Doughnuts may be required to spend some time in the proofer, but when it comes to sustainability, the proof is in the doughnuts, at least those that are served at a growing number of Dunkin’ Donuts 18,000-plus locations.
The rise of Dunkin’ Brands sustainability initiative was presented by the company’s senior director of global design and construction services, John Herth, and director of corporate responsibility, Christine Riley Miller, at the SPECS session, “Sustainability the Dunkin’ Brands Way.”
At the end of 2014, the company launched Dunkin’ Donuts (DD) Green Achievement, a certification program specifically designed for new Dunkin’ Donuts locations. It provides franchisees with an option — but not a requirement — to engage in a measurable sustainability and energy-efficient program.
As to why the company created its own program, the answers are varied. Not only did the company feel existing certifications are challenging, but it also wanted something that would be Dunkin’ specific and create excitement for franchisees. It also wanted to be able to implement the program with no third party involvement.
BENCHMARKS: Franchisees participating in the DD Green Achievement program are given five benchmark categories with certain requirements, as well as optional compliance strategies. The key focal areas are site development, store efficiency, healthy indoors, sustainable operations, and innovation and community.
Store efficiency requirements include LED lights, high-efficiency HVAC equipment and low-flow water fixtures. Optional strategies include exterior LED lights, effective lighting controls, non-potable water use and exhaust controls.
The benefits of the program include those that are good for the environment (such as reduced energy and water usage), and those that are sweet for the franchisees, namely utility cost savings, potentially increased profits, and the customer good will that results from a demonstrated commitment to sustainability. (Dunkin’s certified locations display a DD Green plaque that notes the store’s achievement in energy reduction and sustainable design.)
Session Spotlight: Building in Canada
Canada represents a dynamic market for U.S. retailers looking for store expansion opportunities. However, before opening Canadian stores, companies must first learn the unique challenges and requirements of doing business within the borders of their northern neighbor.
“Target didn’t perform due diligence on doing business in Canada or what the Canadian consumer wants,” said Dan Wisk, VP facilities and construction at Hertz Corp., and moderator of the SPECS session, “Oh Canada: Design and Building Challenges.”
As a result, Target struggled to gain a foothold in Canada and, in January 2015, announced it was exiting the market, shutting all of its 133 Canadian stores. In contrast, Wisk said, Nordstrom has successfully opened stores in Canada.
“Nordstrom used a measured, controlled approach and is doing well,” he noted.
Wisk noted that Kohl’s has not bid on Target’s Canadian stores, which he called a conscious decision due to the difficulties in marketing in Canada.
According to Wisk, marketing and promotion laws are more stringent in Canada, with limitations on how often items can be on promotion or on sale.
A number of other Canada-specific retailing challenges exist, as well. These include the requirement that any architect, general contractor or other consultant used in the design or building of a Canadian store be licensed in Canada, even if they are U.S.-based. In Canada, architects are licensed by province. Some states have reciprocity agreements with some provinces that will streamline the licensing of architects.
Marissa Sidel, president of National Dispatch Services, a Canadian facilities maintenance specialist, said the knowledge base of U.S. professionals does not always translate to Canada.
“There is specific knowledge and experience required in Canada, depending on the type of units you want to develop,” said Sidel. “You should consider associating with a licensed professional in Canada.”
Other idiosyncrasies of Canadian laws and regulations that can impact retail include the lack of a national standard on disability access.
“There is no Canadian federal law comparable to the Americans with Disabilities Act,” said Sidel. “There are more than 20 federal laws mentioning disability, as well as provincial laws and building codes. There is a patchwork of regulations that touch on disabilities, which are enforced by private lawsuits.”
Consequently, Canadian stores need to be approved by an inspector to ensure they comply with provincial laws and regulations, Sidel advised. Also, each province has its own specifications.
BUILDING CODES: Furthermore, Canada lacks a national building code. Building codes are regulated by individual provinces, with local municipalities often enforcing provincial codes.
“There is a model building code, which is not law,” explained Sidel. “Provinces can adopt the model code as is or modify it. For example, in Toronto it can take eight to nine months to get a plan approved with permits, at a cost of about $21,000.”
While there are entities in Canada that will take payments to expedite approvals and permits, Sidel warned attendees that they must make sure any payments are legal and part of the approval process.
Sidel left attendees with some concluding advice for their Canadian store projects.
“Know the provincial regulations,” she said. “Use partners in the province. Use a customs clearance house, who are experts with contacts at all points of entry. Have your paperwork. When doing construction for the first time, understand what you will need in the future. Use local suppliers.”
Session Spotlight: Reinventing Brick-and-Mortar
Brick-and-mortar stores are in transition from being viewed as a relic of the 20th century to being understood as the linchpin of 21st century omnichannel retailing. In the SPECS session “Reinventing Brick & Mortar Retail,” speaker Nadia Shouraboura, founder and CEO, Hointer Inc., explained just how wide-ranging that transition will be.
“The next 10 years will see more profound change in store design than we’ve seen in the last 1,000 years,” said Shouraboura.
A Russian native who served as technology VP, global supply chain and fulfillment platform at Amazon.com before launching specialty denimwear retailer Hointer in 2012, Shouraboura kicked off the session by describing the state of retail in the communist Russia of her youth.
“You would come into the store and nothing would be on the shelves,” she said. “You would stand in line, wait, and they would bring out something and you would take home as much as they would let you. If you live without it, you have a deep appreciation of retail.”
Armed with this appreciation as well as first-hand expertise with the online shopping experience, Shouraboura launched a store concept that would combine the ease of e-commerce with the touch, feel and personal experience of the store. Using proprietary technology, Shouraboura has turned Hointer stores into mobile showrooms where customers encounter an uncluttered, minimal merchandise display.
“We took piles of items and moved them to the back,” said Shouraboura. “We left one of each item on display and made the store a showroom. It opened phenomenal opportunities.”
Using their mobile devices as what Shouraboura termed the “remote to the store,” customers scan proprietary tags that allow them access to more detailed product information and also let them order as many different variations of the item as they choose for try-on. Merchandise is automatically delivered to the fitting room, where customers can order additional garments and also automatically return items they don’t want.
Shoppers can perform self-checkout with their mobile device, and premium shoppers can simply leave the store with the items they want automatically tracked by their tags and charges applied to a credit or debit account on file with Hointer. Sales and customer satisfaction are up, while returns and shrinkage have dramatically gone down.
The back-end benefits are even greater. The cost of cleaning fitting rooms and shelves is drastically reduced, and store associates have time to become “style consultants” who actively help promote sales.
In addition, Hointer gains insight into what items convert well from the fitting room, allowing the retailer to adjust store layout and merchandising to boost try-on rates. It can also determine if certain items sell well to a specific type of customer, allowing them to boost in-store sales with highly targeted promotions and selling. This insight also allows demand-based selling and replenishment.
“We have a long way to go from today,” concluded Shouraboura. “The front [of the store] must be redesigned. Having space allowed me to be creative. I added more selection without having to add inventory.”