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Session Spotlight: New Areas of Focus in ADA Compliance

BY Marianne Wilson

ADA lawsuits against retailers are on the rise — and even though many suits may be without merit, a retailer still has to defend/answer the allegations.

That was the message Joan Stein, one of the nation’s leading authorities on ADA, brought to the SPECS session, “ADA Non-Compliance: Can You Afford It?” at SPECS.

There was a 63% surge in the number of ADA Title III lawsuits filed against public accommodations in 2014 over 2013. California was at the top of the pack, with Florida on its heels. And the game-changer, according to Stein, is that many other states, such as Pennsylvania, New York and Ohio, are catching up.

The ADA celebrated its 25th anniversary in 2015, and, over time, new areas of focus have caught the interest of advocates as technology has created new concerns. The new areas drawing attention include POS (touchscreens, kiosks and the like), ATMs and retail websites.

“Although these areas aren’t written into the ADA Standard for Accessible Design, the U.S. Department of Justice and courts are ruling against business for these elements if they are not usable by individuals with disabilities,” Stein said, adding that the primary disability in question with these elements is visual impairment.

Stein had some advice for the retailers at her session.

“If you have an IT department, talk with them about modifying your website,” she advised. “The lawsuits filed in this area are really ramping up.”

Indeed, the DOJ is putting pressure on businesses to make their websites accessible even while it is drafting proposed regulations for such sites, with the regulations coming out in June.

The bottom line, according to Stein, is to integrate ADA compliance into everything you do.

“If you are remodeling a particular space, for example, you can’t just look at the space, “she said. “You also have to make sure the path of travel to that accommodated space is accessible.”

There has been significant growth in “drive-by lawsuits” focused on exterior areas and parking lots, including, in some case, exterior signage. Such suits, which are filed as class action suits, have become a focus of advocacy groups and lawyers.

“Their next focus will be websites,” Stein predicted.

FINANCIAL IMPACT: DOJ fines have increased, with the first violation now at $75,000. All subsequent ones are $155,000 each. And there is the potential for compensatory and punitive damages.

“And certain states have additional damage awards, Stein added.

For instance, under the California Unruh Civil Right Act, a plaintiff is entitled to recover actual damages and an amount up to three times the actual damages for each violation of the Act.

There are also remediation costs to consider. On average, total costs to comply with ADA standards for barrier removal will run small firms from $82,449 (for a typical restaurant) to $275,375 for a small firm hospital building.

“And remember: There is no grandfathering under the ADA,” Stein said.

Stein offered some simple advice for retailers to mitigate their risk and stay ahead of the curve with regard to ADA compliance:

• Design it right;

• Construct it right;

• Maintain it correctly. For example, don’t let associates move things into the path of travel; and

• Document it.

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WWW.Brick-and-Mortar.COM

BY Jeff Green

At a time when more and more online retailers are successfully expanding to brick-and-mortar locations, it’s worth taking a moment to examine how those brands are approaching the site selection process. The specific and strategic considerations that online retailers review when assessing possible brick-and-mortar locations not only tells us a lot about what’s behind that thought process, but provides important hints about the priorities and perspectives shaping retailer behavior in an increasingly omnichannel world.

It shouldn’t surprise anyone that it all starts with the customer. The vast majority of online retailers moving into brick-and-mortar spaces appeal to a younger demographic (their success has been built in online and mobile, where shoppers tend to skew younger). With that in mind, decisions about where to begin taking a virtual business to physical storefronts boils down to two questions: Where are those consumers living, and where are those customers shopping?

While the first question is fairly straightforward, the second is a little trickier. Fortunately, online retailers have a resource that many smaller brick-and-mortar retailers and start-ups don’t: a sophisticated understanding of who their customers are. This deep knowledge includes everything from where they live and what they buy, to surprisingly detailed consumer profiles. While supermarkets, drug stores and other large retailers with robust customer loyalty programs collect similarly detailed customer origin data, online retailers can do so with relative ease — simply because of the realities of online shopping.

Those psychographic and demographic profiles make it possible for online retailers to glean enormous amounts of information from a simple ship-to address, and they also make site selection a more precise and targeted exercise. It’s all about the data — information that enables retailers to separate good locations from not-so-good options. And it’s clear that many online retailers have concluded that the right location for them is typically not “the mall.” Brands like Warby Parker, Athleta and Amazon Books have chosen their initial brick-and-mortar sites in locations calculated to appeal to younger shoppers.

Athleta has mostly chosen to take non-mall sites, either in lifestyle centers or street retail locations. Warby Parker is very focused on street retail, working to emphasize the brand’s destination status. Amazon Books’ first location was in University Village, an open-air lifestyle center in Seattle, and while its second is slated for a traditional mall location (Westfield UTC mall in San Diego), that store will be optimally positioned opposite an Apple store and next to a Tesla store.

While age and income play a role in site selection, perception is also a factor — specifically, the desire to be perceived as something different or special. And while demographic and psychographic data is useful, another important consideration for virtual retailers looking to plant their brick-and-mortar flag is the strength of their existing business in the market. Online retailers’ brick-and-mortar iterations consistently perform best in locations where they already have a strong online presence — and they are understandably leery of opening store locations in areas where they don’t have strong brand recognition. On one level this may seem a little counterintuitive, but strong brand recognition is the best way to establish brick-and-mortar traction, and initial forays into brick-and-mortar cannot afford to underperform.

Additionally, while some online retailers may have initially looked at brick-and-mortar as a novelty — or as a showcase for their online marketplace — they quickly recognized that boosting brand recognition from an established brick-and-mortar presence subsequently increases online sales. This creates a positive reinforcement loop, where multiple channels of distribution create a kind of 1+1=3 effect. Perhaps nobody knows that better than catalog retailers, which have a third channel to consider. One of the first retailers to leverage this strategy effectively was Talbots, which had a strong catalog business and made a point to open stores where catalog sales were highest. A more contemporary example is Sundance, currently rolling out the third leg of its multichannel operations by expanding into brick-and-mortar.

Ultimately, this speaks to a larger truth about today’s evolving retail marketplace: To be competitive, retailers must be effective multichannel operators. Creative relationships are forming between traditional and online retailers — cultivating new and different mechanisms for traditional retailers to establish their omnichannel credentials. I’ll explore those dynamics in my next column on chainstoreage.com.

Jeff Green, president and CEO of Jeff Green Partners, combines more than 30 years of retail industry experience to provide comprehensive consulting services to national retailers, developers, shopping centers and healthcare facilities. The firm specializes in shopping center feasibility, distressed center repositioning, retail real estate planning and investing, medical retail consulting, retail expansion planning, location analysis, commercial land use and urban redevelopment. Visit jeffgreenpartners.com or connect with Jeff at [email protected]

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Connecting with Millennials

BY Katherine Boccaccio

The generation born between the early 1980s and the year 2000 — labeled millennials — has captured the collective attention of retail marketers. And not just because there are more than 80 million of them, although that’s a factor. This group craves access, not necessarily ownership, and they have a real affinity for technology, which is shaping the retail space.

Chain Store Age talked with Michael Puline, senior VP leasing, Mid-Atlantic and Southeast, for DLC Management Corp., about how to connect with this influential generation from a shopping center owner’s perspective.

What are the five top ways to connect with millennials?

If you look at the successful companies and brand experiences that millennials grew up with — such as Apple, Starbucks and Forever 21 — you can get a small glimpse into this group’s expectations. My top five “connecting principles” would be:

1. Convenience: It needs to be fast for millennials. They want technology to save them time and effort. It must work for them, not for you (the brand).

2. Simplicity: Gone are superfluous things that don’t add real value.

3. Value: It needs to be affordable and within their general reach. That’s not to say they won’t sacrifice for something they really want — they will! But, it needs to have an inherent perceived value.

4. Fashionable: It needs to look good and be cool. If you don’t have the “it” factor, it’s not high on their “must-have” list. And that’s for everything they touch, whether it’s a shopping destination, a restaurant or a retail brand.

5. Experiential: Experience is something that has been talked a lot about over the last 10 years, especially for retail real estate. The truth is that experience has always been important. It’s just that people now are more focused on creating the environment in which people want to buy versus have to buy. Millennials have primarily grown up in “the want,” so experience is oftentimes even more important to them.

Do you believe millennials’ digital nature will impact brick-and-mortar retail?

Absolutely. The digital world is being overlaid on top of the physical world. We will always have retail stores and malls, but our interaction and experience with them will be radically changed — they will look different and we will shop and eat at them differently.

I visited China recently and was absolutely amazed at how advanced their digital/physical interaction is, especially compared with other countries. I was eating at a restaurant in a mall when an announcement was made over the loud speaker instructing diners to log into their WeChat Group (similar to our Facebook) where eight winners, selected at random, would be announced and those diners would receive a discount on their meal. I didn’t win, but it was amazing to see hundreds of people using the same social media app in a restaurant simultaneously, connected both physically and digitally.

Your portfolio focuses on grocery-anchored centers. Are grocers evolving marketing strategies toward millennials?

We are seeing it with all of our retailers, grocers included. Look at all of the capital they have invested over the last 10 years in technology, value and convenience. Their business is being transformed, and the ones that are adapting are winning. A few good examples are Cartwheel by Target, Kroger offering digital coupons and even stores accepting Apple/Samsung Pay directly from smartphones.

How is DLC connecting with millennials?

DLC is connecting with millennials by adding a significant number of them as team members, especially over the last five years. If you want to connect with millennials, you need them to be an active part of your organization. What’s more, you need to put them on teams and projects where they can utilize their strengths.

We have seen tremendous positive outcomes from our millennial team members as they helped champion and implement several technological changes over this past year, in particular. A good example is our recent CRM upgrade. We had a committee of about a dozen people internally working collectively for over a year. The millennials on the team helped enormously by pushing the conversation from what we want now to what we want next.

At our properties, it’s often our millennial leasing folks who have pushed to create significant positive changes at our properties. Last year a millennial team member added our first Zipcar, and it was so successful that we have now already expanded it. They can help champion new and innovative marketing practices to target a younger demographic. If you want to connect with millennials, you need them on your team.

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