News

Shopko looks into store space, market baskets

BY Dan Berthiaume

Green Bay, Wis. – Shopko Stores is looking more closely into how it uses store space. It’s also looking more deeply into customer’s market baskets.

The retailer has renewed its license of APT’s Test & Learn and Market Basket Analyzer software for another three years.

Additionally, Shopko has decided to license APT’s Space Planning Optimizer software. Using APT space planning software, Shopko was able to quantify incremental margin opportunities from modest space changes. The software also prioritized the stores where the retailer would generate the largest impact from space changes. Another benefit recognized was that the software helped identify new store clustering opportunities, as well as optimized pre-determined store clusters.

“Shopko is making efforts to continue to localize and tailor our assortment for our customers,” said Russ Steinhorst, Shopko’s CFO. “We recognized the opportunity to leverage APT’s Space Planning Optimizer as a way to accelerate and advance our capabilities to achieve our goals of having more tailored assortments and customer shopping experiences in our different markets,”

In addition to licensing APT’s Space Planning Optimizer software, Shopko is extending its Test & Learn and Market Basket Analyzer licenses. Test & Learn helps Shopko evaluate and design key strategic and operational initiatives, while Market Basket Analyzer software helps the retailer automatically synthesize transaction-level data to rapidly identify which items to promote, which to bundle, which to cut, and more.

“Whether informing SKU rationalization decisions, designing promotional bundles, or determining which products are true traffic drivers, we use Market Basket Analyzer to get a more holistic picture of each item, including the typical purchase behavior and customer loyalty associated with that item,” said Tom Abbott, senior VP at Shopko. “We are very excited to continue our relationship with APT and to leverage Test & Learn and Market Basket Analyzer to quantify and optimize the customer value of our strategic decisions and initiatives.”

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Walgreens Boots names new CAO

BY CSA STAFF

Walgreens Boots Alliance has hired a former controller at American Express as its next accounting chief.

The company has named Kimberly Scardino as its new SVP global controller and chief accounting officer.

Scardino joins Walgreens Boots Alliance from American Express Company, where she was SVP business advisory controller. Prior to her current role, she was SVP and Americas controller from June 2012 to March 2015. Previously, she served in roles of increasing responsibility since 2006, including VP global head of SOX Compliance and VP chief accounting officer of American Express Credit Corp.

Scardino also served in accounting functions at Credit Suisse Group from 2004 to 2006, and at Lyondell Chemical Company from 2002 to 2004. She started her career at Arthur Andersen, where she was an auditor from 1994 to 2002.

Scardino reports to George Fairweather, EVP and global CFO.

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Now Trending: Designs of the Times

BY Roy Higgs

“Now Trending” is a new exclusive online series to chainstoreage.com, featuring trending topics that impact the retail real estate landscape.

In recent years, a very old practice has gotten some new attention: design is once again ascendant in the world of commercial development.

While design never went away, of course, the degree to which great design is being prioritized, cultivated and integrated into the development of memorable spaces and places is noteworthy.

This resurgence of creative and engaging design concepts is in part being driven by industry trends and financial motivations and by new competitive pressures and marketplace dynamics. But fundamentally, the driving force behind this greater emphasis on and appreciation for outstanding design stems from its ability to influence the customer experience.

That experiential element encompasses much more than just the immediate experience of moving through and being in the project — it also filters out to influence activities like marketing, programming and special events, and influences everything from brand perception to the coordination of multi-channel retail initiatives. It makes it possible for retailers and property owners alike to leverage the place itself as an asset.

In an increasingly competitive marketplace, design can be a difference-maker. Consequently, many owners and operators of retail and mixed-use projects are actively seeking out proven expertise in developing or redeveloping projects.

Understanding how this greater emphasis on design influences the customer experience and filters through every step in the development and operation of commercial environments is an important prerequisite to understanding how the industry is evolving today and where it is headed in the future.

The experiential differential
The notion of a sense of place is not new. But the industry’s understanding of the degree to which design plays a vital role in creating and promoting a memorable and engaging sense of place has certainly deepened in recent years. It is a shift that is not just evident in site plans, but in the language we use to describe today’s commercial developments. Words like placemaking have established itself in the development lexicon, and experiential is no longer an eccentric affectation, but is instead one of the most important adjectives that can be used to describe a commercial environment.

In a way, the term lifestyle center — while out of fashion today — accurately captured the industry’s conceptual evolution of retail and mixed-use developments: from utilitarian places designed to facilitate purely commercial transactions, to more active and engaging destinations, where the commercial component is just one color in a spectrum of uses and experiences.

The importance of great design in today’s commercial development industry is based on the very simple truth that where you are has a direct bearing on what you do and how you feel. Design is both the prism through which customers view their environment and also an active agent in shaping the experiences they have within that environment. In other words, quality design is not passive: it actively celebrates and promotes interactions and social opportunities. It engages and draws you in. It is not just something to look at — it is something to experience in the truest sense of the word. The end result, of course, is something very tangible: a commercial engine where visitors who are enjoying themselves stay longer and spend more money.

Brand new
It is clear that design plays a critical role in helping to define and maintain a center’s aesthetic and experiential identity. What is even more appealing, for retailers and landlords alike, is the degree to which great design can unlock new opportunities to establish and enhance branding power. Great design extends well beyond the physical environment and extends into the brand itself, which is reinforced through special events and amenities that are available at a center. Centers use the built environment as an asset: a selling point that can be leveraged to great effect for promotional purposes or to establish leasing traction. Great design even provides opportunities to complement online initiatives by providing attractions, promotions and special events in the physical environment that sync up with those in the virtual world.

The inevitable explosion of pop-up retail and pop-up food and beverage shops is another prime example of using the built environment as an asset to define spaces and draw large crowds. These mobile hubs add a level of exclusivity and sense of renewal to a shopping environment where consumers can experience a fresh approach to a traditional way of doing things. Although planned, pop-ups offer a spontaneous experience consumers crave.

As developers consciously include open spaces and green spaces for yoga practitioners or outdoor retailers, the coordination and connection between tenants, programming and design becomes more evident. The notion that it is not so much the building themselves that are important as the spaces between the buildings is clearly illustrated here. Brick-and-mortar is, after all, an inanimate backdrop that sets the stage for the real show. The best stage sets are those that allow the actors to shine. Because it is not buildings and blueprints that resonate, but it is human activity that truly defines a space.

This shift in perspective has led to some profound changes in the way the industry approaches design and development. Retail developers today are not only thinking about design more often, but they have completely turned the traditional design paradigm on its head. In the past, design was often in the way. Developers had very specific ideas, and often felt as if they were limited by the demands of major anchors. Now, with growing appreciation for engaging design and an industry where the influence of the mega anchors is waning for a multitude of reasons, design is taking its rightful place at the head of the table. Instead of an obstacle, it is seen as an opportunity.

Today, the overriding goal is to create better places — and the demands and priorities of individual tenants are secondary. A rising tide of experiential design lifts all retail boats.

Competition, convergence and context
In today’s increasingly competitive environment, design can be a differentiator. But great design does not happen in a vacuum, it is dependent on context, tenancy issues, usage considerations, local market conditions and project-specific variables. Which is why high-quality commercial design is still more art than science.

Interestingly, for all of the progress that U.S. developers have made in recent years, the most exciting design-driven developments are still taking place overseas. With the convergence of retail types and with high quality retail space at a premium in many markets, design will likely become, if anything, even more relevant and important going forward.

Design may be difficult to quantify. But the reality is that as the influence of design becomes better understood, and as outstanding design elements continue to create spaces, places, experiences, impressions and interactions that drive traffic and make memories, it will become even clearer that design is not just valuable — it is invaluable.

Ultimately, design is not a trend — it is a truth.


Roy Higgs, FRICS, is founder of Roy Higgs International, LLC, an extensive network of specialists providing development consulting services — including design and planning — for retail, entertainment, leisure/resort, office, residential and mixed-use projects in cities across the United States and around the globe. To learn more, visit Royhiggsinternational.com or connect with Roy at [email protected].

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