ECOMMERCE

Fender amps up consumer choice

BY CSA STAFF

Playing guitar is all about expressing yourself, and Fender Musical Instruments Corp. is taking that concept to new heights online.

On its direct-to-consumer e-commerce site, Fender now offers the “Mod Shop,” a feature that allows customers to design their own custom guitars. In a recent interview with Chain Store Age, Ethan Kaplan, chief product officer of Fender and general manager of Fender Digital, explained how the company is using the Fluid Configure 3D modeling solution to make the customer experience more personal than ever.

“It’s about customization and being modular,” said Kaplan. “Customers can change features like necks, pickups and pick guards. Make the guitar personal to the player and more people will play. Nothing gets people playing more than having a guitar uniquely suited to their preferences.”

Launched in June 2016, the Fender ModShop digital custom guitar studio leverages the Fluid solution’s modeling and imagery capabilities to let the musician see their custom design from all angles as they build it. Performance has been optimized to ensure the customer obtains immediate views of all their configuration selections.

Fluid Configure is also mobile-friendly. The solution is hosted and implemented on a hybrid cloud platform.

“ModShop generates a real-time, 3D illustration of what users configure,” said Kaplan. “Customers can exchange designs with other users and save them to our online gallery, if they want. Cart abandonment is our jumping-off point.”

Once a customer makes a final selection of a custom guitar design, the order is input into Fender’s Demandware e-commerce platform and sent to the company’s factory. An SAP ERP system generates a bill of materials that is sent to the factory floor so workers there can make the necessary modifications to existing product lines.

Initial results after launch included a significant uptick in site traffic, as well as an increase in the average time spent on the Fender site to four minutes. Kaplan also reviewed some other benefits.

“We are generating high social traffic from ModShop,” he said. “Fans exchange guitar ideas on Twitter and give each other ideas for new products. It’s also a way for us to quickly react to customer interest and release new design features.”

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Insights

The ‘Whole Foods Effect’ shines on

BY CSA STAFF

The surge in health-conscious retailers is evident wherever one shops. In the space of a few years, the likes of Lululemon, Fresh Market, and Orangetheory Fitness have proliferated in shopping centers. But Whole Foods, arguably a chief driver of the trend, has transformed its own business as well as that of centers.

In the past five years, Whole Foods increased its store count nearly 50% to a total of 450 in three countries. The $15 billion juggernaut of organic food shows no signs of slowing, nor do competitors such as Sprouts and Trader Joes. Whole Foods’ growth has helped forge a value proposition that is reshaping the commercial real estate market. People who once came to a shopping center simply to shop today come to spin, to eat better foods, or to learn how their dog food affects the environment.

The result has been a surge in health-conscious retail real estate, with tenants spanning grocery, restaurants, fitness concepts, and pet stores. It’s a trend peopled by educated and accelerated Millennials who are acutely conscious of what goes in and on their bodies and the effects those products have on the earth. Not to be forgotten are Baby Boomers, who are getting older and more health-conscious, too.

Indeed, the seeds of today’s health-driven retail scene were sown when many Boomers were still in high school and college. In 1972 Title IX was passed. It prohibited sexual discrimination in any federally funded school sports program and gave rise to two entire generations of female basketball players, marathoners, soccer players, and triathletes. As a result, a steady flow of fitness concepts like Orangetheory, Flywheel Sports, and Core Power Yoga, to name a few, have sprung up in shopping centers to cater to women who might not have opportunity to play a sport, but who want to remain active.

Fitness centers open new store doors for athletic apparel formats like Fabletics, Lululemon and Athleta. All of these brands are aggressively expanding in shopping centers with fitness concepts, organic grocers, and healthy eating options. Some are even selling their apparel inside health clubs. It’s no longer considered taboo to wear workout apparel while shopping or grabbing a bite to eat, and the demand for attractive, trendy “athleisure” apparel has never been higher.

Traditional grocery stores, meanwhile, are upping their stocks of organic, fresh, healthy food. The rapid expansion of Whole Foods, Sprouts, and Trader Joe’s into shopping centers has forced the likes of Kroger and Publix to become more conscious of the products they sell, as well as the way they merchandise their fresh and organic products.

By catering to this growing health-conscious audience, grocers are poised to capture more market share because of their tremendous buying capacity and the fact that they already have the framework in place to “reset” their stores and reach this target demographic. We also expect to see an increase of customer experiences within these stores, such as growler stations, salad and sushi bars, and wine tastings.

Even pet stores are venturing into this space. Hollywood Feed is a holistic pet food and product retailer that’s filling a void and succeeding because of it. There are nearly 50 Hollywood Feed stores throughout the Southeast, and they are aggressively seeking locations to expand. We expect traditional pet stores like PetSmart and Petco to expand their organic offerings as well in order to better compete and cater to this growing market.

With increased education and conversation about healthy living, these retailers aren’t an anomaly anymore. Instead, they represent an important and viable subset of the real estate market.

Health consciousness isn’t a trend or fad, but the “new norm” – a real lifestyle change that spans generations and brings new opportunities for the commercial real estate industry.


Emil Gullia, senior director for Franklin Street, specializes in tenant representation, occupier and advisory services. He has completed more than $130 million in retail tenant transactions involving retailers such as Cabela’s, Guitar Center, Harbor Freight Tools, and PNC Bank.

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FINANCE

eBay marks big milestone in second quarter

BY Marianne Wilson

eBay beat sales expectations in its second quarter, during which it also crossed an important threshold.

The online marketplace reported that it crossed the one billion live listings mark in the quarter, reflecting its efforts to expand the breadth of selection offered to consumers and the progress it has made on enhancing its shopping platform.

eBay reported net income of $435 million, or 38 cents a share, up from $83 million.

Revenue for the quarter totaled $2.23 billion, up from $2.11 billion in the year-ago period and also better than expected.

The company raise its full year guidance, and said it expects between $8.85 billion and $8.95 billion in revenue for 2016.

“Q2 was another good quarter where we delivered strong results and had acceleration in growth,” said Devin Wenig, president and CEO of eBay Inc. “We are now one year into executing our strategy to provide the best choice, the most relevance and the most powerful selling platform, and there are signs of momentum in our business.”

eBay said it had 164 million active buyers on the site, up from 162 million in the first quarter.

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