REAL ESTATE

Grand Opening: The Outlet Shoppes at Atlanta

BY Michael Fickes

Chattanooga, Tenn. — The Outlet Shoppes at Atlanta celebrated its grand opening with a ribbon-cutting ceremony this morning.

A joint venture and co-development of CBL & Associates Properties and Horizon Group Properties, the 370,000-sq.-ft. center features a host of national brands and designer outlets.

Located north of Atlanta at a newly constructed exit off Interstate 575, more than 112,000 vehicles pass the site daily. The center is also convenient to travelers on Interstates 75, 85, and 20.

Estimates project that The Outlet Shoppes will draw more than four million visitors annually from a three-state area and generate more than $130 million in annual sales.

Already 97% leased, the site can accommodate an additional 30,00 sq. ft. of outlet shops. It also offers seven parcels for restaurants, service businesses and other retail uses.

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Safeway sees sales rising, but profits pressured

BY CSA STAFF

Safeway digested an unprecedented amount of change during the second quarter and still managed to achieve solid profit improvement and a respectable amount of sales growth while strengthening its balance sheet.

The company said sales from continuing operation during the period ended June 15 declined 1.6% to $8.7 billion from $8.8 billion, but the drop was due largely to reduced fuel prices and the disposal of stores under the Genuardi’s banner. The company’s identical store sales actually increased 1.2%. Meanwhile, income from continuing operations, adjusted to exclude several non-recurring items, increased 43% to $68.1 million, or 28 cents a share, from $47.6 million, or 20 cents a share.

The financial performance occurred during a quarter that saw Safeway digest considerable change. On April 24, the company’s Blackhawk Networks subsidiary, a leading provider of prepaid gift cards through the Gift Card Mall platform, completed an IPO which reduced Safeway’s ownership position to 73% from 95%. A few days later, Robert Edwards was named president and CEO to replace Steven Burd, who had previously announced his retirement. Then on June 12, Safeway announced that it had sold its 223 unit Canadian subsidiary to Sobey’s, a food retailing division of Empire Company Limited.

“We are pleased with the significant milestones we achieved this quarter,” said Edwards. “The substantial cash proceeds we expect to receive from the sale of our Canadian operations combined with the completion of the Blackhawk IPO will allow us to broadly enhance stakeholder value. At the same time, our continuing U.S. operations demonstrated strong year over year earnings growth in the second quarter, and we continue to gain share in our U.S. markets with a 20 basis-point improvement in the supermarket channel and a two basis-point improvement in the all-outlet channel."

Looking ahead, Safeway said it expects full year identical store sales in the range of 1.5% to 2% and also cautioned that earnings per share could be toward the low end of a previously provided guidance range of $2.25 to $2.45.

Safeway ended the quarter with 1,412 stores.

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Four Reasons Why Big-Box Retailers Need a Connected Home Strategy

BY CSA STAFF

By Mike Harris, [email protected]

To remain competitive in today’s digital world, big-box retailers need to capitalize upon new opportunities that connect the online and offline portions of their business. Retail executives understand the need for engaging consumers throughout the purchase cycle across all channels; from initial inquiry and online research, to in-store experience and post-purchase follow up.

Today, the “connected home” concept is heating up and presents a major opportunity for retailers to bridge the online/offline divide. Whether you refer to it as "smart home," "connected home," or the "Internet of Things," this category creates significant opportunities for retailers to establish unique and ongoing connections with their customers, from in-store education to delivery of a central in-home portal that drives "one-click" purchases and ongoing revenue.

The battle lines are being drawn, with various industry sectors realizing the strategic value of “owning” an integrated and centralized customer experience inside the connected home. First generation mass-market solutions are currently being delivered by security companies, telcos, and cable TV companies. These offerings are primarily built around home security, with expensive monthly fees.

However, big-box retailers hold the most strategic position from which to seize market share in this growing ecosystem. Lowe’s has already invested in a solution and online retailer Amazon is getting serious as well. The time for retail executives to act is now.

Here are four strategic reasons why retail executives should stake out their connected home strategy today.

1. Retailers have motives aligned with connected home success
By their nature, large retailers are in the business of offering consumers a wide variety of product choice. Today, there are currently thousands of connected devices on the market using common wireless protocols like Wi-Fi, Z-Wave, and ZigBee.

However, early entrants to this market like telcos and cable companies are typically providing pre-defined “packages” of a few connected home devices focused on security. Their goal is to not only drive revenue but to keep customers from switching their “triple play” services to the other guys. Conversely, product companies who offer a connected home solution typically have an inherent bias to promote (or protect) their own branded devices, and as a result also limit device options for consumers.

The goal of retail has always been to provide a wide variety of products that consumers want — or will want soon. This underlying philosophy of diverse inventory — versus the protectionist agendas outlined above — positions retailers as the ideal channel for delivering connected home solutions that most benefit the consumer.

Furthermore, brick and mortar stores become valuable assets for educating consumers on what is possible in the brave new world of connected devices and homes. Using hands-on displays and interactive media, retailers can bring the concept to life in ways that just cannot be accomplished online. This type of in-store education also goes a long way towards building brand loyalty for the retailer that delivers that knowledge.

2. The hub becomes the consumer retail portal
Consumers who purchase connected home technologies and devices will connect those devices to a central control device or "hub" that coordinates the dozens of devices and sub-systems in the home. Studies show that consumers do not want to deal with multiple apps to control multiple devices. As a result, whoever supplies and supports that central control hub with Web services essentially creates a centralized home dashboard for the consumer, while also creating a powerful portal.

Just as billions of dollars have been spent by online companies to secure their website as a consumer’s de facto portal or home page on the web, the connected home hub plays the same role for consumers’ “physical” home. The business case for facilitating this 24/7 direct line of two-way communication with the consumer and their home via smartphone, tablets and TV interfaces is profound.

3. Persistent product sales made easy
The rise of smartphones and tablets has challenged retail brands to provide a cohesive shopping experience across all channels. However, many retailers lack robust CRM systems that can effectively leverage customer value personalization after the initial sale or outside the store across fragmented channels.

Large retailers are in an ideal position to generate ongoing sales of both products and services with a connected home commerce portal. Via the central hub, retailers have a dedicated and highly visible customer relationship and outreach platform. By providing recommendations built upon the consumer’s lifestyle, interests, preferences and usage patterns, retailers can help consumers leverage the value among their current devices, and make suggestions for new ones.

This approach enables consumers to start small with one simple lifestyle application (i.e. peace-of-mind for their kids, pets or elders; energy savings; convenience, etc.) in order to derive immediate benefit. From there, consumers will grow their network of devices and retailers will be positioned to take advantage of all those future sales via simple “one click” purchases.

4. Revenue opportunities through services
With so many smart devices coming into the market, there arises a massive opportunity for retailers to add value to the experience of owning these products by wrapping software and services around the hardware to make them work together in a cohesive system. In the connected home, previously “boring” products like wireless routers, lighting systems, cameras, locks, and more can become the centerpiece for a wide range of recurring monthly services that add value.

Retailers who control the hub experience can deliver (or simply receive commissions on) a wide variety of services that drive more long-term value from the hardware devices themselves. Service revenue examples include hosting of streaming video captured by IP cameras; semi-annual maintenance services for HVAC systems; referrals to service providers such as plumbers, electricians, or locksmiths; and a host of other services that add value to physical products. Much in the same way the iTunes Store adds value to Apple’s hardware products, or GM’s OnStar service adds value to their automobiles, retailers can generate synergistic revenue with these types of services. Whether the retailer supplies the services itself, or simply serves as a referral point, there is new money on the table for retailers to capture.

Home automation presents business opportunities
In the highly competitive retail space, connected home products and services will open up significant new lines of business for big-box retailers who choose to act. The time is now for retail executives to get serious about the opportunities offered by the connected home and the Internet of Things. Those that seize this moment will provide significant value to their business over the long term.

Mike Harris is CEO of Zonoff, which provides a comprehensive software platform that enables retailers, device manufacturers, and service providers to deliver new connected products and services to the consumer mass market. The Zonoff Connected Home Platform consists of Home, Cloud, and App software and powers everything from entry level point solutions to comprehensive home automation, remote control, and energy management. He can be reached at [email protected].


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T.Platt says:
Jul-19-2013 11:27 am

omnichannel retailing
#retailers need Connected Home strategy to engage shoppers their way http://amex.co/13rIN5K

T.Platt says:
Jul-19-2013 11:27 am

#retailers need Connected Home strategy to engage shoppers their way http://amex.co/13rIN5K

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