DESIGN/CONSTRUCTION

Report: Urban Outfitters going bigger with Anthropologie

BY Marianne Wilson

Urban Outfitters is going against the smaller-is-better footprint trend and experimenting with larger-sized stores for its Anthropologie brand.

The retailer is testing four “ultimate experience” Anthropologie stores, ranging in size from 20,000 sq. ft. to 30,000 sq. ft., Women’s Wear Daily reported.

The latest location to feature the expanded format is the brand’s recently expanded store in Portland, Oregon. The 25,000-sq.-ft. store includes such extras as 12 full-scale living room, dining room and bedroom displays, and a design center where customers can get expert advice.

It also features special limited-edition collections and an extensive selection (300 plus styles) of footwear and more than 800 bath, body and beauty items.

Urban Outfitters’ Free People division is getting a slightly larger box, with its footprint expanding from some 3,500 sq. ft. to 4,000 sq. ft. The brand will open 12 stores this year, with the majority in the larger format, the report said.

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C-SUITE

Amazon could prevail in Target non-compete dispute

BY Mike Troy

Photo: Arthur Valdez

Former Amazon executive Arthur Valdez is scheduled to start a high-level supply chain job at Target next week, but a lawsuit by the online retailer could prevent him from doing so while having a chilling effect on other retailers keen to poach talent from Amazon.

Several published reports on March 22 indicated that Amazon had filed suit seeking to block Target’s hiring of Valdez as the company’s new executive VP and chief supply chain and logistics officer. The hiring of Valdez, a 16 year Amazon veteran, was announced on Feb. 29. He is scheduled to join Target on March 28, reporting to COO John Mulligan, and seen as playing a key role in Target’s efforts to grow its online business.

The suit alleges that Valdez, who also previously worked at Walmart and Kmart, “cannot lead Target’s supply chain operations without referencing confidential information learned and developed by him at Amazon to drive superior performance in exactly the same areas.”

There could be some merit to that claim and if Amazon prevails its victory would not be without precedent. The best most recent example of a retailer blocking a former senior executive’s desired career path involved Walmart and CVS. In November 2010, Hank Mullany resigned from his role as president of Walmart’s northern U.S. division. A month later, CVS announced plans to hire Mullany as president of its pharmacy business.

At the time, Walmart was developing new small format store that contained a pharmacy and a drive through window – not unlike a traditional drug store. Walmart sued CVS claiming Mullaney’s hiring violated his non-compete agreement because the executive possessed intimate details about the retailer’s overall strategy and plans for the new format, which at the time was viewed as promising driver of growth for Walmart.

Walmart prevailed in the matter and Mullany ended up becoming CEO of ServiceMaster for two years until he left to become president of Toys “R” Us. He left the toy retailer last year and now leads his own consulting company advising private equity clients on acquisitions. Meanwhile, in an ironic twist, Walmart earlier this year announced plans to close all of the small format stores, known as Walmart Express, that it opened after scuttling Mullaney’s effort to join CVS.

Valdez’s aspirations to join Target, are reportedly barred by an 18 month non-compete agreement about. Mullany had a two year non-compete that precluded him from working at a competitor with annual sales greater than $5 billion. Inclusion of the annual sale stipulation in the non-compete agreement helps explain why a high-powered former Walmart executive like Duncan Mac Naughton, who once served as chief merchandising and marketing officer for the world’s largest retailer, recently accepted a position as CEO of Mills Fleet Farm, a privately held operator of 35 stores. Mac Naughton’s non-compete agreement with Walmart will lapse this November.

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News

Millennials to require omnichannel store reconfiguration

BY CSA STAFF

Brick-and-mortar retailers are on notice – shifting customer demographics will require far-reaching redesign of the physical store by 2025.

According to a new study from technology market intelligence firm ABI Research, millennials are driving a revolution in how stores use technology to provide a shopping experience.

"Millennials play a large role in the in-store shopping revolution, as their smartphones are basically an evolutionary extension that the retail industry has yet to catch up with," said Patrick Connolly, principal analyst at ABI Research. "The conceptual battle between brick and mortar versus online is dead. All retailers must become omnichannel and harness the power of the smartphone by developing next-generation, personalized experiences."

As retailers do not only have one type of shopper, ABI recommends stores leverage technologies such as beacons, camera analytics, VLC cross-platform media streaming, and Wi-Fi. Using the smartphone as a platform then creates a new way for retailers to personally engage and target customers, while also opening a new advertising revenue channel.

In addition to installing in-store technologies such as beacons, ABI also advises brick-and-mortar retailers to upgrade and aggregate data across all physical, online and mobile outlets. This allows a holistic understanding of the customer, which in turn enables personalized offerings, streamlined processes, and new customer services.

Once retailers combine data with innovations around inventory, POS systems, and online information, ABI says there a multiplier effect on the functionality and ROI retailers obtain from their technology investments.

"The retail industry is notoriously slow at embracing new technology, but CEOs should view early adoption as a huge opportunity to rejuvenate their brand, while establishing themselves as industry disruptors," said Connolly. "By 2025, we will be exposed to a new shopping world in which the value of a physical store will no longer be measured in sales, queuing will not exist, any surface will be a storefront, customers will be able to find and buy any item at any time, and clothing will be shared, tried on virtually, and printed at home. The path to the future should start today for smart retailers.”

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