Parking Lots: Keeping up Appearances
Parking lots serve as the first point of entry for customers and, as such, are an important brand touchpoint. Chain Store Age spoke with Dan Flaherty, national accounts executive, Ultimat/Crius Corp., about how retailers can maintain a positive first impression without breaking the budget.
What, if any, impact does a badly maintained retail property have on customers? Can it affect business?
Studies have proven the negative financial effect of a poorly maintained property. Essentially, you only get one chance to make a first impression. People don’t want to shop at a run-down store or shopping area. This was shown years ago at Times Square in New York City. The city adopted a zero tolerance policy for graffiti, broken windows and litter. At that time, Times Square was a run-down, crime- and drug-ridden area. Numerous boarded-up buildings, strip joints, graffiti and trash all contributed to the overall horrible presentation of the area. Tourists did not want to go — or be — there. After the zero-tolerance policy went into effect and Times Square was cleaned up, it became a huge attraction to the city.
While Times Square is an extreme example, it does apply to parking lots. The parking lot is the company welcome mat, so it needs to look good. We are all shoppers, and I don’t know anyone that goes out of their way to shop at a run-down store. None of these even addresses the potential savings from preventing lawsuits related to accident or injury on the parking lot. Yes, it absolutely pays to maintain the pavement at a high level.
What is the most common mistake retailers make when it comes to taking care of parking lots?
Being reactive instead of proactive is the biggest source of problems with parking lots. Many owners have a wait-and-see approach to pavement problems. By the time a problem is repaired, it has caused extensive damage and is no longer a small problem.
What are some best practices in preventive pavement maintenance?
The single best practice is to have a maintenance plan and to follow it diligently. This plan should recognize and address small, active and ongoing problems. If a regular system is in place, the probability of a major defect is minimized.
How is Ultimat positioned in the marketplace?
Ultimat is an asphalt resurfacer and is an alternative to traditional methods. It’s a proven alternative to traditional repairs that are often short-lived, unsightly or expensive, and an alternative to the high cost of a mill and overlay.
Asphalt overlays are still necessary in some situations. However, Ultimat provides a solution that in many situations won’t require installing new asphalt. Ultimat is a cost- effective product that helps property owners address pavement needs without breaking the budget.
How can Ultimat help retailers with their paved surfaces?
Ultimat lowers costs and provides long-lasting solutions in lieu of short-lived repairs. This allows the retailer to touch more stores on the same budget. In 2010, a retailer was able to complete nearly 25% of the stores being repaired that year for 10% of the budget using Ultimat. So I say Ultimat can act as a financial alternative as well. It resets the pavement quality and aesthetics.
How is Ultimat different from competitive processes?
Ultimat is different from traditional processes in several ways. Ultimat is a cold overlay process. It is non-caustic, non-hazardous, nonvolatile, and it requires no additional heat during installation. It is as green as a pavement product can be. It does not soften in hot weather.
Also, it doesn’t oxidize, it remains black throughout its life, promoting increased melting of ice and snow in northern climates. Ultimat is a two-lift installation, utilizing two different custom aggregate loads. This provides a strong, tight surface that can stand up to heavy traffic.
Tell us a little about the company.
Ultimat is a product of the Crius Corp., a manufacturer of asphalt cold overlay and asphalt recycling products. The Crius product line is designed to be as environmentally friendly as possible; our products make use of the existing pavement as much as possible.
Crius also has a unique pavement management system: MyPave enables facilities managers to look closely at their properties, review a comprehensive evaluation and then decide which stores will be moved into the upcoming budget. This allows better decisions to be made regarding more comprehensive projects, such as remove and replace or complete reconstructions. Nearly everyone has asphalt, but only Crius has Ultimat and MyPave.
Reduced Costs With Site-Recovered Energy
Retailers and other building owners are caught between two powerful and conflicting forces: the need to lower energy and equipment costs, and the need to meet or exceed outdoor air ventilation regulations for the health and comfort of customers and employees alike. Indeed, studies have proven that outdoor air ventilation creates a healthier work environment. However, as outdoor air rates increase, so does the size, cost and operating expense of HVAC systems.
To address the challenge, many owners are deploying site-recovered energy technologies, such as energy recovery ventilation (ERV). Designed to operate with new or existing HVAC units, ERV technology provides an affordable means to simultaneously cut HVAC energy costs without compromising outdoor air ventilation requirements.
“Energy recovery wheels, also known as enthalpy wheels, resolve the conflict between indoor air quality and energy conservation by recovering site energy contained in building exhaust air,” said Stephen J. Pargeter, VP product engineering, Airxchange, Rockland, Mass., which manufactures energy recovery ventilation wheels. “Up to 80% of this energy is recycled to precondition outdoor air, resulting in reduced HVAC load and operating cost.”
For new and replacement projects, energy recovery costs are typically offset by lower HVAC system first costs, while up to 80% reductions in outdoor air fuel consumption provide healthy returns for the life of the HVAC system, according to Pargeter.
Energy recovery wheels may also be used to improve the efficiency of relatively new HVAC systems by up to 40% with one- to three-year paybacks when supported by the local utility. They also can help retailers with their environmental initiatives.
“Energy recovery wheels enable building owners interested in marketing green, healthy buildings to increase outdoor air levels above minimum code, earning LEED points and reducing the risk of indoor air quality complaints,” Pargeter explained.
Energy recovery wheels work by transferring energy by rotating between outdoor air and exhaust airstreams to transfer heat and moisture from one airstream to the other.
The total energy saved depends on the wheel’s effectiveness and the difference in temperature and humidity between the two air streams. A bigger differential drives larger energy savings.
How to stop the retail executive exodus
Compared with most other industries, retail companies face shorter time horizons and tighter metrics. The pressure to perform is great, which perhaps explains why many retail firms are having trouble holding onto their top executives.
For example, one major U.S. retailer recently suffered the departures of a senior marketing executive, a division president and another executive VP, all within the space of a few months. One of those executives had lasted only five months, while another had a tenure of less than two years.
This high turnover problem goes right to the top of the retail executive ranks. A recent study (2011 Russell Reynolds Associates U.S. Retail CEO Study, “A Perfect Storm: CEO Succession Challenges in Retail”) of more than 80 major U.S. retailers with more than $1 billion in annual revenues found that retail CEOs were 80% more likely than their Fortune 1000 CEO peers to leave within two years of being hired.
How can the retail industry find a way to reduce executive turnover and improve retention? Here are five suggestions:
1.Make hiring decisions based on where the company is headed, not where it has been.
Operational excellence should be an important consideration in CEO succession, but it should not be the determining factor. Rapid technological change is pushing companies to reinvent their business models and rethink the way they reach customers. In this environment, it is crucial to have executives at the top who are willing to take risks, make mistakes and focus on top-line growth, even if such actions fly in the face of conventional operational excellence beliefs.
2.Realign the culture to embrace innovation.
Your best executives can have excellent alignment with your strategic goals as a retailer, but they will still end up exhausted and thinking about jumping ship if they have to fight constant battles with the corporate culture. Hiring an executive for his or her capabilities as a strategic thinker does not make sense if the overall organization continues to worship at the altar of operational excellence.
3.Build bridges; break down silos.
Retail companies want their leaders to be innovative, but most innovation requires the interplay of opinions, perspectives and ideas. When a work force is segregated into silos, there is little room or opportunity for innovation to take place.
One way to start breaking down silos is to make sure that leadership development tracks give executives a chance to experience both the functional and commercial side of the business. As long as silos are allowed to persist, they will impede innovation, causing frustration among creative senior leaders and ultimately making it harder to retain the sort of forward-thinking executives that companies need most.
4.Don’t ask an individual to move a mountain.
Individual leaders may be talented, strategic and creative, but they do not operate in a vacuum. Asking an executive to lead change in a static and entrenched organizational culture is like asking a single person to move a mountain northward when thousands of others are being paid to push the mountain in the other direction.
Yes, it is important for companies to have innovative executives in key positions, but it is equally important to develop governance structures, systems and processes to support these executives, foster a culture of debate, and encourage calculated and strategic risk-taking.
5.Make sure HR has a seat at the table.
Beyond showing that the CEO understands human capital is a strategic concern, having an HR representative on the top leadership team gives companies an opportunity to map out the organization’s talent demands several years into the future. This talent map gives companies the ability to build, develop and recruit leaders whose skills, temperament and vision match the company’s own culture, strategy and objectives.
Christine Rivers is a VP and leader of Hay Group’s Leadership and Talent practice for the Retail sector. Hay Group is a global management-consulting firm.