Target Goes Next-Gen
In its most ambitious store redesign to date, Target Corp. will debut its next-generation format in October, in a 124,000-sq.-ft. store in Richmond, Texas. The new prototype is designed for flexibility and convenience, and will offer open sight lines and elevated product presentations. It also comes with a variety of timesaving features, physical as well as digital.
In addition, 40 additional Target stores will receive elements of the redesign when they are updated, also in October. And there is more to come.
“The new design for this Houston store will provide the vision for the 500 reimagined stores planned for 2018 and 2019, with the goal of taking a customized approach to creating an enhanced shopping experience,” said Brian Cornell, chairman and CEO of Target, which will spend billions of dollars over the next three years to revamp and reposition its stores.
In a bid to making entering and exiting more convenient, the Houston store will have two separate entrances: one for shoppers who are time-pressed and only looking to buy a few items or pick up an online order, and another for people who want to leisurely shop.
The entrance for folks in a hurry will offer fast access to grocery, a wine and beer shop, self-checkout lanes and a dedicated order pickup counter, all within steps of each other. Reserved parking spaces will be located outside this entrance, allowing Target associates to deliver online orders to customers in their cars.
In another timesaving move, Target store associates will be equipped with new technology — available in all stores this fall — to search inventory, take payment from a mobile point-of-sale system and arrange delivery, all from the sales floor.
Other features of the new design include:
- Modernized design elements, with glazed, large glass windows at the storefront, stenciled concrete floors, and unique lighting throughout;
- An upgraded grocery department, with wood grain fixtures and increased fresh produce and grab-and-go options and meal solutions;
- Elevated, cross-merchandise product presentations that encourage browsing and are designed to amplify Target’s exclusive assortments across apparel and accessories, home, jewelry and beauty; and
- Curved, more circular center aisles that feature merchandise displays to engage shoppers “with compelling products in unexpected places,” according to Target.
In addition to its redesign initiative, Target plans to open more than 100 small-format stores during the next three years, primarily in dense urban neighborhoods and college campuses.
Designing Safe Stores for Shoppers
Retailers continue their efforts to step up design investments to improve the customer experience, but they should also focus on investing in customer safety.
That message was driven home during the SPECS session, “Safe Stores: Design Ideas to Help Customers Feel Safer” Speaker Andrew McQuilkin, retail leader at BHDP Architecture, explained that recent “active” shootings — when individuals actively attempt to harm people in confined, populated areas — have targeted formerly “safe areas,” including malls.
As these incidents proliferate, “people are becoming hyper-sensitive about their surroundings,” McQuilkin told attendees. “In some cases, incidents are fostering different behavior among shoppers — including their transition to online shopping so they can avoid malls altogether.”
Rather than lose customers to a fear of the unknown, the industry should be making it a priority to create safe spaces — stores as well as the overall mall — that are not only attractive, but make shoppers feel comfortable when they visit.
To successfully create safer spaces, retail teams must adopt new design and operational strategies. Here are some of the recommendations McQuilkin outlined:
Designate safe places, procedures
Whether designing concrete bomb shelters or dedicating a discrete location in the back of the store, retailers need to designate areas where they can “hide and protect” customers, if necessary. To ensure that customers feel safe and keep shoppers calm during an incident, members from merchandising, operations, loss prevention and other lines of business must also collaborate to create safety measures that keep shoppers and associates out of harm’s way. Store-level staff must also be trained on how to execute this plan.
The ability to “see and be seen”
Clear sightlines are crucial. Stores must give shoppers visibility to exits as well as the paths to find them. McQuilkin highlighted the value of installing ceiling-to-floor windows at gas station convenience stores, a move that gives shoppers inside and outside of the store visibility to their surroundings. Other retailers are breaking down the walls that separate specific departments inside of stores, making exits easier to locate.
Intuitive in-store navigation
“When shoppers feel lost, they don’t feel secure,” McQuilkin explained, suggesting retailers need to adopt designs that create intuitive navigation. This could be as simple as adding distinct statues or other structures or landmarks that make it easy for shoppers to locate a mall entrance, their car in the parking lot, or even simply meet up with people. Also, avoid confusing room design symmetry, whereby everything looks the same. Try to keep exits and service elements just off the main circulation.
Foster sense of “serve and protect”
Another way retailers can help shoppers feel safe is through security. Knowing someone is paying attention to who is in the store can be a comfort to shoppers and a deterrent to those with ill intent. The ideal team is not just uniformed guards. Some security personnel may be visible on the sales floor, while others patrol the floor in plain clothes. Also, more may be in the back monitoring surveillance equipment.
Create an “escapist” experience
Shoppers used to visit the mall to socialize with friends, and unwind from daily stresses. However, active shootings and other terrorist acts are playing on shoppers’ fears — an issue that is causing some customers to curb mall visits.
“Fear starts in shoppers’ subconscious,” he said. “Leverage strategies that invite shoppers to your property. Focus on creating a destination that delivers beauty and fun, and allows shoppers to relax.”
At the same, he added, focus on the strategies that will simultaneously create a safe place for shopping.
Inland’s Deal Machine Rolls On
Given the success of this year’s Fastest-Growing Acquirers, it’s understandable to think the process seems simple. Well, it’s not as easy as it looks, warned G. Joseph Cosenza, president of Oak Brook, Ill.-based Inland Real Estate Acquisitions. Quality must meet opportunity and yield, he said.
The grocery-anchored center remains as strong an investment as ever, Cosenza said. An Inland fund that’s dominated by grocery-anchored projects (approximately 80%) has 95% occupancy. Supermarket renewals are resulting in rent increases of 10% and higher.
“I do not have any fears in my grocery leasing,” Cosenza said. “I will put Publix and Kroger against anybody.”
But finding quality for future center acquisitions can be a challenge. Over the past 24 months, Cosenza and his two acquisition specialists reviewed some 5,750 deals across all sectors — and that figure excludes those that the group instantly knew wouldn’t fit their criteria. Of those, Inland made offers on 877 deals, and only purchased 116. For retail, Inland reviewed 2,333 properties over the past two years, made offers on 402 deals, and purchased just 73, dropping Inland from its usual spot in CSA’s top five list of acquirers. But only temporarily.
“Prior to July when Treasury and swap rates were at their lowest, people were buying more than they used to. After July, there was a huge drop-off,” Cosenza said. “In July, the 10-year Treasury was at 147 basis points. Today, it’s 100 basis points more. The same is true for swaps, which was 137 and is 100 basis points more now. That confuses a lot of people and stops them in their tracks. It causes disruption, and I love it. It gets some of them out of my way.”
That same disruption will be felt for owners of the CMBS debt coming due from 2007 and early 2008; they may not be able to refinance the same sums as underwriting standards have tightened and interest rates have risen, Cosenza added.
“I do expect to see more and more coming on stream,” though quality and the ability to add value will remain an issue, Cosenza said. “And I will have a big smile on my face.”