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Hot Retailers

BY Katherine Boccaccio

A women’s lifestyle apparel brand born on the Web, a fast-growing burger eatery, a discount German supermarket chain and a homegrown watchmaker are the 2011 recipients of the International Council of Shopping Centers’ Hot Retailers awards. 


The annual honors, based on a survey of more than 55,000 ICSC members worldwide, are designed to recognize innovative retail concepts. 


Here’s a brief look at this year’s winners:


Athleta: Founded 12 years ago and acquired by Gap Inc. in 2008, Athleta has evolved into a premier women’s active lifestyle brand, with apparel for yoga, running, swim, gym, hiking and skiing. 


Previously available only via catalog and online, Athleta officially entered the retail space early this year, opening in San Francisco’s fashionable Pacific Heights neighborhood. The 5,000-sq.-ft. store has an inviting and comfortable feel, and showcases the brand with inspirational imagery. 


Two additional locations are on tap for this summer, both in New York City, with a goal of 50 stores across North America by 2013. At presstime, Athleta was reportedly on track to open two stores in Southern California in the fall.


Smashburger: With 100 locations nationwide, Smashburger is on the fast track. Founded in 2009, the Denver-based, fast-casual restaurant company plans to open 85 stores in 2011, and is targeting 500-plus units in the next few years. While franchising is key to its growth, corporate-owned stores and joint-venture partnerships are also part of its strategy.


International expansion also figures into Smashburger’s plans, as it aims to be the No. 1 global “better burger” brand. It expects to open its first global location this year. 


Aldi: With more than 1,100 locations in 31 states (and 8,000 stores worldwide), privately held, German discount grocer Aldi ranks as one of the nation’s fastest-growing food retailers — a distinction it has achieved without merger or acquisition. 


A model of efficiency, Aldi trades only in essential supermarket services. The chain is known for its low prices and edited selection of some 1,400 items, 95% of which are sold under its own private labels. 


With the bulk of its U.S. stores located primarily from Kansas to the East Coast, Aldi still has plenty of room for expansion. It plans to open 80 U.S. stores this year, and recently entered two new markets: Dallas/Fort Worth and South Florida. In February, Aldi opened its first location in New York City. 


Fossil: Fossil is best known for its namesake watches, the business that started it all in 1984, but in recent years the company has moved far beyond its roots. Today, Fossil markets an array of branded fashion accessories, from handbags and jewelry to sunglasses and, most recently, women’s shoes. 


But timepieces remain Fossil’s bread and butter, and here too, the company has expanded its reach. Fossil still produces its own Fossil, Relic and Zodiac brands, but also has licenses to make watches for a number of designer labels, from Michael Kors to Burberry. 


Fossil’s products are sold in department stores, specialty shops, and specialty watch and jewelry stores across the globe. The company also distributes its products in more than 360 company-owned retail stores and through its e-commerce channel. 


For 2011, Fossil’s primary initiatives are to accelerate its direct-to-consumer channel expansion and grow its international watch businesses, with a major focus on Asia. Plans include opening 80 to 85 stores worldwide.


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Turning to the Cloud

BY CSA STAFF

While 2011 may be half-over, there is still plenty of time to incorporate the right technologies to streamline retail operations by yearend. Chain Store Age spoke with Jay Yanko, managing principal of Verizon Retail & Distribution, about some top technologies for lowering costs and upping efficiencies.

How can a retailer decide which technologies will lower costs, maximize efficiency and create value?
It’s not an easy question. I can tell you that we’re seeing many retailers turning to the cloud. Even with ambiguity around an exact definition, the cloud is a key way for retailers to streamline their IT operations. Previously, the cloud was a symbol on a diagram, a way of representing the communication infrastructure between two systems that were not on the same local network. Today, it is a universal term used to describe billions upon billions of dollars of infrastructure — computers, routers, switches, copper, fiber — operating systems and applications that make up and operate the Internet.

How does the cloud help retailers?
Cloud allows for the centralization of operational systems and aggregation of metrics from disparate business processes. This creates a more efficient and costeffective deployment of systems and people, as physical and logical functions can be pushed up the technology stack. The cloud also allows instrumentation, such as sensors and other business intelligence tools, to gather information about and monitor lower-level operations and then make their outputs more visible to decision-makers. New technologies, centralization and services enabled by cloud allow for new business processes to be conceived, implemented, managed and monitored.

How else does the cloud help centralize the management?
First, the cloud means lower levels of integration with store-level systems because integration is intrinsic in the development and deployment of centralized systems. This reduces the effort required to connect to and gather store-level metrics and aggregate functions and provide better, timelier reporting. Centralized systems delivered as services also lend themselves to op-ex models. That becomes important as many retailers look for ways to shift their balance sheets. And lastly, centralization reduces the complexity of integration for systems and data as it is much easier to integrate a few systems based on services, rather than thousands of distributed systems.

Are there some key functional areas where retailers can take advantage of the cloud to centralize operations?
Absolutely. There are four main areas where retailers can centralize the management of IT operations: point of sale; task and workforce management; digital media management; and customer analytics.

To elaborate on digital media management, it is important to note that central management of content in the cloud minimizes work at the region or in-store. It also creates a consistent brand feel and awareness across stores.

For instance, retailers can tailor media experiences that are customized for the brand, season, time, weather, location and customer demographics. The issue, of course, is that this calls for high bandwidth. High-quality digital media is comprised of large files that need to be distributed to many locations for display. While bandwidth and timing of content delivery are concerns, they can be managed by scheduling delivery at low-network usage times and by only delivering updates and not complete refreshes.

Customer analytics allows for click stream in the real world. It provides the brick-and-mortar equivalent of click-stream data. When combined with click stream and central POS, this offers a complete view of consumers across all channels. Once again, video means high bandwidth, which can be overcome with systems that perform the analysis in the store and only aggregate the analytics information centrally. This increases the store footprint a bit but also provides on-site repository of video that can be repurposed for loss prevention.

Any final thoughts or recommendations for retailers?
All retail technologies out there certainly create challenges for retail IT professionals. The technologies we talked about today help cut through the noise. One thing to note is that all of these solutions are either consumer facing or a way to understand the consumer better, or a combination of both. Because at the end of the day, it’s all about the customer

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Green Building Options

BY Marianne Wilson

Blain’s Farm & Fleet knows all too well the misconception about conventional construction versus construction with a metal building system. In fact, the chain’s director of engineering, Neal VanLoo, recently was challenged by an architect when building a new store.


“The architect was against using a metal building system because he thought the design would be a square, fixed-dimension tin box,” VanLoo said. “We had to sit down and review the plans with him in order for him to realize the benefits of a metal building system.”


VanLoo said Blain’s Farm & Fleet exclusively uses metal buildings for new construction. (The Janesville, Wis.-based retailer made the change because of flexibility, economics, delivery and quality.) Its new 114,500-sq.-ft. store in Verona, Wis., is a good illustration: The building is a metal building system with a standing-seam metal roof. The walls are insulated precast concrete panels, split-face block, and horizontal and vertical architectural metal panels.


Sustainability is important to Blain’s Farm & Fleet, whose Verona store has high insulating values, skylights and clerestory windows. Its metal building system plays a key role in its green construction. Steel, the primary material in a metal building, is the most recycled and recyclable building material. Plus, the array of available choices for walls and ceilings means that insulating values can soar with a metal building.


“For those seeking LEED accreditation, steel can help achieve that goal,” explained Chuck Haslebacher, chairman of the Metal Building Manufacturers Association (MBMA). “The steel members of a metal building are engineered specifically for each building and then shipped to the construction site. Along with no wasted materials, this offers customization, a quick construction period, and the capability to erect a building year-round.” 


Despite the benefits of metal buildings, there is a perception that a conventional building design is the most economical and permanent choice. Haslebacher disputed the notion and explained that with current steel-building solutions, owners and developers receive the building package from a single-source supplier.


“A metal building from a single source can offer a faster, consistent and more efficient construction life-cycle cost,” he said. “The products reach the job site faster, and engineering costs are typically lower than conventional engineering. And metal building systems are permanent structures lasting 60 years or more.”


They are also very versatile, according to Haslebacher.


“The versatility of a metal building system allows many other exterior materials to be used,” he explained. “The steel frame bears most of the building load, so the exterior finish can be brick, glass, masonry, EIFS, insulated steel wall panels or other options. With these materials, the distinctive look can be created to express a retail corporate image.”


A good example is the Ace Hardware in Boone, Iowa. The store is a metal building construction. The builder/steel erector R.H. Grabau Construction, Boone, used a combination of glass split-face block and special insulated embossed panels. The subtle colors were chosen to create a contrast with the Ace Hardware sign for aesthetic appeal, as well as long-term durability from the elements. A metal roof and wall system were also incorporated to create an energy-efficient package.


INTERIOR: On the interior, metal buildings provide easy adaptability, with the steel spans allowing for creative and interchangeable interior designs. 


“When one tenant moves out and the new one wants a different layout, the wide-span configurations of a metal building allow spaces to be reshaped and remodeled,” Haslebacher said. “Also, the metal building provides flexibility for mechanical additions and interior electrical layout alternatives.”


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