STORE SPACES

Burlington Stores runs strong in Q4; sees plenty of room for expansion

BY Marianne Wilson

Shoppers just can’t get enough of off-price stores.

On the heels of strong results by TJX Cos. and Ross Stores, Burlington Stores on Thursday turned in a stellar fourth quarter performance that included its 16th consecutive quarter of same-store sales increases. And it also revealed plans to expand its store base.

Burlington’s net income in the quarter, ended January 28, surged 27.1% to $125.6 million, or $1.77 per share. Earnings, adjusted for one-time gains and costs, were $1.78 per share. The results easily topped Wall Street expectations.

Net sales rose 9.4% to $1.69 billion in the period, also exceeding Street forecasts. Same-store sales rose 4.6%.

“Burlington is gaining ground outside of its traditional apparel offer, with range developments in both home and beauty helping to drive up average basket sizes,” commented Håkon Helgesen, analyst at GlobalData Reta. “While neither category is yet at maximum customer penetration, shopper interest and purchasing rates continue to grow which indicates that Burlington has pitched these categories correctly and is executing them well in store. In our view, this range extension is one of the most exciting growth vectors for Burlington over the next few years and we believe it will continue to support good levels of same-store sales growth.

On the chain’s quarterly earnings call, CEO Tom Kingsbury said the company will open 30 or more stores this year, and that its long-term goal is to expand to 1,000 locations. Burlington operated 592 stores in 45 states and Puerto Rico at the end of the quarter.

For the year, the company reported profit of $215.9 million, or $3.01 per share. Revenue came in $5.57 billion.

“For the year, we delivered 9.2% total sales growth, a 100 basis point expansion in adjusted EBITDA margin rate, and a 40% increase in adjusted net Income per share,” stated Kingsbury.

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STORE SPACES

Report: Robo-baristas hit San Francisco

BY CSA STAFF

A new coffee shop is open in San Francisco. The blend of the day: artisan coffee and automated technology.

Taking a page from the AmazonGo experience, Cafe X is an automated coffee shop that opened in San Francisco’s Metreon mall on Jan. 30, according to the Los Angeles Times.

Encased in plexiglass, the kiosk contains two coffee machines equipped to brew Americanos, espressos, cappuccinos, lattes and flat whites. Customers order drinks from an app or one of two iPads mounted outside of the kiosk.

Upon receiving the order, the robot’s arm maneuvers a paper cup, pushes on syrup levers and brews the customer’s coffee order. The robo-barista can make a beverage in less than a minute, and can pump out 120 coffee drinks in an hour, the Los Angeles Times said.

To read more, click here.

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STORE SPACES

Careful Curation is Key to Avoiding In-Store Sensory Overload

BY CSA STAFF

Each moment, it seems, something new emerges to compete for our attention. Our desktop browsers manage dozens of tabs simultaneously, even though we can only process the information contained on those pages one tab at a time. Our phones ping away, constantly keeping us connected to an infinite virtual world.

And if we look away from our screens and step out into the physical world, we’re likely to be bombarded by a kaleidoscope of signage demanding our attention. In fact, everywhere we look, an ever-increasing number of stimuli compete for our attention, and that reality is having an impact on all of us. According to a study from Microsoft, humans now have a shorter attention span than a goldfish.

But what does this mean for those vying for our attention? Traditionally, retailers have stocked their stores full of bells and whistles designed to capture customers’ attention. If we’ve reached a tipping point where sensory overload leads to endless distraction, what can retailers do?

Focus on fundamentals

Every question inside the store, from layout to color scheme, must be designed with the customer journey in mind. Thriving retailers constantly engage in the process of deepening their understanding of how the consumer wants to shop and what the consumers' needs are in-store. But in the age of sensory overload, consumers need help focusing. The store cannot be a maze of distractions; it must be an oasis of captivation.

Retailers must create intentional sensorial experiences that have meaning. Rather than introducing a sensory element for its own sake, retailers should practice careful curation to the point where every single sensory detail inside a store reflects specific intent to enhance the customer journey.

Careful curation

The Apple Store is a model of meticulous design and careful curation. Every detail – from the inviting demo models to the aesthetics of the employee uniforms to even employees’ calm and collected attitudes in the face of large crowds – is designed to communicate the message that consumer technology is at is most powerful when it’s user-friendly for everyone. It’s that value of accessibility to all consumers, regardless of how tech savvy they are, that provides Apple with a litmus test for curating what belongs inside its stores.

As a result of that specific intent, Apple employees, armed with iPhones and iPads, bring the register and a whole lot more out onto the floor. They demonstrate the brand’s value proposition by engaging consumers with technology that makes the shopping experience faster, easier and perhaps most important of all, an engagement that is on brand.

Nordstrom’s “Space” concept store represents a different, but equally compelling application of the specific intent that goes into careful curation. Positioning Space as a boutique alternative inside the larger, classic department store, Nordstrom chose to go small by limiting the size of the store to 500 sq. ft. This delivers more intimate and more personalized experience today’s customers, particularly Millennials, increasingly want. Meanwhile, the aesthetics of transparent displays and an abundance of white space not only reduce clutter, but they also cultivate a sense of something new by curating the look of a Star Trek spaceship – an important nod to consumers who expect modern design.

It’s important to note that the specific intent of curation extends down to the products themselves. Where the department store is known as a home for name brands, Space curates a boutique vibe by mixing in smaller, less well known labels that are more commonly found in specialty shops, or online. Perceptually, the selection appears more personalized and more customer-centric.

Careful curation isn’t just subtraction

The sights, sounds and even the smells consumers encounter when they step inside a store set the tone for the experience. This is an important lesson to keep in mind for careful curation because it’s easy to confuse the need to declutter with a Spartan aesthetic. If retailers think about careful curation only in terms of the clutter they can subtract from their stores, they will miss the larger opportunity to enhance the consumer experience through specific intent.

A flashing neon sign inside a refined luxury store is a noisy distraction, but inside a video game store, that same sign sends an essential signal that the consumer experience is meant to be rich with bright, shiny stimuli. Applying an across the board clutter-free standard might avoid all such signage. But if we adopt a mindset of careful curation, a retailer’s specific intent creates a meaningful sensory experience that both meets consumer needs and becomes a living, breathing extension of the brand’s values.

Deploy technology with specific intent to curate the retail experience

The retail experience is increasingly being transformed by technology. But integrating new technology into your store isn’t the same thing as improving the customer experience. Deploying technology must be part of a larger plan for careful curation; otherwise, it can be a very expensive miss that merely adds to the clutter. Some technology, while undoubtedly cool, may not mesh with your brand’s intended experience, at least not without some thoughtful adaptation. It must have a meaningful purpose for the customer.

“Smart” mirrors represents one way in which clothing retailers can transform how we shop for apparel while reducing the amount of inventory on the floor. And Sephora’s Skincare IQ screens provides detailed product information and personalized recommendations while limiting the number of product specialists needed per shift. The screens take what we love about the online world and turn it into an offline experience where we can immediately touch and feel the featured products.

Retailers are right to deploy technology that meets the expectations of today’s technology-obsessed consumers, but like all other in-store elements, technology deployed without specific intent only ends up adding to noisy distractions. The goal for retailers is not to reduce sensory overload, but to be mindful of the challenge it presents. By thoughtfully considering each in-store element, retailers can be certain that their message permeates the noise of an increasingly cluttered world.


Scott Moore is global senior VP of marketing for Mood Media.

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