CSA Jan/Feb 2025

Store Expansion Update January/February 2025

2025 Tech Trends Exciting New Builds

RETAIL PIONEERS

Leaders that shaped the industry

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from the editor’s desk

tech viewpoint: a retail tech column

Contents VOL. 100 JANUARY/FEBRUARY NO. 1

COVER STORY

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RETAIL PIONEERS: Profiles of 20 leaders who altered the retail landscape and transformed the way Americans shop

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CEO shakeups in 2024.

STORE SPACES

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Store Spaces: Q&A with Scopes Facility Services’ Kevin Williams discusses retail FM trends.

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From discounters to specialty merchants, retailers continue to invest in store growth.

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How potential tariffs could impact retail budgets

23 Leaders that shaped the industry

Trending Stores: Puma goes big in Las Vegas with a 25,000-sq.-ft. on the Strip.

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CSA (USPS 054-410; ISSN 0193-1199), is published bimonthly by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 225, Chicago, IL 60631, on a controlled basis to qualified retailer titles and architects. Real estate and shopping center owners and developers $69 per year. All other non-qualified in the United States: $88 one year; $171 two year; $15.60 single issue copy; Foreign: $127 one year; $237 two year; $17.60 single issue copy. Digital edition subscription: $50 one year digital; $96 two year digital. Periodicals postage paid at Chicago, IL and additional mailing offices. P ­ OSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, 8550 W. Bryn Mawr Ave, Suite 225, Chicago, IL 60631. Subscription changes may also be emailed to contact@chainstoreage.com, or call 1-877-687-7321. Vol. 100, No.1, January/February 2025. Copyright ©2025 by EnsembleIQ. All rights reserved.

Contents VOL. 100 JANUARY/FEBRUARY NO. 1

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REAL ESTATE

TECH

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31

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A look at seven new projects and revamps underway

Retail Leasing Frenzy: Jared Rothkopf of Polsinelli law firm discusses the state of lease negotiations during a time of low space availability and rising rents.

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Retailers are scrambling for Class A retail space.

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AI “co-piloting and automated delivery are among the tech trends to watch in 2025.

A look at how Ulta Beauty is using technology to enhance the member experience of its loyalty program.

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The spotlight was on AI and RFID at NRF 2025: Retail’s Big Show event.

SUPPLY CHAIN

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Five factors that will shape the evolution of supply chains in 2024.

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FROM THE EDITOR’S DESK

100 Years and Counting The year 2025 is a very special one for all of us here at Chain Store Age as it marks our 100th year of publication.

One hundred years — a century — is a long time for anything. But it’s especially true in the world of business and retailing, where the only real constant is change.

Very few companies — with notable exceptions —can lay claim to having successfully sustained operations for 100 years. We are proud to be among them.

Chain Store Age published its first issue in January 1925. Automobile ownership was limited but growing rapidly. Mom-andpop stores still proliferated but the clock was ticking. Apart from the department store emporiums in the major cities of the growing nation, stores were small and the merchandise selection was limited.

However, things were changing fast.

Chain Store Age was created to report on what was, in 1925, a still somewhat rare but fast-growing retail format: chain stores.

Industry experts trace the birth of the chain store back to 1859, when the Great Atlantic & Pacific Tea Company (A&P) set up shop in New York City. F. W. Woolworth, the innovator of variety stores (or five-anddimes as they were called) opened his store in 1879.

But it was in the 1920s that the chain store format really took off, with the growth most dramatic in variety stores and grocery retailing.

The history of the past 100 years of chain stores — or, better put, the past 100 years of retail given how the format would soon dominate the entire industry — is

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chronicled in the archives of Chain Store Age. From the opening of the first “modern” supermarket to the rise of mass discounters such as E.J. Korvette and Kmart to the e-commerce boom, CSA hasn’t missed a beat. And despite all the changes and disruption, the basic underlying goal of retailers of all stripes — to sell goods to consumers — has not changed in 100 years.

Similarly, Chain Store Age remained steadfast in its commitment to be the leading provider of retail news and analysis for retail executives. And while our methods of delivering the news have grown to include everything from daily electronic newsletters to real-time breaking news alerts, our pledge to serve our readers with trusted information is the same as it was 100 years ago.

Chain Store Age will be celebrating its 100th anniversary with special features throughout the year, both in print and online. To kick things off, we decided to take a look at 20 leaders who, over the past century, altered the retail landscape and transformed the way people shop. (Our story, “Retail Pioneers: 20 Leaders That Shaped the Industry,” starts on page 8.)

Picking 20 retail pioneers was not an easy task — compiling subjective lists of anything is almost always open to opinion and uncertainty.

In making our selections, we had one major requirement: the person’s impact had be felt beyond the borders of their particular company. (The person also had to start or join the business from 2025 on, which left off some key folks in the history of chain retailing, including Charles Walgreen, who opened his first store in 1901.)

Our list is not comprehensive. And some may disagree with our picks. As always, your comments and suggestions are welcome!

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COVER STORY

20

RETAIL PIONEERS

Leaders that shaped the industry

By Marianne Wilson

C

hain Store Age is celebrating the beginning of its centennial year with a look at 20 visionary retailers who, over the course of the past 100 years, left an indelible mark on the industry, leaders whose impact extended far beyond the doors of their own company. They are innovators who led their companies into new areas where others have followed, trailblazers whose whose contributions redefined the retail experience.

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DON FISHER The Gap

To a very large degree, the idea of denim as essential fashion came out of one man’s frustration over not being able to find the right pair of jeans In 1969, San Francisco real-estate developer Don Fisher visited various department stores in search of jeans. Unhappy with the choices, Fisher, who had no retail experience, and his wife opened a small shop in 1969 in San Francisco. It was called The Gap (short for Generation Gap).

Aimed at teens and young adults, the store stocked every size, cut and style of men’s Levi’s jeans, along with records and tapes. (Women’s merchandise was later added to the mix.) It was a revolutionary concept at the time as stores carried only the most common Levi’s sizes and a narrow selection of styles. A shop dedicated to the most casual and the most basic of clothing was an anomaly.

Business boomed and in 1974 the Fishers launched the Gap label. The former real estate man developer charted an aggressive path in expanding Gap nationwide. The company Fisher built from the ground up would grow into one of retail’s first dominant specialty and mall brands.

Fisher was among the first to popularize affordable and quality mass private-label fashion, as well as being one the first retailers to target teens. But his most-lasting legacy may be that he helped change the way Americans dress. (1928-2009)

JEFF BEZOS Amazon

When Amazon first launched in 1994, a bell would ring in the fledgling company’s headquarters in Seattle every time an order was placed. Within a matter of weeks, the bell was ringing so frequently as the orders came in that employees had to turn it off. It was a harbinger of things to come.

Starting with an online bookstore, Jeff Bezos would go on to jumpstart and revolutionize e-commerce with a virtual store boasting a larger inventory — and lower prices —than most physical stores. Driven by an unwavering obsession to always put the customer first, he transformed the way consumers shop and interact, online and in physical stores. In so doing, he created a trillion-dollar global behemoth that affects the daily lives of most consumers.

A risk-taker and disruptor since day one, Bezos’ willingness to invest in long-term infrastructure (even in the face of losses) focus on constant innovation created new benchmarks across nearly aspect of retail. His belief that speed and reliability were critical to customer satisfaction led to such offerings as Amazon Prime, which launched in 2005 offering free two-day shipping for an annual membership fee. It proved to be a game-changer, driving customer loyalty and raising the bar for delivery speeds across the industry.

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COVER STORY

CHARLES LAZARUS Toys“R”Us

Charles Lazarus embodied all the qualities on which the retail industry is built: entrepreneurship, creativity and innovation. The original Toys“R”Us kid, Lazarus helped pioneer the big-box movement when he opened a “toy supermarket” back in the late 1950s.

The World War II veteran cut his teeth in retail in 1948, when he opened Children’s Bargain Town in Washington, D.C. It sold baby goods with a few toys in the mix. He thought the timing was right — a post-war baby boom had set in.

As toy sales increased, Lazarus increased the assortment and his vision grew bigger. He got out of the baby goods business when he realized that toys were a more lucrative market — especially when it came to repeat customers. He opened his first location under the Toys“R”Us banner in 1957. The large, supermarket-style store was piled high with the latest toys and games. Complete with shopping carts, it was like no other toy store in America.

The company grew fast, opening cavernous stores across the country. Its growing scale gave Lazarus the power to negotiate contracts and buy toys for less than his competitors.

Lazarus revolutionized the toy industry with Toys“R”Us’ cookie-cutter uniformity, one-price discount policy and deep inventory. His business model become the template for a new retail format: category killers, big stores dedicated to one category. (1923-2018)

SAM WALTON Walmart

Considered the most successful and astute merchant of his time, Walton founded Walmart with a single store in 1962, in Rogers, Ark. By 1991, the chain had passed Sears, Roebuck & Company — a retail Goliath in its day — to become the nation’s largest retailer, with its rapid growth driven by everyday low prices and high sales volume. Today, 90% of the U.S. population lives within 10 miles of a Walmart.

Walton created Walmart with an idea — dismissed by most other retailers at the time — that large discount stores could thrive in small towns and rural areas. His strategy involved aggressive store expansion and high sales volume which allowed the company to negotiate favorable prices with suppliers, further lowering costs.

Also key to his strategy was a focus on efficiency, particularly in the supply chain. Under Walton’s watch, Walmart was far ahead of its competitors in developing a cutting-edge logistics network, which gave it a big advantage over other merchants. even helping to put some of them out of business.

Perennially at the top of Forbes magazine’s annual list of America’s richest people), Walton was famously thrifty and unassuming. On his many trips to visit Walmart stores (where he was called Mr. Sam), he rented subcompact cars and stayed at budget motels or in the homes of store managers.

Weeks before he died in 1992, Walton was awarded the Presidential Medal of Freedom, the nation’s highest civilian honor, and hailed as “an American original” who “embodies the entrepreneurial spirit and epitomizes the American dream.”

Walton created a company that would grow to become the largest retail company in the world and the largest private employer in the U.S. In creating the retail giant, he also reshaped the model for discount retail as we know it today.

(1918-1992)

LES WEXNER The Limited

Lex Wexner — the man considered by many industry experts to be the father of modern apparel specialty retailing — got his start in 1963 when, using a $5,000 loan from his aunt, he opened a store at the Kingsdale Shopping Center in Arlington, Ohio.

He called it The Limited to reflect the limited amount of merchandise it carried (mostly young women’s tops and pants). It was the beginning of a global retail empire that would grow to encompass apparel, lingerie and beauty brands, some of which Wexner developed, some of which he acquired. (At its height, the company had 11 different banners under its umbrella, including Victoria’s Secret which he bought for $1 million .) When he stepped down in 2020, he was the longest-serving CEO of a Fortune 500 company.

Wexner was among the first merchants to grasp the importance of niche retailing and vertical integration. He developed a vast network of suppliers in foreign countries that could manufacture goods inexpensively under his own private label, allowing The Limited to respond to the latest fastest trends with a speed that — in the chain’s glory days — its competitors could not match.

A master of branding, Wexner also helped revolutionize specialty store design, blending ambience, merchandise and décor into powerful brand statements.

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COVER STORY

MAXINE CLARK

Build-A-Bear-Workshop

Maxine Clark wasn’t looking for the next big thing in retail when she went on a shopping trip in 1996 with her 10-year-old next door neighbor.

The young girl wanted a Beanie Baby, small plush toys that were riding a wave of popularity at the time. When they couldn’t find the one she looking for, the girl said it might be easy to make the plush collectible at home. A light bulb went off in Clark’s head. A year later, the first Build-A-Bear-Workshop opened its doors.

The idea of an interactive and hands-on experience in a brick and mortar store where customers could make their own personalized stuffed teddy was unusual to say the least. It had no template. Clark drew on the 19 years she had spent in various executive roles at May Department Stores and also from global field trips and travels to Disneyland. She envisioned the store would be like a theme park factory in a mall. It would be fun, interactive and personal all at the same time.

There was a line outside the door when Build-A-Bear Workshop made its debut, at the St. Louis Galleria. The founder put up her own capital to launch the concept. Investors soon followed.

Credit Clark for not only creating a retail phenomenon, but for pioneering a concept that that is more relevant today than when she first opened shop: interactive experiential retail.

HOWARD SCHULTZ Starbucks

Unlike in Europe and the Middle East, drinking coffee as a social activity was never really a “thing” in the U.S. — until Howard Schultz came along.

As the leader of Starbucks, Schultz transformed the notion of a coffee shop, making it not just a place to pick up caffeine but also a place to hang out and even work. But his most remarkable accomplishment was the transformation of a commodity into something more akin to a cultural phenomenon. By expanding the appeal of coffee with all sorts of fancy brews, Schultz essentially created a new retail product category.

In 1981, Schultz walked into Starbucks’ shop in Seattle’s Pike Place. A year later, he joined the four-store company to lead operations and marketing. On a visit to Milan in 1983, Schultz was captivated by the country’s coffee bars, which could be found on almost every block. More than just serving espresso, the bars served as meeting places for the locals.

The visit inspired Schultz to bring a similar concept to America. But Starbucks’ owners were resistant to the idea, so Schutlz left the company in 1985 and started his own coffeehouse chain. Two years later, he bought Starbucks and merged it with his company.

Under his leadership, Starbucks launched an aggressive strategy that focused not only on premium coffee beverages, but creating a ‘third place’ between home and work. Other retailers have followed his example, adding dedicated spaces in their stores where customers could lounge and relax with a beverage. The success of Starbucks would also lead to the growth of regional specialty coffee chains across the country.

HARRY CUNNINGHAM Kmart

Before Sam Walton, there was a retailer named Harry Cunningham, who pioneered the concept of discount mass merchandising on a national scale at Kmart. His foresight was evident early on when, as sales director of the famed S.S. Kresge Company in the early 1950s, he proposed that the variety store chain (or five and dimes as they were then known) use the same upfront checkout system that was gaining popularity in supermarkets.

Cunningham saw the light when he visited a new discount store, E. J. Korvette, in Garden City, N.Y. Convinced that discounting — low prices and margins with high-volume turnover in large stores — was the future of retail (and that the fiveand-dime business was on the way out) he proposed that Kresge start a new operation. The stores would be big and sell a wide variety of products at a discount.

Kresge bought into the idea and Cunningham started a new retail division that, in 1962, opened the first Kmart. Owing to Kresge’s resources, Kmart had expanded to 162 locations only four years later. Averaging 75,000 sq. ft. on one floor, the stores were enormous for the time and packed with merchandise.

Cunningham served as a role model for the founder of Walmart, who paid homage to the Kmart founder in his autobiography. Walton wrote that Cunningham “really designed and built the first discount store as we know it today.”

(1907-1992)

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I connect with existing vendors and potential vendors, and last year even secured a new partner.

Looking ahead to March, I am ready to gain more insight into retail construction best practices, new technology and of course, make some new connections!”

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COVER STORY

MARVIN TRAUB Bloomingdale’s

In the 1960s, Bloomingdale’s was anything but the epitome of luxury, style and glamour that it’s long been synonymous with. Instead, it was a stodgy family department store on the Upper East Side of Manhattan. Enter Marvin Traub, a visionary merchant who saw retail as theater and himself as the impresario.

Born in 1925 to an apparel executive and a Bonwit Teller saleswoman, Traub knew style when he saw it. He joined Bloomingdale’s in 1950, in charge of the bargain basement, and was named president in 1969 (and CEO in 1978.)

Traub revamped the Bloomingdale’s brand as he rose through the ranks, introducing up-andcoming designers such as a young Ralph Lauren. He staged fancy galas and exotic elaborately produced promotions that saluted the likes of China and France with exclusive, sometime rare merchandise and Broadway-like openings. He brought the same type of razzle-dazzle to store openings as Bloomingdale’s expanded.

Under Traub’s watch, Bloomingdale’s became a must-shop destination. Its repute was such that when Queen Elizabeth II had one day in the U.S. to commemorate the Bicentennial, she visited one store — Bloomie’s 59th Street Flagship.

Traub’s influence extended far beyond the confines of Bloomingdale’s. He brought an élan and sense of style to the store’s displays that continues to influence retailers. And his marketing prowess for image-making and creating brand buzz remains the gold standard. (1925-2012)

RALPH LAUREN Ralph Lauren Corp.

Without Ralph Lauren, luxury retail might have looked a lot different than it does today. Lauren opened the door to the high-end designer boutiques that populate today’s A-level malls and prime shopping streets when, in 1971, he became the first American designer to open a freestanding store, on Rodeo Drive in Beverly Hills, Calif. (In 1983, Lauren became the first fashion designer to launch a home collection in 1983.)

Lauren’s mastery of — and innovative approach to — in-store branding set new standards in the industry. He revolutionized retail by selling not just clothing but an entire lifestyle — one built on his vision of classic American style and spirit. His brick and mortar stores were, and still are, aspirational, creating a brand universe onto themselves and influencing retail design trends across the spectrum.

The iconic designer was a pioneer of story-driven retail experiences, a concept that has since been embraced by retailers high and low. He also paved the way for designer eateries as one of the first designers to open a restaurant, launching RL in 1999 next to his Chicago flagship.

GERALDINE STUTZ Henri Bendel

The “merchant princess” — as she was known in her heyday — transformed Henri Bendel in New York City from a carriage trade retailer in decline into a trendy emporium of new designer brands starting in the 1960s. In so doing, she also created a model that revolutionized the modern department store and retailing in general — one that is as strong today as it ever was.

It was Stutz who, as president of Bendel, revamped the main floor of the store into a series of small shops dedicated to exclusive goods, various brands and designers. A radical idea at the time, Stutz’s “Street of Shops” concept proved a big hit with shoppers. It also pioneered what would evolve into a prevalent industry trend: in-store shops.

Stutz is also credited with being the first to come up with the notion — now widely embraced by brands across the spectrum — that fashion was more than just clothing. It was about lifestyle, a reflection of identity, culture and values, encompassing everything from clothes to home décor.

(1924-2005)

SOL PRICE Price Club

If any retailer was aptly named, it was Sol Price, creator of a big-box format that reinvented value retail: the members-only warehouse club. His members-only warehouses had little-to-no visual merchandising or advertising, just low prices and friendly service. His vision spawned a $626 billion industry.

Price started his retail career in 1954, when he and several partners opened FedMart, a discount membership warehouse whose membership base was limited to government employees and their families.

The company was sold in the mid-1970s and Price lost his job.

Price and his son Robert launched Price Club in 1976. Located in a cavernous former airplane parts factory in San Diego, it sold varied goods from tires to books to food at vast discounts to business customers.

Its growth took off when membership was extended to the general public.

The format upending the traditional retail model — and not only in its membership fees. The choice of goods was limited, with merchandise stacked on tall, industrial-looking racks, with the items often still wrapped from the shipping containers. The stores were vast, with concrete floors and no décor.

By the time Price Club merged with competitor Costco in 1993, the membership warehouse club was on the way to becoming the global phenomenon it is today.

(1916-2009) 14

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COVER STORY

MEG WHITMAN eBay

A trailblazer for women in business, Whitman turned a small online auction platform into a global e-commerce juggernaut. When Whitman joined eBay as CEO in 1998, the startup company had revenues of about $4 million. She leveraged her experience in consumer brands (among other things, she managed the marketing of the Mr. Potato Head brand for Hasbro) to transform the site into the world’s largest e-commerce auction.

Under Whitman’s leadership, eBay grew from 30 employees to over 15,000, and the company’s user base surged from a few hundred to millions worldwide. By the time she stepped down in 2009, eBay’s revenue had soared to nearly $8 billion. Its success not only paved the way for the online marketplaces that flourish in today’s retail landscape, but also for the second-hand shopping revolution.

Whitman’s legacy in retail goes far beyond bidding-and-selling online. It includes the growth of other businesses under the eBay umbrella, including alternative payments company PayPay, which eBay bought under Whitman’s watch. It now holds 45% of the global payments market share.

Equally important, Whitman’s accomplishments at eBay paved the way for other women to take on leadership roles in the tech sector.

BERNARD MARCUS AND ARTHUR BLANK The Home Depot

The two men who transformed the home improvement retail landscape dreamed up their concept at a coffee shop in Los Angeles in 1978. Back then, the home improvement market was fragmented, with mostly small, locally owned stores. Sitting in the shop, Marcus and Blank envisioned something different.

In what’s been described as a corporate power move, the two had recently been fired from Handy Dan hardware chain, where Marcus was CEO and Blank was VP of finance. Looking to the future, they envisioned a one-stop shopping destination for do-it-yourselfers, one that would offer a huge variety of merchandise at great prices and boast a highly trained staff. As they saw it, the employees would not sell, but will be able to walk customers through most any home repair or improvement.

With help from investment banker Ken Langone and merchandising consultant Pat Farrah, Marcus and Blank opened the first two Home Depot stores in 1979, in Atlanta. The 60,000 sq. ft. warehouses dwarfed the competition and stocked 25,000 products — much more than any other hardware store — under one roof.

With its vast array of products, knowledgeable staff and “do-it-yourself” philosophy, Marcus and Blank created a retail giant that transformed the home improvement experience.

JOHN MACKEY

Whole Foods Market

John Mackey, the co-founder of Whole Foods Market, changed the way shoppers perceive — and shop for — natural and organic foods. In making natural groceries mainstream and available for the first time on a mass scale, he disrupted the grocery landscape.

The first Whole Foods opened in 1980, in Austin, co-founded by Mackey and several other local business folks who decided the natural foods industry was ready for a supermarket format. They didn’t know how right they were.

At 10,500 sq. ft., the original Whole Foods store was very large in comparison to the standard health food store of the time. And to appeal to a larger audience (and avoid some of the didactic penchants of natural food sellers ), it had a wider array of product.

The store was a sensation. Starting in 1984, the company began its aggressive expansion, with both new builds and acquisitions. The stores were sleek, attractive and increasingly sophisticated.

Mackey led Whole Foods as CEO for 40 years. During that time, he popularized the concept of high-quality, organic food with a focus on local growers, sustainable agriculture, healthy eating and ethical sourcing (all while growing a billion-dollar empire). Consumers took note and so did retailers. Today, even the most mainstream grocers tout organic foods and feature natural products in their mix.

MICHAEL CULLEN

The former A&P and Kroger manager was the founder of King Kullen Grocery Co., which industry experts — and the Smithsonian Institution — credit as America’s first supermarket.

While employed by Kroger in Illinois, Cullen wrote a letter to a Kroger VP describing a vision that would eventually revolutionize food retailing. He detailed a strategy that included “monstrous stores” that were about 40 feet wide and 130 to 160 feet deep,” had “plenty of parking space” and were 80% self-service (meaning shoppers could pick most items off the shelves). Low prices and cash sales were other parts of his formula.

The letter went unanswered so Cullen took matters into his own hands. In 1930, he opened King Kullen in the Queens borough of New York City. With innovations that included separate food departments, a parking lot, 10 times more products than other grocery stores and discount pricing on many items, the store was an overnight success — and the talk of the industry. Shoppers loved the convenience of having all their food needs under one roof — and they also loved the prices.

Cullen’s strategy of high volume at low profit margins, large stores stocked with a vast array of products and ample parking ushered in a grocery model that would go on to serve as a prototype for the modern supermarket. Amazingly, in an era of consolidation, some five generations later, King Kullen is still family controlled and operated. (1884-1936)

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COVER STORY

GORDON SEGAL Crate & Barrel

It began, fittingly, in a kitchen, where Gordon Segal and wife Carole were washing the dishes they had bought on a trip to New York. Such goods — simple, affordable and stylish — didn’t seem to be available near their Chicago home in 1962.

Inspired by their European and Caribbean travels, and figuring there were other young couples like them who had more taste than money, they decided to open their own store. The result not only changed how Americans buy dinnerware and other home items, but defined a contemporary style that has influenced other home furnishings stores from Arhaus to Pottery Barn to RH. The first Crate & Barrel opened in 1962, in an old elevator factory in Chicago’s Old Town neighborhood. The name was a nod to the upended shipping crates and barrels that were used to display merchandise.

The small store quickly created a buzz with merchandise that was not only affordable, but had a different look and offered a more modern alternative than the items available in conventional houseware stores. Instead of working with wholesalers like other retailers, Segal directly contacted small Scandinavian and European glassware and kitchen goods manufacturers.

Under Segal’s leadership, Crate & Barrel blossomed into a retail chain that would set a new tone for housewares and home furnishings, one that blended design, functionality and durability at low prices.

RAY KROC McDonald’s

Henry Ford didn’t invent the automobile — but he did create the most efficient way to make and market them. Similarly, Ray Kroc, the Henry Ford of food, didn’t invent the hamburger or the fast-food restaurant. But his innovations at McDonald’s changed the way most hamburgers are made and sold and globalized American fast food. He was a trailblazer in automating and standardizing operations.

When Multimixer salesman Kroc visited the original McDonald brothers’ fast-food restaurant in 1954 in San Bernardino, Calif., he saw the makings of a franchise empire based on speed, convenience and quality food. First opening franchises and then buying the company in 1961, Kroc standardized food offerings, sizes, packaging and even maintenance to create consistency and efficiency across the growing chain — ensuring that the french fries tasted the same regardless of the location.

Under Kroc’s leadership, McDonald’s redefined how Americans ate. His insistence on consistency, efficiency and innovative marketing made McDonald’s a household name and would go on to set the standard for the modern fast-food industry.

(1902-1984)

ROBERT WOOD Sears, Roebuck

One retired brigadier general in the U.S. Army is often called the forgotten man who changed retail.

In 1919, 40-year-old General Robert Wood joined Montgomery Ward. The business, a mail-order catalog at the time similar to its rival Sears, was almost entirely geared to the rural market.

Wood was offered a job at Sears, Roebuck. He took it on the condition that the company would let him open a store. In 1925, Sears opened a test retail store on the first floor of its Chicago mail-order plant. By the end of 1925, seven more stores opened. Three years later, Wood became the the president of Sears. By 1929, it operated more than 300 department stores.

Wood reinvented the notion of department stores which, back then, were located in the center of cities and dependent on public transportation. He was an early believer that the automobile would soon make outlying areas more accessible, broadening the customer base.

Wood opened Sears stores away from the old downtowns and near highways. The locations had free parking. And while the older department stores catered to women, Wood add menswear and other categories to the mix, including hard lines.

Sears would go on to become, in its heyday, the largest retailer in America. But its legacy is more than that: The company served as a model that would bring department stores into a new age.

(1879-1969)

CHAINSTOREAGE.COM

JANUARY/FEBRUARY 2025

17

C-SUITE

Retail’s Revolving Doors: CEO Shakeups

By Marianne Wilson

There were plenty of changes at the helm of U.S. retail companies in 2024. Here’s a review of the most noteworthy (listed in the month they were announced.)

DECEMBER

SEPTEMBER

■ Dollar Tree appointed interim CEO Michael C. Creedon, Jr. as permanent chief. He has served an interim chief since November, following the departure on Rick Dreiling, who stepped down for health reasons.

■ Claire Spofford has decided to retire as president and CEO of J.Jill. She is expected to remain in the role until April 2025.

■ Winnie Park was tapped as CEO of Five Below.

She joined the teen and tween extreme-value retailer from Forever 21, where she served as CEO since January 2022.

■ Former Nike executive Elliott Hill returned to take the reins of the athletic footwear and apparel giant, suceeding John Donahoe who had served as CEO since January 2020.

■ Tilly’s named Hezy Shaked, the company’s co-founder and executive chairman, as president and CEO. Shaked had been serving as interim chief since January, following the retirement of longtime president and CEO Ed Thomas.

■ Upon exiting from bankruptcy, Rite Aid tapped company veteran Matt Schroeder as its new CEO. Schroeder, who joined the chain in 2000, has served as CFO since 2019.

■ James Langrock was appointed CFO of 1-800-Flowers (effective Dec. 29), replacing longtime executive Bill Shea who is retiring

NOVEMBER ■ Tom Kingsbury said he would step down as CEO of Kohl’s Corp. effective Jan. 15, 2025, at which time he will be succeeded by Ashley Buchanan, who has served as CEO of Michaels Companies since 2020.

■ Kenneth (Ken) Seipel was named CEO of value apparel and home goods retailer Citi Trends. He has been serving as interim chief since June, following the departure of David Makuen

OCTOBER ■ RJ Sheedy stepped down as president, CEO and board member of extreme-value grocer Grocery Outlet Holding Corp. Chairman Eric Lindberg was appointed interim president and CEO. ■ James Conroy was named CEO of Ross Stores, succeeding 40-year company veteran Barbara Rentler, effective Feb. 2, 2025. Most recently, Conroy was CEO of Boot Barn, which appointed chief digital officer John Hazen as interim CEO. ■ Ken Hicks was named president and CEO of PetSmart, suceeding J.K. Symancyk who left to take the top role at Signet Jewelers. From 2018 to 2023, Hicks served as CEO of Academy Sports + Outdoors. He also served two stints as CEO of Foot Locker.

■ David Joyner was named president and CEO of CVS Health, replacing Karen Lynch who left the company “in agreement with” the company’s board.

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AUGUST ■ Victoria’s Secret & Co. appointed Hillary Super as CEO and a member of the board, succeeding the departing Martin Waters in both roles.

■ Laxman Narasimha was ousted as CEO of Starbucks Corp. after less than two years on the job. He was replaced by Brian Niccol, CEO and chairman of Chipotle Mexican Grill, which named Scott Boatwright, COO, as interim CEO. ■ Party City Holdco named Barry Litwin as president and CEO, succeeding Sean Thompson who has served as interim CEO since Brad Weston resigning shortly after the chain emerged from bankruptcy.

JULY ■ Petco Health and Wellness Company ended its search for a new chief executive by naming Joel D. Anderson to the role. He previously served as CEO of Five Below.

JUNE ■ Blain’s Farm & Fleet named Mark Hasting as CEO and president of the Midwest retailer. Jane Blain Gilbertson, current CEO of the family-owned business, will take on a new role as executive chair of the board.

■ Ryan Vero stepped down as CEO of Claire’s Holdings after serving in the role since July 2019.

Chris Cramer, COO and CFO, was named interim CEO.

MAY ■ Jane Elfers, president, CEO and board member of the Children’s Place exited the company under “mutual agreement.” She had led the chain since 2010. Board member Muhammad Umair was tapped as president and interim CEO. ■ At Home Group Inc. named Brad Weston as CEO. He succeeds longtime At Home chairman and chief executive Lewis L. (Lee) Bird III, who retired at the end of 2023. Weston previously served as CEO of Party City Holdings Inc..

APRIL ■ Jack Schwefel resigned as CEO of luxury apparel retailer Vince Holding Corp. David Stefko, current director and former CFO of Vince, was named interim chief.

MARCH ■ Kevin Plank, founder, executive board chair and controlling shareholder of Under Armour, returned as president and CEO. He replaced Stephanie Linnartz who took the reins of the company in February 2023 after more than 25 years at Marriott

FEBRUARY ■ Ron Coughlin stepped down as Petco’s chief executive, chairman and board member after a disappointing fourth quarter. The retailer named board member and former longtime Best Buy executive R. Michael Mohan to serve as interim CEO.

JANUARY ■ Kirkland’s named its first female chief executive. The home décor retailer promoted Amy Sullivan to CEO, suceeding interim CEO Ann Joyce.

■ Race Trac promoted a third-generation family member Natalie Morhous to CEO. Morhous, who served as president of RaceTrac since 2019, succeeds Max McBrayer, who departed after 32 years and served as chief executive since 2019.

JANUARY/FEBRUARY 2025

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STORE SPACES Q & A

Facilities Management Trends

Chain Store Age spoke with Kevin Williams of Scopes Facility Services about the trends impacting retail facilities management and the challenges FM managers face.

Kevin Williams is CEO of Scopes Facility Services

What trends are you seeing in retail facilities management?

In the world of retail facilities management, we see several exciting trends. One big trend is the push toward technology. We strive to be completely paperless, which helps our operations and accounting teams. It also helps us to measure KPIs correctly and provide our customers a better experience.

Our goal is to help optimize operations and maintenance, making everything run more smoothly and efficiently.

What are some of the biggest problem areas for retailers when it comes to maintaining their facilities — both inside and out?

Retailers face quite a few challenges when it comes to maintaining their facilities. One major issue is juggling the diverse needs of both interior and exterior maintenance.

This includes everything from cleaning floors and windows to landscape care and snow removal.

Another big challenge is staying compliant with various regulations and standards, which can differ depending on the location and industry. Plus, budget constraints often make it challenging to invest in necessary maintenance and upgrades.

What is the biggest misconception about facilities management?

A common misconception about facilities management is that it’s just about cleaning and maintenance. But there’s so much more to it. Facilities management includes safety and compliance, energy management and strategic planning.

Tell us about Scopes Facility Services and the main services it provides.

Scopes Facility Services is a top-notch provider of comprehensive interior and exterior facility services. Founded in 1988, Scopes offers a wide range of services, including janitorial services, landscaping, floor care, window cleaning, snow removal, HVAC and more.

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We are known for our reliable, high-quality services that consistently exceed expectations. Scopes serves over 20,000 locations nationwide, including some of the country’s largest retailers.

What about non-routine facility services — can Scopes assist in this area also?

Yes, Scopes can definitely help with non-routine facility services! In addition to regular maintenance, we offer specialty services and capital projects such as landscape construction and installation, concrete rejuvenation, remodeling and renovations, post-construction clean-up and debris removal. These services are perfect for addressing specific needs and projects that go beyond regular maintenance.

How has technology affected your business and offerings to customers?

Technology has had a huge impact on Scopes’ business and offerings. We use proprietary software developed in-house to manage and report on various aspects of facility services.

This tech integration allows for seamless communication with clients’ CMMS systems through APIs, enabling detailed project reporting, geo-tracking, proof-of-performance photos, and quality checks. This has greatly improved efficiency, transparency, and customer satisfaction.

What are the benefits of Scopes’ self-performing model?

Our self-performing model comes with several benefits. By employing a team of highly qualified technicians, we ensure consistent, high-quality service delivery. This model allows for direct control over service quality and responsiveness, reducing the need for third-party vendors.

Plus, the self-performing model helps Scopes build long-term relationships with clients, providing personalized and reliable service.

Can Scopes assist with remodeling and renovation projects?

Yes, Scopes’ capital projects team specializes in handling these types of construction projects. Our services encompass everything from complete remodeling to freshening up touch-ups. Also, our services have earned a reputation for reliability and high quality throughout the country, where we have a significant presence.

What specifics should retailers look for when hiring a facilities maintenance company?

Retailers should ensure that the facilities maintenance company they hire offers a complete range of services.

In addition, effective communication is essential from the start to the end of a project, as is the ability to provide quality assurance through inspection reports. A proven track record in servicing retail clients is essential, along with the ability to tailor services to meet specific needs.

Does Scopes offer nationwide coverage?

Yes, Scopes offers nationwide coverage. We provide routine and on-demand services to over 20,000 locations across the United States, ranging from Washington to Florida and California to Maine.

What advice do you have for retail FM managers who may be under pressure from corporate to cut their budgets … how can they best make their case?

For retail FM managers who are feeling the pressure to cut budgets, it’s important to demonstrate the value of facilities management to corporate.

Highlighting the long-term cost savings and benefits of preventive maintenance can be very persuasive, while at the same time emphasizing the importance of brand standards and ensuring the brand has a high-quality image.

JANUARY/FEBRUARY 2025

CHAINSTOREAGE.COM

STORE SPACES

Store Expansion Update

From discounters to specialty merchants, retailers continue to invest in store growth

By Marianne Wilson

D

espite a spate of store closing notices as the year ended, many retailers are continuing to invest in brick and mortar expansion.

Here’s a look at some of the companies with ambitious store opening and/or remodeling plans for 2025 and beyond. » Tractor Supply Company: The nation’s largest rural lifestyle retailer expects to open 90 namesake stores in 2025, along with approximately 10 new Petsense by Tractor Supply locations. Tractor Supply also increased its long-term store count goal to 3,200 locations, up from 3,000.

» Dutch Bros: The fast-growing drive-thru coffee chain is accelerating openings in 2025 to at least 160-plus sites and will further accelerate openings in 2026. The company has said it plans to operate over 4,000 locations in the next 10 to 15 years. » Trader Joe’s: The grocer’s website lists 12 locations as “opening soon.” Trader Joe’s is expected to announce additional planned store openings during the year.

» Boot Barn: The specialty Western and workwear chain plans to add 60 new stores as part of its goal to open 900 stores across the U.S. by fiscal 2030. As of the end of September, Boot Barn had approximately 425 stores.

» WH Smith PLC: The London-based retailer is doubling down on its airport travel shop business in North America, with plans to open about 60 shops in North America during the next two years. By 2028, WH Smith expects be operating around 500 stores, up from its current total of 341. (The total includes 256 stores in airports, 83 in resorts and two in rail stations.)

» Academy Sports + Outdoors: The sporting goods and outdoor retailer expects to open 20 to 25 stores in 2025.

» 7-Eleven: 7-Eleven has big plans for its “New Standard” store prototype, with plans to build 500 stores between 2025 and 2027.

» Dollar General: The discounter plans to fully remodel approximately 2,000 stores and remodel approximately 2,250 stores through Project Elevate and relocate approximately 45 stores. Its 2025 plans also include opening about 575 new stores in the U.S. and up to 15 new stores in Mexico.

» Target Corp: In January 2024, the company revealed plans to open 300 stores during the next decade. The projects range from full remodels to adding Ulta Beauty in-store shops, upgrading fixtures, supporting same-day services and more. Target expect to open about 30 new stores in 2025.

» Burlington Stores: The off-price retailer is opening 100 net new stores and is on track to meet —or exceed — its goal of 500 net new store openings for the period 2024 through 2028.

» Nordstrom Rack: The off-price division of Nordstrom will add 18 more stores to its portfolio and has already announced a 2026 location .

» Ulta Beauty: The beauty giant expects to open about 200 net new stores during the next three years. » Mango: The Barcelona-based global fashion retailer continues to expand its U.S. store footprint as it looks to open 20-plus stores. The expansion will see Mango opening its first-ever locations in Arizona, Connecticut, Louisiana, Ohio and Oregon. » Costco Wholesale Corp.: The membership warehouse giant plans to open 29 locations during its 2025 fiscal year (September through August). Of the new sites, 19 are in the U.S. CHAINSTOREAGE.COM

JANUARY/FEBRUARY 2025

» Ace Hardware: During the next five years, the hardware store retailer plans to invest more than $1 billion in opening new stores and remodeling existing stores, with its experiential store concept — Elevate3 Ace — at the heart of the investment. » Walmart Corp.: In January 2024, the retail giant said it plans to build or convert more than 150 larger-format stores during the next five years while also continuing its program to remodel existing locations.

Asian Imports National and regional retailers aren’t the only one expanding.

Korean-owned value retailer Daiso will continue to expand its U.S. footprint in 2025. The chain, which operated 167 U.S. sites at the end of last year, offers a wide selection of products across multiple categories, including home decor, kitchenware, beauty products, stationery and snacks, with many of the items featuring a Japanese aesthetic.

Miniso, a China-based value retailer best known for its intellectual property collaborations with globally popular licensed brands, is also continuing its rapid expansion across the United States. Miniso stores have dedicated areas for characters and brands, such as Disney, Sanrio, and Harry Potter. The merchandise runs the gamut from toys and stuffed animals to baby products and household items — and much more.

Another Asian import, toy and collectibles brand Pop Mart, is also opening U.S. stores. The China-based retailer specializes in creating designer toys and collectibles in collaboration with international designers, and also partners with global entertainment powerhouses. Its assortment includes numerous characters from such video games as World of Warcraft and League of Legends.

21

STORE SPACES

Tariff Increases: Impact on retail budgets

By Tom Vogt

A

s the new administration begins, uncertainty looms over the fate of tariffs and their potential impact on retailers and consumers.

While specific details about changes to tariff policies remain unclear, speculation suggests China tariffs could rise from the current 25% rate to as much as 60% or higher. However, some experts anticipate that some adjustments may be more modest initially.

Understanding that a tariff increase does not necessarily translate into a direct rise in sales prices is important. This could have varying effects for retailers depending on whether the products are for resale or used in-store (such as fixtures or displays).

Here’s a closer look at how tariffs may affect retail budgets from a fixture perspective, and strategies retailers can employ to mitigate their impact.

Mechanics of Tariffs and Ripple Effect Tariffs are taxes imposed on imported goods, taking effect when the product clears U.S. customs. While the tariff rate is applied to the declared value of goods, its ultimate impact on retail prices is influenced by several downstream factors: Container Efficiency: The number of goods in a shipping container reduces overall ocean freight costs but does not affect the tariff costs. A fully packed container may reduce the per-unit freight cost, but it won’t reduce the impact of a tariff increase. However, it is important to note that freight costs themselves are not subject to tariffs. Only the cost of the goods being imported are impacted, meaning that a tariff increase won’t be a one-to-one hike in prices.

Domestic Assembly: Products requiring final assembly in the U.S. are not be subject to higher tariffs on the assembled portion of the product, which can complicate estimating the final effects of the tariffs.

U.S. Handling Costs: Tariffs apply solely to the cost of the imported goods, not to additional domestic expenses such as unpacking, inspection, loading pallets, transportation, or in-store assembly. However, as tariffs rise, retailers may need to rethink how much they

22

plan in advance, adjust inventory levels or expedite deliveries, potentially driving up overall logistics costs.

When factoring in these variables, the real-world impact of tariffs on retail pricing are typically lower than expected. For instance, an increase to 60% tariff on displays might result in only a 10%-12% rise in retail prices, while a 10% tariff increase might lead to a modest 1%-2% price bump depending on the proportion of the selling price attributed to the cost of goods from China versus other expenses not subject to tariffs.

Budget Implications for Retailers When tariffs rise, retailers face a challenging balancing act. While price adjustments are often inevitable, the key question is how much of the additional cost can be absorbed internally rather than passed on to consumers.

Budget considerations include inventory planning, where retailers may increase inventory levels ahead of anticipated tariff changes, creating a short-term strain on cash flow.

Higher tariffs may require reevaluating logistics, assembly processes, and supply chain efficiencies to minimize cost increases. Retailers must decide whether to absorb some tariff costs themselves to maintain competitiveness, particularly in price-sensitive markets.

To navigate rising tariffs, retailers and their suppliers can explore various strategies to

reduce exposure and manage costs effectively.

The first consideration is diversifying supply chains and shifting production to countries with lower tariff rates, such as Vietnam or India. However, building new supplier relationships and infrastructure requires significant investment and time.

Waiting Game Retailers must remain agile, preparing for multiple scenarios and adjusting strategies accordingly. Tariffs are expected to take effect on a case-by-case basis as shipments arrive at customs, adding another layer of complexity to forecasting and budgeting.

While the prospect of higher tariffs presents significant challenges, their direct impact on retail prices will likely be less severe than headline figures suggest. In addition, many retailers have likely mitigated their risk by bringing in extra inventory in advance of inauguration, so the short-term implications of the tariffs may be even less.

Beyond that, retailers may look to move supply chains, but there are significant challenges to that strategy that will push most benefits out well beyond 2025 leaving the most significant impact of the tariffs for the medium term back half of 2025 and into early 2026.

Tom Vogt is corporate president of Agility Retail.

JANUARY/FEBRUARY 2025

CHAINSTOREAGE.COM

TRENDING STORES Puma has gone big in Vegas. The athletic footwear and apparel giant opened a 25,000-sq.-ft. store at the BLVD Las Vegas, a new retail and entertainment development located in the heart of the Las Vegas Strip. The three-level space boasts a variety of interactive features, including a professional-grade F1 racing simulator that lets customers virtually race down the Strip, and a customization studio where they can create and personalize Puma footwear, apparel and accessories using patchwork, embroidery, LED printing and more. … H&M gave its Times Square flagship an extensive revamp that includes multi-sensory fitting rooms with LED screens in the floor and ceiling, along with interactive mirrors. In the rooms, customers can select visual themes and music based on their style choices and moods. … Perigold, a Wayfair brand, will unveil its first-ever physical store in spring 2025, a 20,000-sq.-ft. location at Highland Village in Houston.

A second location, at CityPlace in West Palm Beach, Fla., will open in the fall. … Jewelry retailer Kendra Scott is expanding its Western-inspired brand extension, Yellow Rose by Kendra Scott.

The company opened a flagship in Austin, with additional Yellow Rose stores set to open in Dallas, Houston and Nashville. Yellow Rose sells hats, footwear, apparel and jewelry — all designed with a Western flair. It also features a hat bar where shoppers can customize their cowgirl hats with pins, feathers and more. …

Outlandish has brought TikTok shopping into physical retail. The

Puma, Las Vegas (Photo: BusinessWire)

company, self-billed as a leader in live shopping and social commerce, opened its first U.S. store, on the Third Street Promenade in Santa Monica, Calif. The first floor features stalls where influencers and brands can stream live shopping events. Visitors can shop for merchandise from those sellers on the second floor. …

Municipal, the premium activewear brand co-founded by actor Mark Wahlberg, opened a 16,000-sq.-ft. flagship in Oceanside, Calif. The location features men’s and women’s apparel and footwear, a café, studio, barber shop and dedicated space for the company’s corporate employees. The Oceanside store will serve as the blueprint for what Municipal calls its flagship retail concept.

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23

REAL ESTATE

EXCITING NEW BUILDS

Nobody’s building any new retail space anymore, right? Wrong. Tremendous and innovative new ground-up constructions and renovations are taking shape nationwide.

Here are seven of the best of them.

By Al Urbanski

RockRun COLLECTION, Joliet, Ill.

T

en years ago, the municipality of Joliet, Ill., 40 miles south of Chicago, contacted Cullinan Properties about a possible opportunity for the construction of a massive development in their town. Joliet is a crossroads location where Interstates 55, 80, and 355 coalesce. Population in the area was expected to rise by as much as 75% and they wanted to know what kind of project Cullinan might consider building in this promising location.

Thus were the foundations laid for RockRun Crossing, 310-acre super-regional mixed-use development that will include 500,000 sq. ft. of retail, 160,000 sq. ft. of entertainment,500-plus hotel rooms, and 570 multifamily residences. Cullinan expects it to serve a primary trade area of 1.3 million people with average household incomes of $140,000 and become a prime destination in Chicagoland.

RockRun’s first phase will open this summer. The project’s chief anchor-- a $185 million Hollywood Casino owned and operated by Penn Entertainment--is under construction and set to open this fall.

A decade after the first blueprints were drawn up, what may be the nation’s largest new retail-based development will be drawing visitors from Iowa and Indiana—as well as Illinois--via its direct-entry exit off I-55.

RockRun is ready to rock!

“The local community is very excited to see this day coming. The site had been farmland for years and years,” said Cullinan president Michael Gold. “RockRun will connect the local communities around Joliet.

We’re going to open up the entire region to this site. It’s going to be the first thing you see from I-55 on your way into Chicagoland.”

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HAWTHORN ROW, Vernon Hills, Ill.

M

all renovations that fill closed anchor space with apartments and food halls are nowcommonplace, but Centennial has taken the mall transformation game a bit farther in Vernon Hills,35 miles north of downtown Chicago on the shores of Lake Michigan.

The Hawthorn Mall (now simply titled Hawthorn) that Centennial acquired from Unibail-Rodamco-Westfield opened Hawthorn Row. Its first phase consists of apartments situated in new-construction three story buildings with ground-floor retail.

In the plans at Centennial are the creation of new South and East grand entrances with activated greenspace and outward-facing food and beverage tenants and retail. An additional 40,000 sq. ft. of streetscape retail and nearly 300 new residential units will be introduced in 2028.

Once complete, the Hawthorn campus will encompass 635,000 sq. ft. of retail space—more than 270,000 sq. ft. of it small shops-- amongst residential luxury apartments, outdoor space, and more in this dynamic mixed-used development.

Key retail brands will include Anthropologie, FP Movement, H&M, Lovesac, Pure Barre, Perry’s Steakhouse & Grille, and Yard House.

JANUARY/FEBRUARY 2025

CHAINSTOREAGE.COM

REAL ESTATE

NICK MORGIONE ON THE MATHEMATICS OF THE MALL

GOVERNOR’S SQUARE MALL, Clarksville, Tenn.

When Sears started shuttering all its stores as part of its ulti-

Anthony Cafaro (far r.) and Clarksville town officials launch the Governor’s Square renovation.

Proper use of subtraction and addition can keep regional malls relevant, says Nick Morgione.It’s what he’s learned and practiced over a 22-year career at the Niles, Ohio-based Cafaro Company, owner-operator of more than a dozen middle-market, regional malls across the country.

Chain Store Age spoke to the company’s senior VP of development and strategy to learn more about mall pluses and minuses.

Nick, 75 years after William and John Cafaro built their first shopping center, Cafaro still funds all its own builds and carries no debt. How does that affect your ability to undertake new projects?

We are the largest taxpayer in Mahoning County, Ohio. And yes, we carry no debt. Therefore, we don’t have to wait for a lender to approve a deal.

With us, it’s just a matter of our co-presidents Anthony and John Cafaro approving the funding for a project. We’re never there with our hands out to finance a build. We can react quicker than any other developer around. We can get a deal done in a week if necessary. When Borders went out, Anthony went to Books-a-Million and signed two leases with them on the spot.

Your regional malls stood the test of time for decades in markets like Dubuque, Iowa, and Canton, Ohio. What have you done to keep pace with your markets?

The department store anchors took up the largest percentage of space in all the malls. When they go out, we replace them with high-volume tenants with both indoor and exterior entrances that activate them.

CHAINSTOREAGE.COM

When Sears closed at Governor’s Square in Clarksville, we filled the space with Burlington, Home Goods and Dave & Busters. Those are three tenants we love to have in any of our centers, and we are constantly renovating all of our malls to attract more tenants like them. We strive to continue to keep our centers relevant in all our markets with brands like these. You can be an A mall in a B market.

Has Cafaro ever considered entering a major metro?

No. We can be the kings in our markets. In most of them, we are the only regional mall for 50 miles around. We’re always re-tenanting.We constantly conduct market research to tap into the needs and wants of local communities. They can change dramatically.

In Washington’s Pierce County, where our South Hall Mall Complex is located, jobs are expected to grow by more than 40 percent over the next 10 years. We’ve placed a strong emphasis on entertainment, food and beverage, and fitness.

We have a Goldfish swim school, a New Levels gym, and a Round1. And we’re looking at putting a hotel in there.

Have you given any thought to new center construction?

Too cost-intensive. We still look at malls to buy in our markets, but we stick to focusing on our current portfolio—subtracting what we need to subtract, and adding what we need to add. We’re always on the hunt for best-in-class uses.

JANUARY/FEBRUARY 2025

mate demise, the location at Governor’s Square Mall in Clarksville was no exception. The 87,000-sq.-ft. store space went dark in April of 2018. That created a new opportunity for the leasing department at Cafaro Company.

In October of 2021, a brand new Burlington store opened in a 25,227-sq.-ft. chunk of the old Sears space. In March, 2023, HomeGoods opened its first store in the region by taking 23,800 sq, ft. That left another 34,500 sq. ft., which was quickly snapped up by a growing and very popular entertainment entity. A new Dave & Buster’s opened its doors on November 11, 2024.

The transformation of the old Sears was complete. It was accomplished with skillful renovation to ensure each of the new tenants received the prominence and accessibility they needed. More importantly, it increased the foot traffic to an extent that hadn’t been seen, even when Sears was still in business.

The addition of three new dynamic tenants played into an overall revitalization of the Governor’s Square complex. As the finishing touches were going on at Dave & Busters, an overall renovation project for the entire mall had just been completed.

Additionally, a new Phoenix Theatres was embarking on a renovation of the old movie theater space inside the mall.

The sum-total of all this re-creation work culminated in a “Grand Reopening” celebration for the entire mall in November.

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REAL ESTATE FAIRFAX CORNER, Fairfax, Va.

T

hough this open-air center in affluent Fairfax County, Va., is just 20 years old, Peterson Companies decided to invest $110 million to add 30,000 sq. ft of retail space and 80,000 sq. ft. of residential space.

MEDLEY, Johns Creek, Ga.

M

ark Toro, the lead developer behind Avalon in Alpharetta, Ga., which sucked well-to-do traffic out of the nearby North Point Mall, doesn’t identify Medley as a mixed-use center.

He calls it an “urbanurb,” a community gathering center for $200,000-income household residents whose mini-mansion developments are dotted with corporate headquarters, but no downtowns.

Such a place is Johns Creek, a 25-mile drive north of Atlanta. When State Farm closed itsheadquarters there, Toro Development Company [TDC] worked with municipality officials toredevelop the site into a $560 million, 43-acre, gathering, shopping, dining, and entertainment locus.

Medley, which broke ground in January, will encompass 150,000 sq. ft. of retail, restaurant, andentertainment space. Johns Creek’s custom-made downtown will include a 175-key boutique hotel,110,000 sq. ft. of office space, 750 multifamily residences, and an activated 25,000-sq.-ft. plaza.

“Similar to bringing Avalon to life from the rubble of a long-abandoned project,” Toro said, “ Medley will rise from a sea of empty buildings to become the walkable urban oasis the Johns Creek community deserves.”

More than 25 retailers have committed to leases at the project — among them Sephora, HighCountry Outfitters, Bodyrok, Petfolk, CRÚ Food & Wine Bar, Lily Sushi Bar, Cookie Fix, Drybar Shops, Burdlife, Pause Studio, and Fogón and Lions.

“To us, it was a question of, ‘Why didn’t somebody else do something like this here earlier?’” said Kimberly Goetz, TDC’s VP of leasing. “There is a big retail corridor nearby but filled with typical power centers. Lots of big national brands, but not the kinds of restaurants, personal care services, entertainment, and fitness brands that have daily appeal to a highly educated and diverse population.”

TDC is just getting started. The Lower 48 are rife with towns such as Johns Cross, and the company, which is stocked with key personnel who worked together with Toro at North American Properties, looks forward to building new “urbanurbs” nationwide.

“We’re working on a pipeline. We’ve been approached with a lot of great possibilities,” said Goetz. “It’s interesting what kinds of opportunities present themselves if you look.”

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Fairfax Corner used the new space to move Arhaus into an enlarged 19,000-sq.-foot store with a 4,000-sq.-ft. terrace where the brand displays outdoor furniture. It also made way for Apple to enter the center in one of its one of its new prototype footprints, lined with wood paneling.

The investment paid out rather well.

“From Thanksgiving to December 25th , our traffic was up by 57% over 2023,” saidPeterson’s COO Paul Weinschenk. “We’re absolutely attributing that to the arrival of Apple.”

Peterson Companies, which owns and operates meticulously designed centers such as National Harbor outside of Washington, D.C. and RIO in Gaithersburg, Md., is an operator that constantly reviews local demographics to keep its tenant curations relevant.

In 2019, Peterson launched a $30 million reinvestment in RIO to, in part, add new and enhanced retail, dining, and entertainment options.

On the shore of the property’s 9-acre lake, it added new dining options, a jogging trail, and a 19 th Century-style carousel.

“It’s a really difficult time to do any ground-up construction right now,” Weinschenk noted, “but if you can do it, you can be picky about landing great tenants.”

WESTBARD SQUARE, Bethesda, Md.

I

n 2016, Regency Centers merged with Equity One to create what then Regency CEO Hap Steincalled “the nation’s preeminent shopping center REIT.” Both companies possessed properties in high-income communities in top metros. One of those was the Westwood Shopping Center inBethesda, a D.C. suburb with an average household income surpassing $200,000.

Today, that acreage is the home of Westbard Square, a mixed-use combination of office and street-level retail whose first phase has just been opened. Tenants already operating there include Starbucks, Tatte Bakery & Café, Citgo, Bowlero, and Oak Barrel & Wine. Opening soon

JANUARY/FEBRUARY 2025

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REAL ESTATE will be Sense of Thai, 1 to 1 Fitness, Siver & Sons BBQ, and District Dabble Lab, a children’s art studio.

When completed in 2027, Westbard Square will house 220,000 sq. ft. of retail space, along with a senior living facility.

“One of the great things we accomplished at Westbard Square was keeping our anchor, the Giant supermarket, in business throughout two years of new construction,” said Andrew Kabat, Regency’s senior market officer. “When we were about to build their new space, we moved them over to the building next door and they were able to continue serving the neighborhood while construction was going on.”

Regency put a video on the Westbard Square website that told local residents how it would keep Giant in business throughout the building of the first phase of the project and instructed them how to enter the site. It also gave them a preview of what kinds of new retail brands would be occupying the center and informed them that 400 more parking spaces would be available upon its completion.

“Regency wants to be in the best neighborhoods and provide residents with store and services that they rely on day-to-day,” Kabat said. “Our goal is to continue to provide them with their current needs and wants.”

TUSCAN VILLAGE, Salem, N.H.

I

n 2016, Rockingham Park, once hailed as the finest thoroughbred horse track in the world, closedits doors for good. The 170-acre property, a half-hour’s drive up Route 28 from Boston, wasacquired by local restaurateur and food manufacturing entrepreneur Joe Faro, whose intent was to fill it with a project composed of retail, office, and apartments.

Faro was introduced to Mike Powers, an experienced leasing and development alumnus of Washington Prime Group and Easton Town Center. They both thought big, and they returned big.

Today, Rockingham Park’s vast acreage is the home of Tuscan Village, a 4 million-sq.-ft. mixed-usecommunity with more than 1,500 apartments and condos, two hotels, and 700,000-sq.-ft. of retail.Its tenant list stars Nike, Pottery Barn, L.L. Bean, the Mass General Brigham healthcare center, Arhaus, Ulta, Homesense, West Elm, and Faro’s Tuscan Market.

Its third phase is near complete, but Tuscan Village is not done yet.

“We’re currently focused on our Central Village, which has 71 condos, 550 apartments, and 80,000 sq. ft. of office above 250,000-sq.-ft. of retail,” said Powers. “Capital Grille and Whole Foods are ready to open soon. At full build, we expect to have 5,000 people living here.”

When the ponies were still running on these grounds, tens of thousands of Bostonians were wont to flock to Salem to place their bets. They’re back again to shop, dine, and enjoy Tuscan Village’s Summer Concert Series, which runs every Thursday through Sunday during the season. Meanwhile, construction continues apace.

“We’ve still got plenty to do,” Powers said. “We have roughly another 30 acres to develop, and we’re still not sure what the highest and best uses will be.”

WESTFIELD UTC, San Diego

D

evelopers and leasing executives at Unibail-Rodamco-Westfield (URW) are taking advantage of Nordstrom’s departure from Westfield UTC to significantly increase sales per square foot at the center.

The space is about to be transformed into a plaza of first-to-market luxury boutiques and chef-led restaurants with enhanced amenities, sustainability features, community gathering places, and green spaces.

“UTC had not had a true luxury precinct in it. There’s been a a real shift in the city, with higher-income population moving farther north, to our benefit,” said Kim Brewer, URW’s senior VP of development. “The availability of this space gave us the ability to create great co-tenancy for a number of luxury brands. It’s going to be our Rodeo Drive.”

URW took down the existing Nordstrom building. Two new buildings will be constructed for the luxury wing on an elevated platform. A small parking lot with valet service will welcome the upscale shoppers.

“It will be very unassuming. Shoppers will arrive not thinking they’re in a shopping center,” Brewer said.

URW has yet to announce any of the luxury tenants that have signed leases.

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JANUARY/FEBRUARY 2025

27

SUPPLY CHAIN

Supply Chain Transformation: Five predictions AI is helping to revolutionize supply chains operations

By Abe Eshkenazi

A

s global supply chains continue to undergo rapid transformation, organizations must start preparing for the next wave of both challenges and opportunities.

In 2024, there were numerous unprecedented disruptions, from the port strike and Baltimore Bridge collapse to the devastating back-to-back hurricanes. Looking ahead to 2025, it will be essential for supply chain organizations to embrace innovation and build resilience to thrive in this dynamic environment and weather future storms.

Here are five key predictions for factors that will shape the evolution of supply chains during 2025: AI — the new supply chain catalyst Artificial intelligence is certainly revolutionizing supply chain operations. From optimizing inventory management to streamlining logistics, AI-powered technologies boost efficiency and reduce costs.

AI-enabled robots are automating tasks, improving quality and safety, while machine learning algorithms are enabling predictive analytics for enhanced decision-making.

By putting AI to use thoughtfully and ethically, organizations can unlock new opportunities and gain a competitive edge.

Investing in AI-powered solutions is just the beginning; it’s important to know how to identify appropriate tasks for AI tools, which often will include demand forecasting, inventory optimization and transportation route planning.

By training employees in AI tools and techniques — as well as smart evaluation of outputs — you can empower your workforce to harness the potential of this exciting technology.

A world of uncertainty Rising geopolitical tensions, trade disputes and economic fluctuations too often disrupt supply chains, increase costs and heighten uncertainty. To mitigate these challenges, organizations must build stronger relationships with suppliers and implement robust contingency plans.

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An essential strategy is to diversify your supplier base to eliminate any reliance on single-source partners. Additionally, implementing risk management strategies, such as contingency planning and scenario analysis, can help you prepare for potential disruptions.

Data-driven insights and innovation Big data and advanced analytics are transforming the way supply chain organizations operate. By leveraging data-driven insights, businesses improve forecasting accuracy, perfect inventory levels and enhance decision-making.

Meanwhile, real-time visibility, predictive analytics and machine learning enable organizations to identify and address potential disruptions before they occur. Smart supply chain professionals are investing in advanced analytics tools and platforms to gain valuable insights into their operations.

They are also implementing real-time tracking and visibility solutions to support proactive monitoring and response.

An essential strategy is to diversify your supplier base to eliminate any reliance on single-source partners. Additionally, implementing risk management strategies, such as contingency planning and scenario analysis, can help you prepare for potential disruptions A human-centric approach As technology continues to advance, the role of human workers in the supply chain is also evolving. While automation and AI are automating many tasks, human expertise remains essential for strategic thinking, problem-solving and innovation. Investing in employee training and development is crucial to ensure that your workforce is equipped with the skills needed to thrive in the digital age.

To achieve these goals, prioritize continuous learning and development programs. Offer

training in emerging technologies such as AI, machine learning and data analytics to equip your employees with the skills needed to adapt.

In addition, fostering a culture of innovation and experimentation encourages employees to develop new ideas and solutions. And providing opportunities for professional growth and development will help you attract and retain top talent.

Sustainable supply chains Sustainability is a critical factor in supply chain management. Consumers are demanding products that are ethically sourced and produced, while regulators are imposing stricter environmental standards.

By adopting sustainable practices, organizations reduce environmental impact, enhance brand reputation and attract eco-conscious consumers. Begin by prioritizing sustainable sourcing, optimizing transportation and reducing packaging wherever possible.

By sourcing from suppliers who share a commitment to sustainability, you can help ensure that your products are ethically produced and minimize their environmental impact. Additionally, better transportation routes and sustainable modes of transport can significantly reduce carbon emissions and fuel consumption.

Finally, minimize packaging materials and opt for recyclable or biodegradable solutions to help reduce waste and conserve resources.

By implementing these strategies, supply chain organizations both enhance their brand reputation and contribute to a more sustainable future for all.

Abe Eshkenazi, CSCP, CPA, CAE is CEO, Association for Supply Chain Management.

JANUARY/FEBRUARY 2025

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REAL ESTATE

Retail’s Leasing Frenzy

By Al Urbanski

Service-Based Brands Grabbing Space

F

rom his office at the Polsinelli law firm in Chicago, Jared Rothkopf aids shopping center owners across the nation in their dealings with national tenants and big-box retailers.

Known for his long and varied experience in lease negotiations, Chain Store Age spoke with Rothkopf about how differently the game has changed during this time of historically low space availability and rising rents.

Developers at the recent New York ICSC show spoke to us of bidding wars for top spaces in their booths. Has this been an especially busy time for you as well?

Over the past three years, my colleagues and I have been dealing with the heaviest volume of retail leasing transactions we’ve ever seen. People keep spending, so all retailers have needed to keep finding new space. Brokers always have a sense of urgency. Now retailers have a sense of urgency, as well. It’s been wild.

Are tenants who decide not to do their own buildouts--and pay higher rents instead—doing so because of higher interest rates?

I think interest rates have played a role with lesser-credit tenants not able to finance their own construction. Demand for tenant improvements from landlords is higher because of the great demand for diminishing space. In some cases, we’ve seen clients reduce the scope of their buildouts, but ultimately, they need the landlord and they need the space.

Equipment costs to keep rising. HVAC units are not only more costly, but more difficult to obtain. Is there a lot of haggling over equipment?

HVAC is one of the most important issues in the lease – especially in the Sunbelt. If the units in the space are old, you need to get landlords to agree to replace them up-front.

Either they’ll replace them with delivery of the space, or they say they’ll maintain the units in place over a period of time – something like three to five years. After

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replacement by the landlord, maintenance and replacement costs are all on the tenant.

What about fast-expanding chains that commit to Wall Street to opening 100 new locations in the coming year? How are some of them overcoming the lack of available space to hit their numbers?

I think you see those brands opting for smaller spaces in markets they’ve pledged to enter. Ones with 20,000-sq. ft. footprints will settle for 12,000 to 15,000 sq. ft. and adjust their operations a little bit to fit that smaller store.

Rents continue to rise with availability at a low point. How high have you seen rents climb over the past two years?

This is a very difficult question to answer because so many factors go into the determination of rent and how the parties come together to make a deal.

Rents are indeed up in many places and tenant improvement packages only further drive those numbers. But I’ve also seen unique circumstances where landlord’s offer big TI’s without a corresponding increase in rent. In that scenario, the landlord needs to fill a big and important space and is willing to take a haircut in the short term to help drive value later.

For the first time, service-based retailers are now the most active acquirers of retail real estate space, according to CoStar.

In its January topline summary, the commercial real estate analytics platform reported that foodservice tenants accounted for more than 20% of leasing activity during the first 11 months of 2024. During the same period, fitness brands snapped up 12% of leases, and health care and education tenants grabbed 6%.

“During the pandemic, restaurants didn’t shut down.

They moved into takeout kitchens, and delivery apps kept them in business,” said Brandon Svec, CoStar’s national director of retail analytics. “When they opened back up, eating out became the logical way for people to get out and spend their money. People looked to it as an affordable luxury after being locked in their houses.”

Younger consumers have more money to spend and are spending it on doggy day care, car washes, and fitness club memberships.

Tenants at neighborhood centers long shunned gyms, whose members took up lots of parking spaces but spent little time or money at the stores in the properties. That’s changed, said Svec.

“Fitness brands are a fantastic driver of traffic to a center. They’re not the stepchild any longer, they’re the stars of the show,” Svec said. “The TikTok generation are active members of fitness centers.

They’ve become part of their personal brands.”

JANUARY/FEBRUARY 2025

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REAL ESTATE

The National Scramble for Class A Retail Space

By Al Urbanski

O

ver the past 12 months, DLC Management Corp. and its investment partners have acquired seven open-air centers that, in total, comprise 1.5 million sq. ft. of retail space. Founder and CEO Adam Ifshin’ s goal is to double the size of his center portfolio with capitalization, not new construction, and his new space is going fast.

“There are a lot of people who are trying to tie up space right here, right now, because they’re afraid it’s not going to be here tomorrow,” Ifshin told Chain Store Age on the floor of the ICSC New York Show in December.

“We’ve had some bidding wars for 25,000-to30,000-sq. ft. spaces.”

The space grab is, indeed, fearsome. Ifshin reported that DLC had signed two anchor tenants to leases that had been out for less than 30 days.

In the last four weeks, we probably signed 200,000 sq. ft. of leases,” he said. “The smart tenants are thinking ahead, because, for now, there’s no way out of this situation.”

Regional mall re-maker Carmen Spinosa has been on a buying spree for the past few years.

In 2022, his leasing team executed more than 2,500 leases that added up to more than 7 million sq. ft. of space across his 41-property portfolio. Today, his mall count is 55.

“If we get control of a department store, we’ll split it up and fill it with tenants like TJX, Dave & Buster’s, or Barnes & Noble,” said Spinoso on the exhibit hall floor. “Every property is different, and our first order of business is to determine what the local market really wants and target new tenants. We get good brands — even ones that may not be in an expansion mode — to look at malls in viable locations.”

Anthony Cafaro, Jr. is the co-president of the family-owned Cafaro Company, which operates more than 50 regional malls. He said Cafaro is now seeing top retail, entertainment, and food and beverage brands eager to move into thriving middle markets.

“There’s not really any Class A space to be found in major markets, so institutional space

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is trickling down to the smaller markets,” Cafaro observed. “We are able to attract tenants like Meijer and Bass Pro Shop because we have always bought open acreage surrounding our malls to give us room to grow. And we carry no debt. That gives us the ability to be very creative.”

Raising Rents With space so tight, and equipment and construction costs so high, every developer Chain Store Age spoke with on the ICSC show floor was raising rents. Most chain real estate directors in the building, meanwhile, were still clinging to company-imposed rent guidelines.

Steven Levin, the CEO of Centennial, which owns and operates some 40 regional malls and lifestyle centers nationwide, thinks retailers need to de-emphasize the role of rents in their brick-and-mortar business plans.

“Your rent number should not be a number that is tied to your bottom line,” said Levin, who began his career as a retailer in his family’s chain of women’s specialty shops. “Find the locations where you can find the volume you need for your brand. Percentage rents would bridge the gap, but that concept has gone away. So, if you’re a landlord, you have to push the rents higher.”

According to Levin, the real challenge for retailers in a time of dwindling space availability is to focus on landing the space that will produce good volume and managing the inventory.

“Lululemon and Anthropologie are expanding, but in a very focused and selective effort,”

JANUARY/FEBRUARY 2025

said Levin. “Trying to scale the business too much and open too many stores—that’s where you start diluting the locations.”

“Consumer spending is healthy,” noted Jeff Edison, CEO of Phillips Edison & Company, which owns and operates more than 300 grocery-anchored centers nationwide. “Our occupancy is at an alltime high. More investors are coming in on the buy side for retail real estate. But these trends don’t linger over long periods of time. We think the market will begin to normalize next year, though property prices will likely remain at the same levels we’re seeing today.”

JLL’s president of retail, Naveen Jaggi, sees a light at the end of the tunnel for the resumption of retail real estate construction.

“Trump’s always talked pro-business and fewer government restrictions,” he said.

“We’re foreseeing an easier borrowing environment in the years ahead and we’re likely to see the market continue to react accordingly. Right now, the market is reacting very positively.”

Despite inflation, Jaggi also predicted the continuation of strong buying power on the part of American consumers.

Economic analysts focus too much on credit debt in appraising consumer financial strength, he said, and not enough on net worth. Housing prices continue to climb, and household net worth continues to rise.

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TECH VIEWPOINT

2025 Retail Tech Trends

New year brings new developments in retail technology

By Dan Berthiaume

I

t’s time to dust off the crystal ball and gaze into the trends that will drive the retail technology industry throughout the year.

Here is a look at how supply chain disruption, AI “co-piloting,” and automated delivery will impact the industry:

Supply chain disruption The global supply chain has recovered from the peak disruption levels of 2020 and 2021 and continues on an uneven course of improvement. But it still does not function as smoothly as it did pre-2020.

The supply chain also remains prone to shocks from ongoing global instability and climate events, as well as strikes affecting both ports and rail service. The possibility of new tariffs being imposed on imported goods in 2025 also raises uncertainty about how the supply chain will function.

All this will lead retailers to implement solutions that can help them better predict potential disruptions, react when they happen, and generally run their supply chains more smoothly to make the inevitable impact of disruptive events less dramatic.

On the predictive side, expect more retailers to follow in the footsteps of Dick’s Sporting Goods, which utilizes Inspectorio sourcing and production technology to obtain seamless connection of traceability data with the rest of its sourcing operations, as well as automate manual processes with AI-equipped features.

The retailer also intends to obtain enhanced visibility into performance and production changes and more easily identify which raw materials are being used across multiple purchase orders.

In terms of smoother supply chain operations, retailers should consider the example of Walmart, which runs high-tech fulfillment centers featuring an automated, high-density storage and retrieval system that streamlines a manual, 12-step process down to five steps.

It also offers double the storage capacity and twice the number of customer orders the

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Amazon’s MK30 delivery drone shown in flight.

discounter can fulfill in a day, expanding nextor two-day shipping.

AI as co-pilot Another trend that will help steer the direction of retail technology in 2025 is the growing realization that AI is not a cure-all and does not make things better on its own. Retailers are increasingly finding that the maximum value of AI is obtained when it serves as a “co-pilot” that enhances and expands the capabilities of a human user.

For example, Target Corp. is rolling out a new proprietary generative AI chatbot called “store companion” that will help store associates answer customer inquiries and on-the-job process questions, coach new team members and support store operations management.

The new chatbot will be available as an app on specially equipped handheld employee devices, providing immediate answers to their questions about processes and procedures.

On the customer-facing side, e-commerce marketplace Curated uses an AI consumer co-pilot to connect with customers who are a little bit earlier in their buying journey.

This allows them to ask questions, start their educational process, and begin to understand the terminology about products.

“Our AI is trained on over 2 million conversations that our consumers have had with our experts,” Peter Ombres, CEO and co-founder of Curated, told Chain Store Age. “This database of interactions helps make our AI

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extremely useful in the context of shopping.”

However, Curated has found that most customers reach a point in their buying journey where they have questions that only a human can answer, and they are then transitioned to one of the e-tailer’s human experts.

Automated delivery The volume of deliveries keeps expanding, and with it consumer expectations for packages to arrive potentially within hours or even minutes of placing an order. It’s no wonder that retailers continue to look to automated delivery technologies, a trend set to grow in 2025.

Drone technology is one of the most talked-about automated delivery solutions, and now that Amazon has received Federal Aviation Administration permission to fly its Prime Air delivery drones beyond the visual line of sight of the pilot and Walmart is enabling select drone delivery orders directly in its app, other retailers will surely follow.

Some retailers already have. Quick-service restaurant chains Panera Bread and Jet’s Pizza recently launched delivery via Zipline drones in select markets.

Sidewalk robots are also a burgeoning automated delivery platform, as evidenced by recent rollouts from entities including Shake Shack, Uber Eats and Grubhub. And as driverless vehicles continue evolving, expect more pilots like Uber Eats’ ongoing testing of Waymo robotaxis.

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TECH

Robots in Retail: Three possible scenarios The presence of robots continues growing in retail, but where will it all lead?

Robots are taking on an increasing number of roles in retail, including tasks for which many retailers are currently struggling to find enough human employees. As I see it, retail is only at the beginning of its robotic age.

Here is a look at three ways the use of robots may develop in retail: One possible future for robots in retail — and the best for lovers of AI and automation, is what I would call a “Star Wars” scenario. Human-like robots such as the Agility Robotics bi-pendal robot known as “Digit,” which Amazon has been testing to help employees with tote recycling, would routinely work alongside and potentially in place of humans in stores as well as in the supply chain.

In addition, self-driving vehicles would be the norm and drones or surfacetraveling robots would execute most deliveries. Robots would be fully integrated into retail as well as every other facet of society, leading to an integrated human- mechanical environment like that of the “Star Wars” films.

While it’s hard to say what the more distant future may hold, in the short term this scenario is highly unlikely. Retailers have previously tested human-like robotic store associates and in the U.S., they have not taken off. Clearly, robots are here to stay, but a future out of science fiction is less likely than one of these two possible outcomes: 32

More Robots: Currently, robots have a strong presence in retail, particularly in the back end where retailers such as Walmart are developing a robotics-centric supply chain model and Chipotle has deployed robots to streamline food prep.

On the front end, stores and shopping centers are slowly seeing an increase in robots performing tasks such as counting inventory, cleaning floors, patrolling for security and serving food and drinks. Also, drones and self-driving vehicles are growing in popularity as delivery vehicles.

As opposed to a science fiction outcome where robots become a fixture of everyday life and increasingly human-like, this scenario basically envisions a retail environment not that different from the one we have now — except that robots doing things such as distributing inventory on the back end and keeping the floors shiny on the front end would become the norm instead of being seen as “cutting-edge.”

Fewer Robots: As society in general becomes more roboticized, a future featuring fewer retail robots than are currently deployed seems far-fetched.

While this admittedly is less likely than the more robots scenario, it is not impossible given the right set of circumstances. These would be the continuing advancement of mobile, Internet of Things (IoT), and artificial intelligence technologies to enable humans equipped with mobile devices to perform a greater number of tasks more efficiently.

For example, an employee with an AIequipped app that reads signals given off by shelf or product tags could take store inventory as easily as a scanning robot, or AI-enabled smart cameras could identify potential security incidents and immediately notify human personnel via text.

There would still be plenty of robots in this scenario, especially performing manual tasks such as driving vehicles or loading and unloading pallets. But humans with technology-enhanced capabilities would actually “replace” the robots in some enterprise workflows.

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From e-commerce and mobility to in-store technology and social media, Connected Retail keeps retail executives in the know about the fast-paced, ever-evolving world of retail tech.

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Dan Berthiaume dberthiaume@chainstoreage.com

JANUARY/FEBRUARY 2025

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TECH

Ulta Beauty Enhances Personalization Efforts Beauty giant looks to leverage loyalty program data

By Dan Berthiaume

U

lta Beauty is tapping into data from its customer loyalty program, to enhance the member experience.

The beauty giant recently implemented the Adobe Real-Time Customer Data Capabilities (CDP) solution in an effort to more effectively utilize data from its Ulta Beauty Rewards loyalty program to better understand the unique preferences of loyalty members and enable more detailed and accurate customer audience segmentation.

Ulta aims to deliver automated, personalized and seamless loyalty content in real time across all channels, including social media, customer app, and in-store. The Adobe solution works by instantly gathering and updating customer profiles the moment they interact with Ulta, such as making a purchase, browsing products, or adding items to their cart.

These real-time capabilities allow the retailer to respond immediately to potential loyalty member needs, offering personalized recommendations, targeted promotions, and content tailored to their preferences.

Chain Store Age recently spoke with Kelly Mahoney, senior VP of customer marketing at Ulta Beauty, and Josh Friedman, VP of digital products at Ulta, about how the retailer is building upon the 2024 relaunch (see sidebar) of its loyalty program..

What issues was Ulta facing with its loyalty program?

Mahoney: With 44 million members, Ulta Beauty Rewards is the largest loyalty community in the beauty category and accounts for approximately 95% of our transactions. We

With 44 million members, Ulta Beauty Rewards is the largest loyalty community in the beauty category and accounts for approximately 95% of our transactions.

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JANUARY/FEBRUARY 2025

continually leverage data and insights from our millions of members to better understand their unique needs and preferences and adapt our strategies to deepen and grow guest engagement and loyalty.

Our analysis shows that beauty is deeply personal and is intrinsically connected to emotional and physical well-being, so we recognize the importance of delivering the most personalized experience for each of our customers.

That’s why we partnered with Adobe to more effectively leverage loyalty program data so we can better understand the unique preferences of loyalty members and deliver personalized experiences at scale.

What have the results been?

Friedman: We are already seeing the results of this partnership in unlocking new capabilities across the shopper journey, which are showing up in a more connected way for customers.

Ulta has expanded personalization across our digital channels with enhanced product recommendations, replenish reminders, site experiences and re-targeted and social channels.

Leaning into targeted lifecycle campaigns in both owned and paid channels, we reactivated members with greater efficiency. Additionally, we grew our platinum and diamond member base, leveraging unique incentives such as exclusive and early access to key events and brand launches, gifting and personalized offers that drive engagement.

What are Ulta’s future plans for the loyalty program?

Mahoney: After more than a decade of providing our loyalty program, Ulta still sees tremendous opportunity for continued growth and have set a near-term goal to reach 50 million members by 2028.

One of the ways we intend to reach our goal is by creating authentic, personalized experiences across our channels as a way to drive differentiation, loyalty, and meaningful business value.

Our North Star is to create a fully automated personalization engine that will dynamically adjust in real-time as users interact with our brand, creating highly personalized experiences at scale.

Ulta Beauty Rebrands, Upgrades Rewards Program In January 2024, Ulta Beauty updated its customer loyalty program with a new look and name — and enhanced benefits.

The beauty giant changed the name of the program, which launched in 2014, from Ultamate Rewards to Ulta Beauty Rewards. It also added new features, including an upgraded birthday offering allowing members to select a gift across a portfolio of brands spanning all categories. (Previously, the gift was pre-selected.)

Ulta also launched new initiatives to promote the updated program, bolstering awareness in-stores, online, on social media and across owned channels with educational tips to help members accelerate ways to earn and redeem points.

“For years, we’ve been building our best-in-class program to reflect the ever-evolving needs of beauty enthusiasts and we strive everyday to win the hearts and minds of the beauty community by rewarding them with more of what they love,” Kelly Mahoney, senior VP of customer and growth marketing at Ulta Beauty, stated in a release at the time of the relaunch. “The enhancements we’ve made to Ulta Beauty Rewards go beyond a new name. They reflect the wants of our most loyal guests and importantly showcase just how much we appreciate them.”

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TECH

NRF 2025: Retail’s Big Show puts spotlight on AI and RFID

By Dan Berthiaume

T

wo innovative technologies have evolved into everyday tools for retailers.

At the NRF 2025: Retail’s Big Show conference and expo held at the Javits Convention Center in New York City, it seemed like nearly every exhibitor was featuring solutions equipped with either artificial intelligence or RFID. The overarching theme of the conference was that both of these technologies are no longer bright, shiny objects. Instead, they are expected, practical components of a larger retail architecture.

Let’s a take a closer look at what was revealed about AI and RFID at the show:

AI is standard operating equipment The biggest surprise of the entire conference was how many different exhibitors were offering some variety of AI-enabled assistant for store associates. Mostly delivered via app located either on an employee’s own mobile device or retailer-owned mobile device these AI assistants provide employees with instant access to nearly limitless volumes of all types of information.

Data available at employee fingertips includes product information, enterprise inventory availability (in-store, at other stores, in a warehouse or fulfillment center, etc.), customer reviews, and store policies and procedures.

In addition to enabling associates to provide substantially higher levels of customer service, proponents of AI store employee assistants say they also allow employees to perform at a much higher level with far less training, resulting in improved efficiency and enhanced employee satisfaction.

Agentic AI takes one more step In tandem with the near-ubiquitous presence of AI-enabled store assistant technology was the surprisingly low profile of agentic AI, the latest wave of AI evolution. It builds upon the prescriptive capabilities of generative AI to streamline enterprise workflows even further.

Agentic has been the leading buzzword in

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RFID was a big topic at NRF 2025: Retail’s Big Show.

AI for the past few months, and the fact it was widely available but not heavily promoted on the exhibit floor signals that retailers now view advanced intelligent enablement of their enterprises as a routine proposition.

Generative AI, which is based on machine learning, can create new content and ideas and create recommendations based on analysis of volumes of data in near-real-time that were previously too big to evaluate.

Agentic AI goes a step beyond by analyzing massive amounts of data in near-real-time and then automatically taking action based on the results. For example, an agentic AI pricing solution could adjust prices based on factors specific to a local store or an agentic AI chatbot could automatically issue a customer refund or flag a complaint for fraud depending on its deep-dive data processing.

RFID comes of age Since the early 2000s, RFID has existed in sort of a retail technology gray area – most industry members and experts have agreed it can be practical, but with little consensus on specific use cases.

Based on what I saw and heard at the NRF show, this is no longer the situation. RFID requires placing millions of tags on products at the source, which then must be scanned and read. Traditionally, tags were pricey and often obtrusive on the product, while readers were expensive to place and maintain.

In addition, RFID tags generally did not work well with liquids or metals, including metal shelving. However, modern RFID tags are not much larger than a speck of dust and effectively work with any product or environment, including those involving liquid and metal.

Also, reader technology has also evolved to include ceiling-mounted readers that can continually scan and monitor all the tagged products in a store or warehouse, as well as robots that autonomously scan items as they rove the aisles.

Channel diversification meets its match The real-time, product-level identification capabilities of RFID are becoming even more valuable in the modern extended omnichannel environment. The journey a product takes from source to customer is much more complex than it used to be.

An item might start in a warehouse, be placed on a store shelf and then picked from the shelf to fulfill a curbside, BOPIS or ship-from-store order. It may also be transported to a different store hundreds of miles away to avoid being marked down or picked directly from the warehouse to fill a digital order that may come from one of many digital sales channels.

These include a retailer’s own e-commerce site, third-party e-commerce marketplace, or social media site. Products can effectively be identified and tracked in near-real-time using RFID across any of these channels.

JANUARY/FEBRUARY 2025

CHAINSTOREAGE.COM

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