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Signage Trends

BY Laura Klepacki

Signage continues to gain importance in overall branding efforts, as retailers seek to differentiate themselves with signs tailored to local markets and to create department ambiance. And increasingly, there is a lot more participation by marketing and advertising departments in developing signage programs.

“It is not just the construction or store planning departments anymore,” said Tony Camilletti, executive VP, D/Fab, Madison Heights, Mich.

Advancements in printing techniques have made available a wide variety of materials, helping retailers in their efforts to closely match signage to the store or department image.

“We are seeing the blending of graphics and signing become a key branding element within a space, versus just being a means to tell you where the restrooms are or what is down the aisle,” Camilletti added. “And the elements can be permanent or easily changed out to update as the brand is evolving.”

When it comes to retail sectors, “supermarkets and the food industry are still the pioneers and risk-takers,” Camilletti said.

“They take advantage of their space as a canvas to display, communicate and embellish what the brand is about through color, material, texture and lighting,” he added.

At Whole Foods Market, the signage is designed to reflect each store’s locale, creating a strong sense of place. In the company’s new Detroit store, the bakery header is made up of a series of raw metal conduits, recalling the tail pipes suggested by the famous “Motor City” moniker. The sign in the cheese department features a corrugated metal background, and is designed to recall urban graffiti. (The “Cheese” sign and corrugated metal bulkhead were designed by the store’s design consultant, JGA, Southfield, Mich., and refined and fabricated by D|Fab, which manufactured and installed the store’s interior decor and signing.)

“Whole Foods really celebrates the idea of being local,” Camilletti said.

Digital Solutions

Interest in digital signage solutions has exploded in recent years.

“Digital is now on everybody’s drawing board in some respect,” said Scott Jeffrey, chief creative officer, Interbrand Design Forum, Dayton, Ohio. “It depends on how adventurous you are as a brand for how far you go.”

Some brands are looking to digital tools for flexibility with price promotional messaging at the shelf, Jeffrey said, and “to have more latitude to attract attention in the aisle.”

Kohl’s, for example, has installed digital signs that display prices and discounts on fixtures and racks. The technology is also in pilot in supermarkets, drug stores and convenience stores.

“I think the next frontier is for stores to have a digital experience and a physical brand experience at the same time,” Jeffrey said. “There is some magic in that.”

Ridgeland, Miss.-based C Spire Wireless, for example, has introduced a new area in its new generation stores called Engage, an information hub with interactive high-definition screens. Customers can use the touch-screen displays to learn about the company’s reward program and products or tap into its community forum.

Innovations abound. In Japan, select fashion retailers have begun using the TeamLabHanger from Japanese tech firm TeamLab. The hanger has a sensor that triggers a related video on a nearby wall when it is lifted off the rack.

Brazilian fashion retailer C&A has introduced a high-tech hanger with a built-in digital display that shows the number of Facebook “likes” the garment has received. The counters, powered by the retailer’s website, are updated in real time to reflect the input of C&A’s Facebook fans.

Laura Klepacki is a contributing editor for Chain Store Age.

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NRF predicts 4% holiday sales increase

BY Dan Berthiaume

Washington, D.C. – The National Retail Federation (NRF) expects holiday sales to increase 3.9% to $602.1 billion, up slightly from last year’s 3.5% increase. The forecast is higher than the 10-year average holiday sales growth of 3.3%.

The group noted, however, that its forecast hinges “on Congress and the Administration’s actions" over the next 45 days as the government shutdown entered a third day

“Our forecast is a realistic look at where we are right now in this economy, balancing continued uncertainty in Washington and an economy that has been teetering on incremental growth for years,” said NRF president and CEO Matthew Shay. “Overall, retailers are optimistic for the 2013 holiday season, hoping political debates over government spending and the debt ceiling do not erase any economic progress we’ve already made.”

The NRF says that economic variables including positive growth in the U.S. housing market and increased consumer appetite to buy larger-ticket items give retailers reason to be cautiously optimistic for solid holiday season gains.

However, much remains up in the air, including fiscal concerns around the debt ceiling and government funding, and income growth, as well as policies and actions surrounding foreign affairs, all of which could impact holiday sales. According to NRF, the holiday season can account for anywhere from 20%-40% of a retailer’s annual sales, and accounts for approximately 20% of total industry annual sales.

In addition, NRF expects retailers to hire between 720,000 and 780,000 seasonal workers this holiday season, in line with the actual 720,500 they hired in 2012, which was a 13% year-over-year increase from 2011.

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E-Commerce Impacts DCs

BY Tripp Eskridge

Distribution centers have evolved alongside trends such as just-in-time manufacturing and the rise of overnight shipping. Now they are changing again, this time to accommodate omnichannel consumers.

One of the most prevalent trends is the move to larger centers. New warehouse facilities of more than 250,000 sq. ft. — called “big box” buildings — are today designed and built to accommodate both e-commerce fulfillment operations and traditional store distribution operations under one roof. The need to serve both stores and e-commerce operations from a single location requires additional space for staging different processes.

For example, fulfilling traditional store orders means the distribution center receives and ships large volumes of product at one time. To serve e-commerce customers, the facility must be designed to ship single packages, like a single dress. And many times, orders include individual shipping and packaging instructions, personal notes and even personalized giftwrap.

The new crop of omnichannel-oriented centers also reverses a long-term distribution trend by requiring more people. Technological advancements have made inventory and order processing an increasingly automated system in store-oriented distribution centers, which have become larger while requiring fewer people to run them.

But that level of automation has not caught up to the e-commerce fulfillment world, where an order may include one flash drive rather than a case of them. Picking several of these small items, packaging them and in some cases giftwrapping items is not a process that traditional distribution operations are equipped to handle.

These overarching trends — larger, more complex centers with more people populating them — result in other design changes as new DCs come out of the ground, including:

• More parking: The labor-intensive picking and packing process to fill online orders means more parking for employees, which in turn necessitates a larger overall site.

• Higher ceilings: Standard ceiling clear heights in distribution centers increased from 18 ft. some 25 years ago to 32 ft. about five to 10 years ago as the two limiting factors — racking technology and fire protection systems — improved to allow the higher ceilings. Today, technology readily permits clear heights of 36 ft. to 40 ft., enabling significantly more inventory to be stored in a smaller footprint. That’s an important factor for omnichannel retail distribution, given the larger space needs of facilities and surface parking, as well as the desire to be close to urban centers, where large sites can be costly or simply unavailable.

• Mezzanine spaces: New buildings can typically accommodate two or even three levels of mezzanine for picking, packaging, gift wrapping, returns and other back-office tasks. The extra mezzanine levels also provide a strong driver for higher ceiling clear heights.

• Life systems upgrades: ESFR fire protection systems, driven in the past by inventory, must be geared primarily for employees. New designs must also consider evacuation methods for larger numbers of employees, many working on mezzanine levels.

• HVAC and lighting: In newly built facilities, the omnichannel trend dovetails with another mega-trend in real estate development — the focus on energy efficiency and sustainability. DCs seeking to reduce energy costs are investing in LED lighting for cold storage, efficient HVAC systems, solar power systems and photo sensors that adjust electric light levels based on the available amount of natural light. Prismatic skylights that diffuse sunlight across a wide area for maximum daylight harvesting are ideal for a DC’s large footprint.

• Employee comfort, safety and productivity: HVAC systems are not just geared to lower energy costs, but also occupant comfort and safety. Night purge ventilation ensures high air quality; LED lighting in dock areas ensures appropriate light levels for reading documentation; and more stable temperatures result in environments that maximize worker productivity.

Tripp Eskridge is senior VP at Jones Lang LaSalle, overseeing the firm’s national industrial project and development services practice.

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