In the Spotlight: LEDs
A stellar retail panel — Mark Friedman, manager of retail facilities, Coldwater Creek; Eric Johnson, director of store planning, design and construction, Brookshire Brothers Ltd.; and Bob Valair, director of energy and environmental management, Staples — shared first-hand accounts of their LED deployments and plans going forward at the SPECS session, “LED Lessons Learned, Strategies for the Future.”
Brookshire’s Johnson said the use of LED lighting has reduced maintenance and the related cost burden while creating crisp, consistent lighting in the freezer cases. Brookshire also employs LEDs outside the store, in building signs and pylon signs and in parking lot lighting.
“LED lighting has improved visibility in our parking lots,” Johnson said, “and enhanced our brand image with bright, uniformly lit signage.”
Johnson told attendees Brookshire’s current standard for new stores, remodels and maintenance replacements includes using LEDs for gas station canopies, parking lot lights and site lighting, signs, all refrigerator cases, walk-in coolers and freezers, any lighted decor and specialty lighting.
“As to what’s next, we are researching using LED on the general sales floor in two new small-format stores that are currently under construction,” Johnson said.
Staples’ Bob Valair discussed the office supply retailer’s LED strategy, which includes applications in stores, building signs, parking lot lighting, security lighting, wall packs, dock lighting and coolers.
LED lighting has provided Staples with an array of benefits, from reduced energy savings to brighter, crisper light to the flexibility to place the light where you need it. And the long life of LEDs has resulted in reduced maintenance costs, Valair noted.
With so many LED companies marketing products, Valair advised attendees to do their homework before deciding on a supplier and product.
“Talk to those you trust,” he said. “Do your research, test and ask hard questions.”
In the Spotlight: Technology
Technology is no longer the sole province of “IT geeks,” or even marketers and finance executives — it is also now a focal point of such operational departments as store planning, energy management, construction management and real estate.
In recognition of the huge impact technology is having on store operations, SPECS 2014 held a series of hands-on tech boot camps, with the first one devoted to design, development and facilities, the second to operational technology, and the third to social media trends and tools.
Fujitsu provided attendees the use of Stylistic hybrid tablet computers, allowing them to interactively participate in the solution demonstrations. The company’s VP global retail software solutions, Rowan Cape, demonstrated Fujitsu’s tablet-based POS system.
Other sessions included Bryan Sartin, director of the RISK team at Verizon, who emphasized that data security is everyone’s business, including departments such as maintenance and energy management that don’t typically interact with sensitive customer data. Given that the infamous Target data breach originated with a cyberattack on a third-party HVAC vendor, the message was timely.
In addition, Patrick Blattner, chief product data officer of WirelessWerx, showed attendees the iInside indoor location services “footprint tracking” solution that monitors in-store traffic via customer mobile device. Todd Walls, CIO, Buxton, demonstrated how Buxton’s SCOUT touch solution provides demographic analysis for targeted store siting.
Other speakers included James Chambers, East Coast regional manager of Bluebeam Software, who walked attendees through the features of the interactive Bluebeam Revu PDF editing, marketing and collaboration technology.
Brian Lutz, marketing services manager of CBL & Associates Properties, helped attendees set up live Twitter accounts and experience the power of social media communications first-hand.
One of the most fascinating aspects of our ongoing economic recovery is the paradigm shift with respect to commercial development priorities. In the wake of the recession, new development has largely taken a backseat to redevelopment as developers and retailers alike have set their sights on opportunities in core urban markets that have been historically underserved.
Before the downturn, we saw a large number of new retail projects planned in suburban or exurban areas. In fact, the “boom” mentality had taken hold to such an extent that many of those developments were planned assuming future population growth — the retail was there before the “house-tops,” and before the market could really support it. In retrospect, it seems clear that building the top floors of the house before the foundation was bound to catch up with the industry. Sure enough, when the recession hit, not only had many of those projected households never materialized, it seems clear that in many cases, they never will.
At the same time, many brands have been downsizing and experimenting with smaller and more efficient formats and floor plans. In other words, they are moving toward the store footprints and merchandising concepts that succeed in city centers. That gets us to what I see as perhaps the biggest factor of all: opportunity. Even today, many urban areas are significantly under-stored and under-retailed. Think about the astonishing fact that, for several years, Detroit had no chain grocery stores! This in a city of over 700,000 people.
Put all of those elements together — suburban overexpansion, recession, smaller formats — and it’s not hard to see why urban redevelopment seems to be gaining momentum.
While, to some extent, larger forces have encouraged this change in focus, there is no doubt that retailers and development professionals deserve some credit for their willingness to adapt and evolve. The one-story big-box formula has given way to a wide range of new formats and concepts, almost all of them smaller and ready-made for a more urban context.
This creativity and downsizing has led to multi-level urban Target stores, new Walmart locations in Washington, D.C., and the much-discussed opening of a new Whole Foods in Detroit. In the case of the Detroit Whole Foods, the chain not only went with a smaller store size, but also with a more edited and strategic merchandise assortment specifically designed to meet the needs of a market with a larger daytime population. Since its opening in June 2013, the store has exceeded the company’s expectations and shown the consumer appetite for what some may see as a counterintuitive location choice. It is encouraging to watch retailers challenging their own assumptions about what works and where it can work, and realizing that they can be successful appealing to new demographics.
The result of this redevelopment focus is that we are seeing a true revitalization of underserved markets (even in areas where retail selection has been so poor for so long that many urban residents were essentially forced to shop in the suburbs). Together with the improved mass transit facilities in many cities, this can form the beginning of a redevelopment “cascade”: retail and residential and infrastructure working together in a self-reinforcing cycle. With more demand — and more retail resources to meet that demand — the potential is there for long-term positive impact on the urban core.
My takeaway from all of this is that, on the whole, we are not necessarily over-retailed. It’s more about certain categories and locations and formats that may have been overdeveloped. That said, I don’t believe that chains will add stores in a healthy way without a clear strategic approach. The continuing success and growing popularity of new urban store concepts and redevelopment opportunities makes me think that retailers will need to continue to be more data-driven, thoughtful, and flexible with respect to their expansion plans.
Jeff Green is president of Phoenix-based Jeff Green Partners, specializing in retail real estate feasibility, retail expansion planning and market analysis. His regular Chain Store Age column, Retail Rap, can be found on chainstoreage.com/real-estate.