrigerant — multiply that by $10 per pound to recharge the system,” he said. “With today’s system, we only have the potential to leak 235 lbs. of refrigerant.”
Stutler added: “Certainly, we’re hoping to save money over the years. But how do you put a dollar amount on the value of being green, reducing your carbon footprint and improving the overall system performance?”
M-Commerce Outlook Mobile sales expected to hit $31 billion by 2016
Along with social media, all eyes will be on the mobile channel this upcoming holiday season. More and more retailers are joining the rush to launch “apps” that can be accessed by smartphone or tablet users. Others are putting QR codes on their products that can be scanned for information. At the same time, increasing numbers of consumers are using their personal mobile devices to do everything from research store information and compare prices to receive coupons and purchase products.
In terms of sales transaction volume, however, the mobile channel still has a way to go. According to a recent study by Forrester Research, retailers can expect 2% of their online sales (as opposed to total sales) to be transacted through mobile devices in 2011 (“Mobile Commerce Forecast: 2011 to 2016”). Forrester expects mobile commerce sales to grow 40% annually for the next five years, reaching $31 billion by 2016, or 7% of Web sales penetration.
But while mobile commerce still represents a small base of overall transaction volume, the channel represents a huge opportunity for retailers to generate millions in incremental revenue. As the Forrester study notes, mobile commerce sales are likely to gain even more momentum as consumers become more comfortable with the security of the channel, retailers improve their sites, and mobile Web speed improves.
Retailers can capitalize on increased interest in mobile commerce this holiday by incorporating a mobile site into their multichannel holiday strategies — and they should take care that the branding and other elements are synchronized across channels to provide the smooth shopping experience that consumers increasingly expect. Also critical: Making sure the mobile store is customer-friendly, has an efficient on-site search engine and offers easy checkout capabilities.
“We expect m-commerce to really take over in the next year or two,” reported Janet Hoffman, global managing director of the retail practice Accenture, San Francisco. “There is plenty of opportunity in the m-commerce race. It will be fun to watch the activity and see which companies get it right first.”
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Growing Disney’s Best 30 Minutes
In May 2011, Disney Store let landlords know it had big plans: The 200-plus store retailer of Disney merchandise announced at the International Council of Shopping Centers’ annual retail real estate convention that it would open 40 stores globally this year, a jump from its originally announced 25. That’s big news from a chain that, like most of its retail counterparts, has had more than its share of struggles as the economy tanked and it was forced to embark on a stringent right-sizing plan.
But during the last 18 months, Disney Store has transformed itself. Today, the chain is not only opening stores but is actively remodeling existing units under a new store design that is highly experiential, even by Disney standards.
Chain Store Age talked with Paul Gainer, senior VP of Disney Store North America, about the newly unfurled expansion track and the new look that will go along with it.
Tell me more about the announcement Disney Store made back in May.
The crux of the announcement was that we would be accelerating the new store design, while maintaining the overall store count at 215. As we see opportunity in market voids, we will add stores and remodel some of our highperforming stores this year. The goal is to accomplish that prior to the 2011 holiday shopping season.
What are Disney’s specific plans going forward, in terms of new locations and remodels?
The goal is over the next five years to be able to roll out the new store design across the entire portfolio. There is a three-pronged program that includes new builds, remodels of existing stores, and relocations where we will move stores within an existing mall to a better location and reopen with the new design.
What are some of the key features of the new design?
Our vision statement is: “The best 30 minutes of a child’s day.” That is our filter for everything that we do, including our products, guest service and, of course, the store design. We are focused on creating that magical experience for a child in the store, and the entire family. There is a pixie path that navigates shoppers through the store and into different neighborhoods, such as the Princess neighborhood, a Cars neighborhood or the Toy Story neighborhood.
In the Princess neighborhood, for example, a child can wave a Cinderella wand at the magic mirror, and Cinderella appears in the mirror. Boys can enter the Cars neighborhood and can customize and build their own car in the store. One of the key store experiences is the Disney Theater, a designated space with a 12-ft. curved screen, and a kind of a jumbo iPod device that allows children to select what they see on the screen. There are many different touchpoints and experiences that allow children to connect with their favorite characters.
How are the redesigned stores performing from both a financial and operational standpoint?
We don’t disclose financial results, but we have seen across the board — from the 20 redesigned stores that we have open to date — double-digit traffic increases in each. We’re seeing that guests are coming to us more frequently and are spending more time in each visit. We’re very excited about those metrics, and the results have given us the confidence to accelerate the new store design rollout.
Talk about what has worked, and what hasn’t.
We see an opportunity to improve the guest service experience. An example would be the mobile POS in the store, as there is an opportunity to rely less on the large cash wrap structure and to service the guest more quickly through mobile POS, from which we can perform full credit card transactions from any point in the store. We are in a much bigger way embracing mobile POS as we move into the holiday season. We had mobile POS in the new stores last holiday as a pilot, and in many cases we are doubling the amount of hardware to increase the service.
What has been your biggest surprise, as well as your biggest challenge, with the redesign and the rollout?
The biggest surprise has been seeing the amount of time people are spending in our stores. It creates more of a focus on how we deal with traffic flow in the store. That is something we expected to a degree, but the amount of time people are spending in the store has been a little surprising. That’s a good problem to have!
The biggest challenge has been through-put. And that’s where mobile POS comes in. Being able to deliver our vision statement, even when it’s a Saturday in December, is a focus for us. The crowds in the store during the holiday have made us rethink how we can operationally make their shopping experience a positive one.
As you open additional stores, what kinds of sites are you eyeing, and how is RCS Real Estate Advisors (New York City) working with you to find and evaluate those sites?
At the highest level, we want to be where the people are. Our shopping demographic is typically moms and families, but we also do very well in high-tourist locations. Our real estate strategy is to start by looking at the “A” and high-grade “B” malls, and you’ll find that the majority of our locations are indeed mall-based. And, yet, our immensely successful Times Square store in Manhattan and High Street store in San Francisco have shown us that high-tourist locations can be big performers, and so we have those kinds of sites in the major markets. We do a lot of “part-art and part-science” traffic flow, analyzing how the mom will shop, how the mom with the stroller will shop, who the co-tenants are in the center.
We look at other retailers where we think mom is shopping, and those are our desirable co-tenants. We are very specific about store size — 4,500 sq. ft. on average and with about 40 ft. of frontage. That very detailed criteria allow us to be very specific with our landlord partners, as well as allow us to be very selective. I have an internal real estate group and leasing group, and RCS is our representative and our frontline partner with the landlords to ensure we get deals done.
What are the best 30 minutes of your day?
Typically it’s when we get to spend time talking about the guest-facing experience. There’s nothing like seeing an idea spark and then delivering that within our visionary framework to the stores. That is probably the best 30 minutes of our day.
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