CSA - March/April 2020

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March/April 2020

NEW Breakout Retail Centers Construction Trends Fast-Growing Cybercrime Threat

Outdoor Voices






Neighborhood Goods

Chicken Salad Chick

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from the editor’s desk


tech viewpoint: a retail tech column



On the Level: A real estate column




Profiles of Chain Store Age’s 2020 Breakout Retailers Awards recipients: Chicken Salad Chick, Deciem, Eyebobs, Neighborhood Goods and Outdoor Voices


Expert Opinion: California Consumer Privacy Act has wide-ranging implications for retailers.










A look at the new wave of experiential retail

Spotlight on three new waste regulations.

Labor shortages, prefabrication and automation/machine learning rank among top construction trends.

Cost caps can play a major role in final amount of lighting rebates.

Trending Topics: Stop & Shop deploys fuel cell technology; Walgreens details energy, waste management initiatives.

Fabletics brings its online experience into brick and mortar.

The future of retail design will be shaped largely by the expectations of Gen Z.


Shop Talk: It’Sugar is a candy lover’s dream

Vendor Q&A: Rogers’ Jason Hayes discusses how retailers can streamline their facility maintenance processes.

CSA (USPS 054-410; ISSN 0193-1199), is published bimonthly by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631, on a controlled basis to qualified retailer titles and architects. Real estate and shopping center owners and developers $75 per year. All other nonqualified $125 per year. $190 per year for Canadian subscribers; $275 per year for foreign subscribers, air-mail only. Single-copy price: $20. Periodicals postage paid at Chicago, IL and additional mailing offices. P ­ OSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Subscription changes may also be emailed to chainstoreage@omeda.com, or call 847-564-1468. CANADA POST: Publications Mail Agreement # 40612608. Canada returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. Vol. 96, No. 2, March/April 2020. Copyright ©2020 by EnsembleIQ. All rights reserved.


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Contents VOL. 96 MARCH/APRIL NO. 2






Breakout Retail Centers One thrives as an open-air center on the site of a demolished mall, one helped set the tone for urban districts, one revitalized the center of a great American city, and one is a dream realized after 15 years in the making. Read all about retail real estate’s top breakout artists!

Vendor Q&A: Axonify’s Carol Leaman talks about using emerging technology to maximize the effectiveness of employee training programs.



Hot Market: New York Higher-income people keep pouring into the city and so investors keep funding new mixed-use and retail projects from Harlem to the Lower East Side to the Gowanus Canal.

Here’s how retailers can protect themselves against the fast-growing e-commerce cybercrime of Magecart.





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Four to Watch

It’s not easy for a retailer to fly under the radar these days, to have the time to develop and grow a concept. News travels so fast and everyone is too eager to crown a brand that’s just getting its feet wet as the next big thing. The hype often proves way overrated. That said, new concepts remain the lifeblood of retail and attention must be paid. So, while I’m not making any grand predictions, here are four new brands on my radar. • Studs: Call it the next-gen version of Claire’s. Piercing studio Studs was created to modernize the traditional “mall piercing” experience, according to co-founder Anna Harman, whose background includes a stint as director at Walmart incubator Store No. Eight. It combines storefronts with an online platform where customers can get after-care information and shop. Studs offers ear-piercing services in a cool, chic and hygienic environment, complete with clinical-looking piercing booths. The wide jewelry assortment — available online and in-store — includes curated “earscapes” (personalized combinations of piercings and earrings that customers can mix and match), single earrings, trendy collaborations and more. Founded in 2019, Studs has opened two stores, both in New York City, with plans to expand. • Camp: With five stores under its belt, Camp has been generating lots of buzz since it debuted in fall 2018 with a goal of reinventing the toy store for the experiential age. Billing itself as the “family experience store,” the concept is designed to offer a seamless blend of product, play and experiences, with immersive themes that rotate during the year. Visitors at Camp are encouraged to get hands on and play with the product. They first encounter a general store-styled Camp Canteen and then walk through a “magic door” that leads to a larger, themed play area as well as a “campithe-


atre” featuring various activities. There is also an on-site café. Camp offers daily ticketed (paid) activities that run the gamut from arts and crafts to entertainment to cookie decorating, along with free, sponsored events. Among its more novel offerings are weekend “date nights,” a baby-sitting program that allows parents to drop off their kids who will be supervised by “camp counselors.” • Basics Market: A small-format grocery concept focused on local and regionally sourced products, Basics Market is leveraging two current trends: growing interest in healthy meals and cooking at home. The retailer, which launched in Portland, Oregon, aims to promote at-home cooking and local, sustainable products. It combines a neighborhood-styled grocery store and a nutritionally minded cooking school. Basics is not your typical specialty grocer. It features rotating monthly meal stations with products organized by recipes inspired by seasonal and regional products. All recipes are vetted by Basics’ nutrition team. While it carries some product staples and grocery essentials, the selection is largely focused on fresh, locally sourced produce, meat, eggs and dairy. The company sources directly from farms that prioritize sustainable farming practices, such as animal welfare. Basics’ locations are equipped with state-of-the-art cooking facilities and offer a robust schedule of on-site free cooking classes that include interactive demonstrations and hands-on workshops along with nutrition classes. • Rothys: An online shoe brand that makes women’s shoes from recycled materials, including recycled plastic water bottles, Rothys conveys a message of stylish — and comfortable — sustainability. The shoes — all flats, and priced at $125 to $165 — are knitted together, making them super comfortable, according to fans. Its newest style, a modern take on the classic Mary Jane, is being hailed as a spring style essential. Rothys has started to expand in brick and mortar. It has opened three locations to date, and more are likely this year.

Marianne Wilson mwilson@chainstoreage.com



An EnsembleIQ Publication

Corporate Office: 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631

Vice President, Group Publisher, CSA, SPECS Chairman Gary Esposito (212) 756-5118, gesposito@chainstoreage.com

Editor Marianne Wilson

(212) 756-5261, mwilson@chainstoreage.com

Technology Editor Dan Berthiaume

(978) 994-1881, dberthiaume@chainstoreage.com

Real Estate Editor and Manager Al Urbanski (646) 957-5224, aurbanski@chainstoreage.com

Online Editor Jennifer Mosscrop

(212) 756-5264, jmosscro@chainstoreage.com

Midwest and South Sales Manager Michael Morrissey (312) 645-5072, mmorriss@chainstoreage.com

East and West Sales Manager Lise Slaviero Groh (610) 212-7997, lslaviero@chainstoreage.com

Program Director Deena AmatoMcCoy (516) 208-9483, damccoy@chainstoreage.com

Event Director Melissa Murphy

(212) 756-5059, mmurphy@chainstoreage.com

Event Coordinator Rita Ruzalski

(212) 756-5268, rruzalski@chainstoreage.com

Marketing and Event Administration Coordinator Farida Batuta

(212) 756-5269, fbatuta@chainstoreage.com

Vice President, Production Derek Estey 877.687.7321, destey@ensembleiq.com

Creative Director Colette Magliaro 973-607-1320, cmagliaro@ensembleiq.com

Art Director Regina Loncala rloncala@gmail.com

Production Manager Patricia Wisser (973) 607-1322, pwisser@ensembleiq.com

Subscriptions/Customer Service: For subscription problems, call (847) 564-1468; email chainstoreage.com@omeda.com or mail us full details, including the mailing label of the last copay you received, write to CSA, Subscriptions, Box 3200, Northbrook, Ill., 60076-3200. Address changes can be made online at chainstoreage.com/subscribe. Single-copy price: $20. Reprints: Contact Wrights’s Media at EnsembleIQ@wrightsmedia.com; or call (877) 652-5295. Minimum: 100 copies Permissions: Materials in this publication may not be reproduced in any form without permission from the publisher. Contact Wrights’s Media at EnsembleIQ@wrightsmedia.com, or call (877) 652-5295.

Corporate Officers Chief Executive Officer Jennifer Litterick Chief Human Resources Officer Ann Jadown Chief Financial Officer Jane Volland Chief Innovation Officer Tanner Van Dusen Executive Vice President, Events & Conference Ed Several Senior Vice President, Content Joe Territo





CSA’s annual awards program honors five innovative brands By Marianne Wilson


Innovation is critical to success in today’s fast-changing and fiercely competitive marketplace. Companies cannot hope to compete, much less thrive, by staying in place. Success requires more than the right technology, more than bells and whistles. It requires a willingness — a daring — to step out of one’s lane and break new ground in ways that resonate with customers. In this section, Chain Store Age profiles five brands that are succeeding in all of the above. They are the winners of CSA’s annual Breakout Retailers Awards, sponsored by architecture and engineering firm HFA, which has multiple offices across the U.S. and Mexico. Selected by the editorial board of CSA, the awards honor inventive retail and restaurant concepts that have passed the “newbie” line (some more recently than others), are positioned for growth and have a knack for invention. Each one brings something unique to their market. The five brands in the Breakout Retailers class of 2020 are incredibly diverse. They include a digitally native, self-billed “abnormal beauty company” that is expanding in brick and mortar, an activewear brand that has forged a unique niche and a start-up concept that is out to reinvent the department store model. They also include an eyewear company dedicated to matching frames to the customer’s personality and a Southern-inspired, fast-casual eatery with a friendly, home-like feel. As the winning lineup so clearly shows, innovation can come in all shapes and sizes. 8

OUTDOOR VOICES Outdoor Voices wants to get everyone moving. Founded in 2014, the activewear company has grown from a small start-up to a brand with a devoted following and one that has attracted nearly $60 million in venture funding and is growing online and in brick and mortar. Much of Outdoor Voices’ success has to do with its positioning, best summed up in its tag line: #Doing Things (short for the company’s full slogan, “Doing Things Is Better Than Not Doing Things.) It has thrived in one of the apparel market’s most competitive and lucrative segments (activewear is a $55 billion-dollar industry) by carving itself a unique niche that separates fitness from performance. Outdoor Voices specializes in fitness wear made from technical fabrics (with a nontechnical feel and colorful, fashionable look) for people who want to be active but don’t feel the pressure to perform. It describes itself as the “recreation brand” built for “recreational enthusiasts,” folks who enjoy physical activity and getting outdoors but aren’t necessarily interested in rigorous training or heavy-duty competition. In its messaging, imagery and overall approach, including its store design, Outdoor MARCH/APRIL 2020 CHAINSTOREAGE.COM

Outdoor Voices Voices is less hardcore and more light-hearted than many other activewear brands. Usergenerated content makes up a large part of its social media with fans posting on Instagram about #DoingThings. “With Nike and so many other brands, it’s really about being an expert, being the best,” Outdoor Voices founder Tyler Haney said in a Vogue 2018 interview. “With OV, it’s about how you stay healthy — and happy.” Haney founded the company to offer women an alternative to the major performance-oriented activewear brands. (It has since expanded into menswear.) She was 25 years old at the time and just two years out of the Parsons School of Design. Stores: Outdoor Voices started out predominantly as an online brand and digital sales still account for the majority of its sales. But brick-and-mortar stores have become an important part of the strategy — “We’re more fun in real life” proclaims the company’s online store locator. To date, the brand has opened 11 locations in major U.S. cities, including New York, Los Angeles, San Francisco and Boston to name a few. It also has a store in its hometown of Austin, Texas. Two more locations are currently in the works. Outdoor Voices stores blend the online and the off-line, and offer plenty of Instagramable moments amid a warm, welcoming environment. No two look exactly alike. The Boston store pays homage to the city’s collegiate tradition with modern details through shingled dressing rooms and classic locker roominspired displays. The San Francisco location CHAINSTOREAGE.COM MARCH/APRIL 2020

> Outdoor Voices stores have a warm, low-key atmosphere. No two are exactly alike. takes its cues from the city’s tea houses and Pacific Coast setting. An abundance of plants and locally sourced redwood slabs mark the space, which includes an alcove where customers can enjoy a cup of tea. The Nashville store features a gold-plated Dance Dance Revolution machine. More than just a place to sell product, Outdoor Voices stores also seek to build brand engagement and community, inviting everyone to join in the fun. All the locations host events, from hikes and walks to “dog jogs,” yoga and fitness-related activities. Outdoor Voices is also tech-savvy, particularly in its store operations. In 2019, the brand deployed technology from NewStore, an app-based platform that allows the retailer to bridge online and in-store shopping experiences. Data insights are made available to store associates on iPhone, allowing them to easily access and deploy such functions as endless aisle, mobile checkout, store fulfillment, inventory management and clienteling. NEIGHBORHOOD GOODS Neighborhood Goods is a pioneer of a new retail concept, one that is reinventing the traditional department store shopping experience for the digital age. The company, co-founded by Matt Alexander and Mark Masinter, launched in late 2018 with a 14,000-sq.-ft. store at Legacy West, an open-air center in Plano, Texas, a suburb of Dallas. The sleek, modern store opened with a mix some 30 brands — many of them new to brick and mortar and/or cult faves — along with weekly

event programming, services and social experiences, including an on-site restaurant. The product offerings span a wide range of categories, including fashion, accessories, beauty, home decor, family, wellness and consumer tech. The lineup, which has expanded to more than 40, includes the likes of Rothy’s, Stadium Goods, Buck Mason, Draper James, Dollar Shave Club, Primary, Simplehuman, Pure Cycles and Fossil. Each brand has its own designated area within the store. Lease Options: What differentiates the Neighborhood Goods model from conventional department stores is that brands can be flexible in terms of the space they take, how they use it and how long they sign up for. Some brands pay a flat fee to the company for the space, while others partner with Neighborhood Goods on a rev-share basis. A majority operate on a mix between the two. The company makes it easy for digital brands to test brick and mortar without having to take on the costs and complexities that come with opening a store. It offers a variety of leasing and space options that make it easy for brands to set up shop and rotate in and out. “Each brand’s partnership with Neighborhood Goods is tailored specifically to their unique goals — ranging the gamut of awareness, customer and email acquisition, testing new products and merchandising strategies, sales, awareness in a new market, or any combination of the latter,” said Alexander, who serves as CEO. “So while the brands are responsible for providing product, we also work closely with them on messaging and merchandising strategies, 9


creating impactful events and experiences in our spaces and more. Neighborhood Goods is designed for constant change and features a modular architectural system of retail spaces. The fixture components, which include fitting rooms and shelves, are flexible and can be easily reconfigured to meet a variety of in-store shop sizes. In December, Neighborhood Goods opened its second location, at Manhattan’s Chelsea Market. Similar to the Plano store, it houses a diverse and rotating lineup of contemporary brands and offers a variety of in-store activities, from trunk shows to wine tastings. The New York outpost also houses a convenience store concept, Pop Up Grocer, with in-wall shelves featuring up-and-coming consumer packaged goods brands. An on-site restaurant, Tiny Feast, is an updated take on the European snack bar and transitions into a cocktail bar in the evening. Neighborhood Goods is not interested in opening cookie-cutter stores. While its business model and visual language will remain consistent, locations will be customized to the locale, offering a different set of features and functions for the featured brands. Not only is this more beneficial for the brands, it also

makes for a local, more relevant experience for shoppers, the company said. “We’ve always talked about each of our locations being unique to a given market and providing a particular set of features to our brands and consumer alike,” stated Alexander. The company said it took a “more blended, boutique-esque approach” to the format of its New York store, which has a smaller (4,500-sq.-ft.) footprint and a higher density of brands and products compared to Plano. Neighborhood Goods is on track to open its third location this March, in Austin, Texas. Several others are expected to open later in the year. The company is also expanding in other ways, including introducing its own private label line of tees and totes at the end of last year. It is set to test and roll out a dashboard tool to its brand partners that will provide real-time reporting and analytics in a mobile-friendly, on-demand format. The platform will also allow Neighborhood Goods to pass anecdotal feedback, notes and reports from store teams to brands. Neighborhood Goods has garnered $27.55 million in funding across its Seed and Series A rounds in the past year and a half since it

>Neighborhood Goods makes it easy for DTC brands to set up shop, offering a variety of leasing and space options.

NeighborhoodGoods 10

opened, while growing its partnerships and accelerating its expansion plans. The company’s second holiday season at Plano was strong, with a 37.6% increase in traffic for the November and December period and an 88% increase in sales. CHICKEN SALAD CHICK Never underestimate the appeal of chicken salad. From one small location in 2008, Chicken Salad Chick, a Southern-styled, comfort food concept, has evolved into one of the nation’s fastest-growing fast-casual restaurant chains, with just over 150 eateries in 16 states. The business was launched out of the kitchen of Stacy Melton Brown, a stay-athome mom in Auburn, Ala., who, after perfecting her chicken salad recipes and dropping off sample offerings around town, started selling door-to-door. Informed that the home business was illegal, Stacy and her husband, Kevin Brown, decided to open a carry-out-only restaurant. Chicken Salad Chick has been on an upward trajectory ever since, expanding and building a strong purpose-driven culture based on spreading joy, enriching lives and serving others. Private equity firm Eagle Merchant Partners acquired a majority stake in the chain in 2015 and brought in Scott Deviney as CEO. Under his leadership, Chicken Salad Chick’s growth took off, with an active franchising program. The company which has more than quadrupled in size in the last four years. In December 2019, Chicken Salad Chick began a new chapter when it was acquired by Brentwood Associates, whose portfolio includes Veggie Grill, Blaze Pizza and Pacific Catch along with assorted retail and specialty companies. “Brentwood’s long track record of working with leading restaurant companies coupled with their understanding of our business objectives and strategy makes them the perfect partner for us to continue executing on our robust growth and expansion plan,” Deviney said. Expansion: Chicken Salad Chick ended 2019 — which it called its most successful year to date — with lots of momentum. The brand achieved its 16th consecutive quarter of same-store sales growth and reported a 4.4% increase in comp sales year-over-year. It opened 40 locations, for a total of 137 units at year-end, and entered two new states, Ohio and Illinois. MARCH/APRIL 2020 CHAINSTOREAGE.COM

Chicken Salad Chick > Chicken Salad Chick plans to open more than 50 locations in 2019. The company has no intention of slowing down anytime soon, and plans to open more than 50 restaurants throughout the Midwest and South this year, in states that include North Carolina, Ohio, Illinois, Kentucky, Virginia, Texas, Arkansas and Florida. Further out, Chicken Salad Chick is looking to open 250-plus locations within the next five years, with a goal of 400 units by 2025. “Looking at the year ahead, as our brand is poised for another year of significant growth, we’re energized to keep the momentum going and continue our accelerated expansion plans to bring more Chicks to communities across key regions in the U.S.,” stated Deviney. With an ideal size of 2,500-sq.-ft., and seating for 82, Chicken Salad Chick’s real estate strategy is largely focused on strip centers. But non-traditional locations such as airports and universities may play into its future. Chicken Salad Chick’s store portfolio isn’t the only thing that has expanded over the years. The menu now features more than a dozen different chicken salads — each made fresh daily — that can be ordered by the scoop, sandwich or bowl. Also available: homemade pimento cheese and other salads, soups and desserts. Customers can dine-in, take-out, drive-thru or order online. In line with its comfort food offerings, Chicken Salad Chick eateries have a homelike, friendly feel, complete with tablecloths and carpet. The warm and inviting atmosphere speaks to the heart of the brand’s appeal: food made fresh daily and served from the heart. CHAINSTOREAGE.COM MARCH/APRIL 2020

EYEBOBS An up-and-coming eyewear brand has its eye on continued brick and mortar expansion. Eyebobs offers a distinct alternative from the traditional, mostly bland eyewear shopping experience that still dominates the nation’s malls. An emphasis on affordable pricing, service that goes the extra mile, inviting interiors and fashion-forward frames is proving a winning strategy as the company moves deeper into the physical space. Founded in 2001 as a wholesale company, Eyebobs quickly gained a cult following for its boldly designed reading glasses. It entered the direct business in 2016 following its purchase by Norwest Equity Partners. Eyebobs expanded into prescription eyewear

in fall 2017. (Its readers had proved so popular that some customers were adjusting them to hold their prescription lenses.) That same year the company made an initial foray into brick and mortar with the opening of a retail “lab” at its headquarters in Minneapolis. The success of the space provided the company with the momentum to move forward with the opening of its first permanent store, at Mall of America in Bloomington, Minn., in 2018. It currently has six locations, with three new stores expected to open in the first half of 2020. Eyebob frames are also sold on the company’s ecommerce site and at more than 2,000 specialty stores nationwide. The company’s expansion is led by Mike Hollenstein, who was named CEO in 2017, and drove the launch of Eyebobs’ prescription eyewear offerings. “With plans for three-year revenue growth of over 30 percent at the conclusion of this year, now is the perfect time for Eyebobs to disrupt the traditional brick and mortar eyewear experience,” Hollenstein said when the company opened at Mall of America. “Retail gives us the opportunity to bring our one-of-a-kind customer service experience to a whole new audience.” Eyebobs offers distinctive frames in an array of shapes, sizes and color options. The assortment includes readers, prescription, progressives, blue light and polarized sunglasses. Any lens (Rx, Blue Light, sunnies, etc.) can be applied to any frame, providing customers with more than 25,000 possible


> Eyebobs combines affordable pricing and distinctive frames with personal service. 11


Deciem combinations. The “all-in” pricing starts at $89 for readers and increases to $129 for Blue Light, $199 for Rx and $299 for progressives. All frames are made by hand and exclusive to Eyebobs. As for Eyebobs’ target customer, it’s anyone who feels empowered to express their personality through their choice in eyewear, explained Hollenstein. “Some of our customers are in high school protecting their eyes with our Blue Light frames and some of our customers are in their golden years, feeling more confident than ever wearing bold, beautiful frames,” he added. “We find that all of our customers have an appreciation for quality, beautiful products. Service: The Eyebobs store environment is modern and stylish, marked by bold design elements and bright yellow accents that reflect the brand’s personality. Customer service is central to the experience. Associates are trained to look beyond face shapes in lending guidance, with a goal of providing customers with personal styling assistance to help them select the frame that best suits their personality. “Eyebobs is dedicated to helping every customer frame their personality and be their true and authentic selves,” said Hollenstein. DECIEM Deciem has been living up to its goal to disrupt the beauty industry since it was founded online in 2013. Based in Toronto, the self-described “abnormal beauty company” has grown from cult status to mainstream success as part of the increasingly popular movement advocating authenticity and full-ingredient transparency 12

> In line with its approach to product and packaging, Deciem stores have a straightforward, almost clinical look.

in beauty — both of which have been part of Deciem’s DNA since day one. The start-up has challenged the norm in skincare with its potent-ingredient formulas, a message mirrored in its minimalistic packaging and spartan stores that are counterintuitive from the traditional beauty environment. Deciem also has attracted considerable attention along the way; beauty giant Estee Lauder Companies bought a stake in 2017. “Through its unique business model, Deciem has produced some of the most creative independent brands on the market, capturing the passion and trust of devoted fans around the world — and they are just getting started,” stated Estee Lauder in a company release. Conceived as a skin care product incubator, Deciem, which is vertically integrated, produces six different skin care, grooming and beauty brands under its corporate umbrella, with more to come. Its signature and most popular offering is The Ordinary, a skintreatment line with clinical-grade ingredients and budget-friendly prices. The products come in laboratory-styled bottles and tubes. The main ingredient is listed prominently on clinical-looking white labels, enhancing the scientific-like branding. Stores: Following three years of robust direct-to-consumer sales, Deciem opened its first store in 2016, in Toronto. More locations followed, as did partnerships with other retailers such as Sephora and Ulta Beauty. Currently, it operates more than 50 stores globally, with nine in the U.S. In the spring, Deciem is scheduled to open its new headquarters in Toronto, complete with a retail flagship from which shoppers will be able to

view an on-site production facility. The aesthetics of Deciem’s stores reflect its “abnormal” theme. The spaces are clinical in appearance, with warehouse-style fixtures and exposed brick and white walls dominated by inclusive messages such as Beauty Is Being Human” and “Beauty Doesn’t Rinse Off” in oversized, bold text.” The streamlined, minimalist design puts the focus clearly on the products on display. “The main thing we want to create in our stores is we want people to be able to feel the brand,” Nicola Kilner, Deciem CEO, told Inside Retail Australia. “We’ve always been very strict that no staff are on any commission fees — no one has any targets — because we truly want to deliver what’s right for the consumer. We want people to feel comfortable and not like they’re being pushed or sold something they don’t need.” Deciem is a company that marches to the beat of its own drummer. Last November, for example, it closed its stores and website on Black Friday in protest of the rise of “hyper-consumerism.” Instead, it offered a 23% discount in-store and online for the full month of November across all its brands. “Hyper-consumerism poses one of the biggest threats to the planet, and flash sales can often lead to rushed purchasing decisions, driven by the fear of a sell-out,” the company said in an Instagram posting. “We no longer feel that Black Friday is an earthor consumer-friendly event….We strongly believe that skincare decisions should be based on education rather than impulse and hope that a month-long promotion will provide the time for research, reflection and consideration.” MARCH/APRIL 2020 CHAINSTOREAGE.COM




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California Consumer Privacy Act New law has wide-ranging implications for retailers By Alex O’Byrne With the California Consumer Privacy Act, or CCPA, now in effect, it’s a must that retailers get fully compliant or face consequences in the form of steep fines and damaged reputations. More than 500,000 businesses are said to be impacted by the ‘Californication’ of GDPR, Europe’s General Data Protection Regulation. At its core, CCPA is an uncharted legislature telling retailers to be a lot more responsible with consumer data. We’re living in a time where retailers must view data collection differently. It’s no longer a boardroom discussion or moral conversation, it’s a law. It’s worth noting that, compared to GDPR, CCPA takes a broader view of what “consumer” data means. The full scope of the law will be revealed by July 1, when enforcement of CCPA by the California Attorney General will begin. But we do know that CCPA allows Californians to request that businesses delete their personal information and not sell it. In addition, retailers will face large fines if data breaches occur, whether intentional or not. Even CCPA’s predecessors, such as 2003’s law CalOPPA (California Online Privacy Protection Act) for example, didn’t have such financial consequences. To avoid non-compliance and fines of up to $7,500 for each violation, retailers must tackle seven tasks. • Locate data with vendors Retailers need to conduct a full audit of where consumer data lies with third-party vendors and exactly what data they’re gathering. The good news is there are several newer technology stacks to lend a helping hand. Additionally, partners of retailers who have mined valuable insights from consumer data should know where their clients’ data protection stands. • Contact an attorney Amending vendor contracts has been commonplace for retailers since GDPR was

adopted. Retailers shouldn’t procrastinate. Instead, they should be on speed dial with their legal team to ensure that vendors are staying compliant. • Update privacy policies If retailers show a commitment to protecting consumer data by updating their privacy policy accordingly, it should bode well with shoppers. Retailers can be proactive by sending an email to consumers informing them of their right to have personal information deleted. With GDPR, shoppers have to opt in for a newsletter and can’t be added to a mailing list just because of a purchase. Wise retailers will turn this into a win by highlighting the benefits of signing up.

• Watch for rising implementation costs It’s projected that the total cost of compliance with CCPA will reach $55 billion. Since retailers are scrambling to get CCPA compliant, implementation costs have risen. In the coming months, there’ll be even fewer resources. Tip: find partners with GDPR experience and leverage their knowledge before the crowds come. • Get ready for questions Pre-document answers to consumer questions about how their personal data is stored and used. Be sure to have the communications departments and legal teams collaborate when crafting the language so it matches the brand voice.


• Reputation protection We don’t know what the accusatory CCPA hashtag will be, but it’ll surely pop up on social platforms. Retailers are aware that an upset consumer or employee can damage a brand in minutes, so staying vigilant via social listening tools is recommended. A no-brainer: this should already be activated. • Think beyond California CCPA may become California’s next big export as other states adopt the law. Since states are not unified on how for-profit organizations should protect consumer data, things will get complicated. Other states will pass laws that penalize businesses with data breaches, so getting a grip on data housing and usage now is key. Over time, consumers outside California may find they can ask businesses to delete their personal info as well. • Walk the walk and seize opportunity If retailers are truly “customer-obsessed,” they’ll view CCPA as a golden opportunity and not a burden. Brands are urged to illustrate how they protect what matters most — the use of personal data. By July 1, the smartest retailers won’t only be CCPA-compliant, but they’ll be boasting to customers how they abide by laws that look out for them. As retailers of all sizes continue to put effort into building and gaining consumer trust, increasing lifetime value and retaining customers, this new legislation — and future versions of CCPA — will allow for consumers to see them back up all those brand missions. — Alex O’Byrne is director and co-founder of digital commerce agency We Make Websites, which is part of Shopify Plus. MARCH/APRIL 2020 CHAINSTOREAGE.COM


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Experiential Retail Trends By Marianne Wilson and Deena AmatoMcCoy


American Girl

More than ever, it’s all about the experience in brick-and-mortar retail. Increasingly, retailers are tapping into experiential ideas to redefine their store spaces, immerse customers in their brand and engage customers — and give them shareable experiences that are not easily replicated online. Here’s a look at some of the newer trends that are influencing experiential retail. MICRO-EXPERIENCES Driven by experimentation and smaller “hands-on” experiences, so-called microexperiences provide brands with a way to keep customer engagement fresh. American Girl has long been known for its immersive experiences, but its new Manhattan flagship

uses a micro-experience to put a new spin on an old favorite. The store invites shoppers into “Julie's Groovy World,” an exhibit that highlights the characteristics of American Girl’s blond, long-haired 1970s-era doll named Julie Albright. Julie is an advocate for girls’ rights and making a difference — and she was introduced in 2007. While visiting Julie’s Groovy World, shoppers can shoot hoops at a 1970s arcade game; get tips on how to write a speech that could win an election (just like Julie did), and even take a selfie in a replica of the doll’s Volkswagen Beetle. “Stories are always at the core of our experiences,” said Barbara Carlson, senior direc-


tor of global creative services for American Girl, at the National Retail Federation’s 2020 BigShow in New York. “This microexperience not only immerses shoppers into the character’s world, it helped us give a 13-year-old doll new life.” Natuzzi, the high-end furniture retailer, is using mixed reality (MR) to create its own micro-experience in its flagship on Madison Avenue in Manhattan. Wearing a pair of augmented reality (AR) goggles, shoppers can visualize 3D furniture and décor in their home before they buy it. After a store associate inputs the customer’s room dimensions into Microsoft-supplied software, customers don the goggles to position pieces of furniture, including sofas, chairs MARCH/APRIL 2020 CHAINSTOREAGE.COM





and décor, within their personal space. By tapping virtual icons, shoppers move product images throughout the room, as well as choose colors, and magnify fabric texture or grains of leather. All 3D products are accurately sized to true dimensions, eliminating the need to physically measure an item before making a purchase. “We feature 100 collections, but only have space to feature 5% of merchandise at store-level,” Jason Camp, president of Natuzzi Americas, said. “Furniture retailing is a needs-based business, but success comes from creating emotional connections. Merging physical and digital experiences is important way for us to do business.” Six Natuzzi stores currently offer the technology, with 400 locations expected to come on board by the end of the year. All 1,800 stores will offer the MR experience by 2021. CIRCULARITY Extracting the maximum value from merchandise while in use — as well as post-use — is becoming top of mind for many customers and retailers. Savvy brands are repurposing store space to ensure they are making a difference in what’s called the circular economy. H&M, for example, is jump-starting its seven-year-old garment recycling service with “smart” recycling bins that not only accept donations, but also offer customers a new, engaging experience. The new bins, which recently debuted at H&M’s flagship on Fifth Avenue in Manhattan, house a digital scale and feature integrated digital screens. As shoppers deposit their bag of unwanted clothing into the bin, the integrated scale tallies the donation. The digital screen displays the weight of the donation, along with a QR code that rewards customers with a 15% discount coupon that can be used on a future purchase in-store or online. The code also directs shoppers to a website that outlines H&M’s sustainability efforts and goals, as well and the ways their donations make a difference. H&M plans to install the bins by yearend to its seven other U.S. flagship locations (Miami; Atlanta; Houston; Washington, D.C.; Chicago; San Francisco; and Los Angeles.) The fast-fashion retailer has a goal of

collecting 5 million lbs. of apparel by the end of 2020, according to the company. COMMUNITY FOCUS Vans, part of VF Corp. as opened its first-ever community-driven retail and event space. The new Vans outpost — the company’s first in downtown Los Angeles — celebrates its locale and pays homage to the city’s skateboarding roots and thriving art community. The two-floor, 11,500-sq.-ft. space features a mural by LA-based artist and designer Geoff McFetridge, who accentuated the raw brick and concrete walls of the building with his colorful, minimalist work. The walls are dotted with photographs taken by legendary skateboarders that highlight LA’s importance in skate culture. In addition to featuring a wide range of Vans’ footwear, apparel and accessories, the new outpost houses an in-store skate shop that stocks hard goods from assorted Los Angeles-based skateboard brands. The second floor is home to a community-driven gallery, lounge and workshop space, dubbed Studio808, that will offer hands-on art and design workshops, free of charge, with an aim “to build a platform for education to uplift underserved members of the community,” according to Vans. In line with its community focus, Vans partnered with nonprofit organizations Goodwill and Chrysalis, both of which have workforce development initiatives for previ-

ously homeless or at-risk youth, to recruit staff for the store. Staples is thinking outside the office with a reimagined store concept that is all about connecting. The new concept, Staples Connect, opened in six redesigned stores in the Boston area. More than a place to make a transaction, the format offers a place where professionals, teachers and students can connect and have access to customer-focused solutions and experiences, with hands-on learning opportunities. Among the offerings are a 500-sq.-ft. community space where customers can host or attend seminars and other events, and a dedicated podcast studio where customers can schedule a recording session. The space features a soundproof room with professional equipment for up to four people. The new format is also home to Staples’ co-working concept, Staples Studio, which it has been rolling out in select locations. In addition, every Staples Connect store offers tech services, print & marketing services, TSA pre-check enrollment and professional services, — including marketing, legal and tax and finance — offered by selected partners. The merchandise layout is designed around solutions for home offices, small businesses, and classrooms and includes nearly 1,000 new products and 40 new brands.




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Waste Regulations

New regs with big impact in 2020 By Wade Scheel Whether they own a single store or are a brand with a national presence, retailers face many unique challenges. Few of these challenges, however, have as much potential impact to a retailer’s brand and financial status as environmental and waste regulations. The increasing focus on regulations and enforcement can result in fines and violations that are both costly and detrimental to retail brands. One major retailer was recently fined nearly $4 million for non-compliant disposal of electronic waste, batteries and more. There are several key regulations that will impact all industries that generate waste in 2020, including the Hazardous Waste Generator Improvements Rule, varied electronic waste policies and further implementation of the e-Manifest system.

HAZARDOUS WASTE GENERATOR IMPROVEMENTS RULE As of December 2019, there are 25 states pending adoption of the Hazardous Waste Generator Improvements Rule. The rest of the states are anticipated to complete the rule-making process in 2020 or 2021. Once this rule is updated by each state, it will make other rules easier to understand and facilities more compliant. It will also provide greater flexibility in how hazardous waste is managed and close important gaps in existing regulations. Two key provisions where the EPA is finalizing flexibility are: 1. Allowing a hazardous waste generator to avoid increased burden of a higher generator status when generating episodic waste provided the episodic waste is properly managed. 2. Allowing a very small quantity generator (VSQG) to send hazardous waste to a large quantity generator (LQG) under control of the same person. Here is the most recent anticipated schedule of states and territories adopting the new rule.

• States Where Rule Is in Effect: Alabama, Alaska, Arizona, Colorado, Florida, Georgia, Hawaii, Idaho, Illinois, Iowa, Kentucky, Mississippi, New Jersey, New Mexico, North Carolina, Oklahoma, Pennsylvania, Puerto Rico, South Carolina, South Dakota, Utah, Virginia, Washington, West Virginia and Wyoming • Anticipated Rulemaking in 2020, 2021: Arkansas, California, Connecticut, Delaware, Indiana, Kansas, Louisiana, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nebraska, New Hampshire, New York, Nevada, North Dakota, Ohio, Oregon, Rhode Island, Tennessee, Texas, Vermont, Washington, D.C. and Wisconsin It is crucial for retailers to be aware of changes in the states they operate in, as rules differ state to state.

ELECTRONIC WASTE Electronic waste, also known as e-waste, is expected to grow by 17% in the next couple of years. With devices such as laptops, hearing aids, cell phones and even vape pens using lithium batteries, the industry must be proactive with implementing battery safety policies — including plans for recycling — to avoid fire damage, worker injuries and to avoid improper disposal. Retailers can also expect more options to fill the gap for environmentally friendly disposal of electronics in 2020. Today’s leading organizations know that sustainable business practices are no longer a trend — they are an imperative. To protect consumers, the environment and overall brand health, all procedures and operations must be managed with a commitment to conserving energy and achieving a higher level of sustainability through waste recycling, recovery, reuse programming and minimization. This allows all industries to achieve measurable, net-positive results at a reasonable cost when optimizing e-waste disposal.


E-MANIFEST Last year, the EPA established the Hazardous Waste Electronic Manifest Establishment Act, or e-Manifest, as a system to track hazardous waste shipments electronically in an effort to improve visibility to manifest data and minimize environmental impact. A few months ago, the EPA announced that e-Manifest submission fees were going up substantially for fiscal year 2020/2021. The user fees are changing due to various factors, including changes in projected manifest usage rates as well as program costs during this period. Though changes in e-Manifest rates were meant to incentivize a full move to electronic submissions, within the past year, only 0.2% of manifests submitted were electronic manifests. The following user fees will be effective through Sept. 30, 2021. • $8 per manifest (previously $5): Electronic manifest, both fully electric and hybrid • $14 per manifest (previously $6.50): Data and image upload • $20 per manifest (previously $10): Scanned image upload • $25 per manifest (previously $15): Mailed-in paper manifest Based on the slow adoption and increasing fees, the industry should continue to see more industry providers for retail businesses making the switch to fully electronic manifests or seeking alternative and costsaving methods on shipping regulated waste in 2020. In addition to these three hot topics, there are many other regulations retail leaders should keep their eyes on. Above all, retailers must find a way to properly adhere to these new policies and systems to remain compliant and penalty free in the future. — Wade Scheel is the director of governmental affairs for Stericycle Environmental Solutions. MARCH/APRIL 2020 CHAINSTOREAGE.COM


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Top Construction Trends By Marianne Wilson Construction activity in retail remained steady in 2019 as the overall construction industry continued to grow despite cost pressures, labor shortages and other factors. As to what’s ahead, here is a look at the top trends and future disruptors that Autodesk, a global provider of construction software tools, believes will impact construction in 2020. • Labor Shortage Continues The labor shortage that has been impacting the construction industry for years will continue in 2020 — and could get even worse. Autodesk, in partnership with the Associated General Contractors of America (AGC), conducted a survey on the labor shortage. Eighty-percent of the respondents reported having difficulty filling hourly craft positions, and 44% reported that the shortages are causing projects to take longer than scheduled. As labor shortages threaten to undermine the growth of the construction industry, contractors are taking steps to address the problem, including adopting ways to be more efficient through technology, the survey found. For example, 24% of firms reported they are using more labor-saving equipment, including drones, robots, and 3D printers. A similar share (23%) of firms are adopting methods to reduce time spent on onsite work, including relying on lean construction techniques, using virtual construction tools like building information modeling (BIM), and doing more off-site prefabrication. • Prefabrication, Modular Construction Remain Popular According to a MarketandMarkets Research report, the global market for modular construction is projected to grow to $157 billion by 2023, up significantly from $106 billion in 2017. Modular construction proponents say it is greener, faster and safer. While waste from a site-built dwelling may typically fill several large dumpsters, construction of a modular

dwelling generates much less waste. Also, because building and site work can be done at the same time, buildings can be completed as much as 50% faster, reducing the amount of labor needed. It is safer because complex assembly can be done at ground level instead of at great heights, and fewer workers are needed on-site. Modular construction can also lead to more versatile architectural design, foster a quality-controlled environment and reduce materials by 90%. • Automation and Machine Learning Increase Construction is full of manual, timeconsuming processes. As more construction companies adopt technology, automation and machine learning are going to be at the forefront to increase efficiency and save valuable time. In 2020, automation and machine learning will start to be more prevalent along with things such as 3D-printed construction, robotics, autonomous dozers and a semiautomated mason (SAM). In addition to the increase in on-site technology, preconstruction will see an uptick in automation and machine learning. And expect to see the use of more technology such as TradeTapp and Construction IQ to


create feedback loops between projects, teams, phases, general contractors and partners.

FUTURE DISRUPTORS Smart wearables, such as exoskeleton suits that allow workers to lift up to 200 pounds, are among the technology innovations and trends that will disrupt the construction industry in 2020. Another one is blockchain, which is one of the most disruptive technologies to touch construction because of its power to record, enable, and secure huge numbers and varieties of transactions, holding everyone who touches it accountable, according to Autodesk. And then there are 5G networks, which experts believe will impact construction efficiency in unprecedented ways. “With faster and more reliable connections, construction design using artificial intelligence and BIM (building information modeling) will be even more efficient, as 5G networks will allow everyone involved on a construction project to access all ongoing project information on a single design platform more rapidly,” Autodesk stated. 5G also offers communication improvement in tele-remote (essentially, remote-control) operations and in real-time video feedback, which is critical for efficiency gains and safe operation. MARCH/APRIL 2020 CHAINSTOREAGE.COM


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Lighting Rebates and Cost Caps Cost caps can play major role in final rebate amount By Randy Young Many people are disappointed when they see a high advertised rebate amount to only later get a much smaller rebate than expected. This discrepancy can happen because of cost caps. In the fine print on most rebate applications in North America, there is a cap of how much of the cost they will cover. This way, rebate programs ensure customers also contribute a fair amount towards the new lighting. We conducted an in-depth analysis of cost caps using our RebatePro tool to see the impact of cost caps on the actual rebate amount. Cost caps are based on either material cost or project cost (which is usually material cost plus labor cost, disposal fees, etc). According to our research, 37% of the rebate programs have cost caps based on material cost, while the other 63% are based on project cost. In some cases, the program may allow you to include internal costs (such as having an employee switch out lamps rather than an electrician) in the project cost with the appropriate documentation. How much do they cover? We see a lot of distributors and contractors looking for that golden opportunity, where they can sell lighting to their customers and have a rebate pay for all of it. Unfortunately, that isn’t that common anymore: Only 8% of programs cover up to 100% of the total project costs. Much more common cost caps are 100% material cost and 50% of the project cost. Keep in mind, these are just the cost caps. The rebate will still not exceed the determined incentive amount (i.e., the prescriptive or custom rebate amount). If you see a rebate program showing $15

TYPE OF COST CAP 100% of Project Cost 50% of Material Cost


60% of Cost

50% of Project Cost

per LED tube, make sure you read all the fine print that goes along with it. The actual rebate you get might be much lower. Here is an example showing the average rebate across North America for a 4' LED Tube and how it changes based on the price.

100% of Material Cost

Sales Price Average Rebate After Cap $5 $2.65 $10 $3.44 $15 $3.81

Midstream rebates, where the incentive is offered directly through a distributor and then taken off the invoice, usually operate a little differently. In many cases, these programs use a minimum customer contribution rather than a percentage of the cost. For example, a utility may offer a midstream rebate of $10 per fixture, but require the customer to contribute a minimum of $5 after the incentive. Cost caps can play a big role in the final rebate amount. If you’re working on a project, make sure you read the fine print and fully understand the cost caps involved.

*Based on replacing a 32W 4' T8 with a 14W 4' Type B TLED at 3,600 annual operating hours.

— Randy Young is marketing and operations manager of BriteSwitch, which specializes in helping businesses find and capture rebates and incentives for commercial buildings across the U.S. and Canada.



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This is the result of three months of fitting-room traffic at a major clothing retailer, prior to SCUFF-X® application. This fitting room was re-touched as part of a weekly maintenance schedule.

This is the result of three months of fitting-room traffic at the same major clothing retailer, following SCUFF-X® application.

Representative results. Actual results may vary.

It Doesn’t Have to Scuff Image matters. A clean store invites shoppers and drives business. You want your customers to see the front entrance, checkout area and fitting rooms still looking freshly painted, without the scuffs and stains that can often accompany heavy foot traffic. Ultra Spec® SCUFF-X® from Benjamin Moore offers superior scuff resistance in an easy-to-use, low-odor, one-component interior acrylic latex paint. It’s available in every Benjamin Moore®

color, so you can preserve and protect not only the decor, but also the brand experience. Excellent Service with National Accounts. The Benjamin Moore® National Accounts Program offers streamlined purchasing, centralized billing and the same negotiated price for all your locations. Our dedicated project management team can support your new location openings and remodeling projects.

FOR MORE INFORMATION ABOUT SCUFF-X AND OUR NATIONAL ACCOUNTS PROGRAM, VISIT benjaminmoore.com/nationalaccounts OR CALL: 888-236-9962, (option 4). ©2018 Benjamin Moore & Co. Benjamin Moore, Paint like no other, Scuff-X, the triangle “M” symbol, and Ultra-Spec are registered trademarks licensed to Benjamin Moore & Co.





Michael Ecke heads up the Retail & Restaurant segment for Benjamin Moore’s National Accounts team. He is regarded in the industry as a “strategic solutions specialist” in helping retail & restaurant chains maintain an industry standard for durability, brand & color consistency. Michael currently serves on the 2020 SPECS Advisory Board and is dedicated to its members, both retailers & suppliers in the industry.

The Benjamin Moore National Accounts Partnership Program makes it easier to buy and manage paint, color & coatings. Our new online ordering platform offers access to all Benjamin Moore products at consistent, negotiated pricing. Aimed to at help you reduce the cost of ownership of any painting project, the National Accounts Partnership Program combines tailored service with online efficiency So we have listened to your needs in a fast-paced, busy world and have a solution. We’ve invested our resources and expertise into a proprietary portal with an online catalog that allows retail & restaurant brands to place orders electronically that we can fulfill anywhere around the country. If you have a need for five gallons or 500 gallons in the city you are working in, you can place that order for the right color and the right sheen using a simple drop-down menu for local pickup or delivery to your jobsite. This is a simple solution, especially for companies with proprietary colors. Right now, we’re focusing this new service in the busiest of all verticals, the retail and restaurant industry. What are some of the features and benefits of online paint ordering? We make it easier to order the right products and colors for every job. Contractors specification documents, which may not be accurate or dated based on types of stores the brand has, and there may be many. Our new online ordering portal features a proprietary catalog for your store or restaurant, which will ensure that they’ve received the most current documents and color specifications. Our customers are billed electronically, adding extra efficiency. The portal also can effectively track what paint is going where. For example, a client can check in, see that 100 gallons of the correct Benjamin Moore specification was ordered and track it to the jobsite or store number to where it’s being used. It prevents changing the specification and reassures the corporate brand that the right products were used on the job. You can actually fulfill orders that large? Yes! We fulfill orders from a few gallons to several hundred gallons, whatever the job requires. What are the primary benefits of being a National Accounts Partnership Member? Our partner members are usually facility managers, paint contractors or store planning executives who can go into our online portal to view their own proprietary catalog of specifications to make sure they are up to date and, most importantly, to see who is purchasing against their own catalog. It’s a great way to track paint spend along with insuring that painters are buying the correct specifications to provide them with the right colors, sheen and products that they want.

What is a major challenge that a facilities manager deals with in repainting hundreds of stores per year? There are many. First off, the most important person in the refresh program is the facilities or project manager. Paint is often the last item on their “to do” list and it always ends up being the most important! With our new online ordering portal you can go online, order and pre-schedule your paint orders to arrive in different locations and to include your own preset future delivery dates, or you can have your painter pick up paint (will-call pickup at counter) from one of our over 5,000 Benjamin Moore stores. We solved the need for one brand color consistency in all of your stores & restaurants This is a simplified online approach that ensures that all are operating on the same page. This results in a satisfied customer, a successful paint job, rare recalls and no wasted time and money. Every piece of information regarding the specifications is up-todate, minimizing any risks of a poor finished project. Everything stays on brand and on spec. This is particularly critical in circumstances where Benjamin Moore has created a proprietary color. We’ve done that for a number of chains — these are shades that appear in some of the most famous stores in the world, and only there. How does this portal achieve efficiency? The headquarters executive, the general contractor or the subcontractor can visit the portal and order as much paint as one job or multiple jobs require. We send that order to a local Benjamin Moore dealer, who will fulfill it with the right paint at the right time at the retailer’s convenience. It’s great for the extremely large orders, as well as smaller maintenance orders we fulfill, as we deal with many big box stores around the country. The menu is extremely easy to use, whether someone is tech-savvy or not. Does that mean that there’s one price nationwide? Yes. We create a national average of paint prices from around the country, so we can achieve economies of scale. This allows for our clients to plan their budgets much more effectively because they’re getting a nationally discounted rate via the portal. Do you plan to expand the portal in other ways? Eventually, yes. We’ll likely include accessories such as rollers, brushes, tapes and drop clothes at some future date to ensure that our top-of-the-line paint is applied in the best possible way. So in summary, is there any other paint that offers all of these advantages? We don’t think so! Our products will save you time and money along with reducing your repaint cycles.

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Trending Topics By Marianne Wilson STOP & SHOP DEPLOYS FUEL CELLS Stop & Shop is converting 40 of its stores in Massachusetts and New York to fuel cell technology as its looks to better serve customers during severe weather and also reduce its carbon emissions. The supermarket retailer is deploying Bloom Energy’s fuel cells, or “energy servers,” which will provide clean and reliable 24/7 electricity that will continue to power each Stop & Shop location in the event of a grid power outage. The servers are configured as a microgrid that can operate independently of the local electric grid and receive their natural gas

or biogas fuel through the underground pipeline system. This makes them much less susceptible to the impacts of extreme weather than overhead power lines, according to Bloom. The fuel cells convert natural gas or biogas fuel into electricity without combustion, using solid oxide fuel cell technology. They use no water in normal operation,

resulting in what Stop & Shop expects will be an annual savings of more than 1.6 billion gallons of fresh water.










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WALGREENS INVESTS IN ENERGY EFFICIENCY Walgreens Boots Alliances detailed its efforts — and progress — in energy efficiency in the the company’s 2019 Corporate Social Responsibility Report. Investments in fiscal 2019 included $146 million in HVAC units and LED interior lighting retrofits across nearly 2,000 stores, with energy saving per store of 45- to 50%; Some of the highlights with regards to the U.S. Walgreens division include: • Recognition by the Department of Energy Advanced Roof Top Unit (RTU) Campaign for achieving the greatest number of highefficiency RTU installations and advanced RTU control retrofits for a large portfolio owner. The company installed more than 4,300 RTUs with high-efficiency units and controls, for an annual energy savings of 39M+ kWh; • Ongoing installation of in-store wireless lighting control systems that provide an additional 25% reduction in energy use; and • Ongoing replacement of refrigeration equipment with installations that use lower GWP refrigerants. Across Walgreens stores, all new immediate-consumption refrigerators — smaller beverage units near check-out counters — use natural refrigerants. (The commercial market in the U.S. presents challenges in regard to conversion of walk-in refrigerated cases to ultra-low GWP refrigerants.)

On the waste management front, Walgreens expanded the zero-waste-to-landfill program from its distribution centers to its corporate campus in Deerfield, Ill., following a waste stream audit by recycling consulting firm the Astor Company. The program involves single-stream recycling plus cardboard recovery, a six-fold increase in recycling containers with improved signage, employee education about the program and food waste composting from cafeterias. Learnings from the corporate campus and the distribution centers will be used to expand recycling at Walgreens stores, where the bulk of the company’s waste is generated. The chain has begun to develop zero-waste-to-landfill pilot programs for stores and is testing ways to simplify preparation of cardboard for pickup and to collaborate with other businesses to contract recycling vendors. In addition, as part of its HVAC and LED upgrades, Walgreens required that all materials from the retrofits, including refrigerants and copper, be recycled. In the case of HVAC equipment, this required developing an engineering procedure for contractors to follow to ensure materials were properly handled so that energy efficiency improvements did not undermine waste reduction efforts, the company explained.




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Fabletics Flexes its Muscles Activewear retailer brings digital experience into physical stores By Dan Berthiaume A fast-growing activewear retailer with a celebrity connection is applying lessons learned as a pure play e-commerce operation to its brick-and-mortar experience. “We were founded as a digitally native, member-based retailer,” said Ron Harries, head of retail, Fabletics, part of El Segundo, Calif.-based TechStyle Fashion Group. “We want to drive our omnichannel customers through cross-channel commerce.” Counting actress Kate Hudson as one of its founders, Fabletics launched online in 2013, and opened its first physical store in 2015. It currently has 38 stores, with the goal of opening up to 100 locations nationwide. “We tried different formats in A-plus and B-plus malls,” recalled Harries. “We tried locations with competition close by and locations with competition not there. Fabletics did better in higher-quality malls with lots of nearby competitors. It leads to there being a lot of people looking for high-quality products at fantastic value.” Membership is not required to shop at Fabletics. “However, guests [non-members] are not eligible for the special discounts and perks that are offered to members,” Harries explained.

According to Harries, about half of in-store shoppers and 30% of online shoppers at Fabletics are guests, with the balance represented by returning or acquiring members. Seamless: To ensure that members and guests have a consistently seamless in-store shopping experience, Fabletics has developed and deployed OmniSuite, a proprietary, cloud-based enterprise retail platform. The solution combines e-commerce, POS and order management solutions with backoffice systems in an effort to bridge the gap between in-store and online operations and experience. “Anything in the store can be bought online and vice versa,” explained Harries. “We have iPads outside and inside the fitting rooms running a solution called OmniShop that allows everything that goes into the fitting room to be scanned into a cart, which allows us to track what goes in and is then purchased or not purchased. It also provides real-time awareness of what the customer tries on, so we can compile data for actionable points.” The solution also provides Fabletics with an opportunity to interact with customers in a way that avoids the awkward moment of an associate either standing right outside the fit-



ting room door or not being attentive enough, added Harries. “Associates interact when the customer wants them to,” he said. By scanning fitting room items into an online cart, Fabletics enables shoppers to save items they decide not to buy. They can then log into their member account to purchase goods later, as well as search the retailer’s complete online inventory for desired products in different sizes and colors. The OmniSuite platform and its applications enable Fabletics to deliver personalized service with a 360-degree view of customer transactions and interactions across all channels. The retailer also has the ability to deploy it outside its own stores. “We can roll OmniSuite out anywhere there is secure WiFi or cell service,” said Harries. “We have done pop-ups. We could also do an activation at an office.” In keeping with mission to provide a seamless omnichannel experience, Fabletics offers in-store returns of online purchases for members. “Each item has what we call a license plate number (LPN) linked to a specific member transaction,” said Harries. “We can get historical data on the purchase from the member account by scanning the LPN, so there is no need for a receipt.” As part of its aggressive store expansion, Fabletics is updating its store design to create a more appealing and customer-centric environment. “The original store design was on the dark side,” said Harries. “We wanted to add technology and atmospheric elements. Atmosphere matters, we call it ‘lit and fit’ — great lighting and open atmosphere with great music and aware associates.” Specific ongoing changes to the retailer’s store design include a lighter color palette and a more open fitting room experience, as well as the addition of in-store technology. Fabletics’ efforts to transform its brick-andmortar experience are paying off. Comparable store sales rose 34% in 2019 compared to the previous year. Traffic conversion increased 15% during that period, and overall traffic also rose. MARCH/APRIL 2020 CHAINSTOREAGE.COM


A New Dawn for Retail Design By Dimple Manghani

In just a decade, retail saw the decline and return of in-store shopping. The 2008 recession led to universal skepticism on the future of brick-and-mortar stores, and retailers hesitantly continued expansion plans in the 2010s. In a reinvigorated yet unpredictable market, brands wanted to remain nimble. Retail expansion began gaining traction in 2012. That year, Instagram was purchased by Facebook, a week after the app’s Android release led to over 1 million downloads. What was once feared to be the retail apocalypse was instead a call for systemic disruption. The millennial generation came of age in the aftermath of the recession and in the height of technological advancement and increased globalization. Millennials became accustomed to convenience powered by their devices— whether it was posting online, paying for their morning coffee, or checking the reviews of their next purchase. However, they also craved social activities like work-out classes, concerts and fine dining. During the last 10 years, the definition of retail has shifted from shops selling products to branded environments that offer a sensory experience. The forces that have reshaped retail over the last decade include new behaviors among millennial shoppers, global competition and technology acceleration. Retailers have since welcomed these changes as a guide for their brand marketing. Starbucks launched mobile wallets for customers to order, pay and access perks. Amazon’s guaranteed delivery in only two days promoted their service’s efficiency. Shopping itself has become a shared experience, with 84% of shoppers consulting a social media site, like Instagram, prior to purchasing. Brands have become dependent on customer reviews and high-profile influencer endorsements to gain potential customers’ trust. As the retail world continues to adjust, our design tactics must disrupt the standard shopping experience. Retail stores have been creating synergy between retailers’ digital content and physical spaces, optimizing data to enable “phygital” retail. Retailers are installing captivating, “Instagrammable” displays into

stores to encourage visitors to share online and see in-person. Social media walls showcase how real customers use and promote products. Sephora’s artificial reality mirrors encourage customers to test any product digitally. Clothing retailer Reformation has touch screen displays in dressing rooms for visitors to view and request options and customize the rooms’ ambiance. Digital displays enliven the space, catch the eye of passing customers, and facilitate moments of digital interaction.

The millennial generation largely reshaped retail in the past decade, but the expectations of Gen Z are the future of retail design. Entrepreneurship, social responsibility, transparency and embracing differences drive this generation. Experiential retail is at the forefront of retail design, where shops host exclusive experiences by blending retail and hospitality, retail and workspace, or creating multi-functional retail and event spaces. In-store events, like product launches and meet-and-greets, entice shoppers to visit store locations. Apple hosts “Today at Apple” events for customers to test products while learning new skills. Athleisure brand Lululemon hosts yoga classes at their in-store studios and has brand ambassadors to keep a pulse on local communities. Department stores like Bloomingdale’s are dedicating floor space to in-store bar and restaurant concepts for shoppers to enjoy without leaving the store. Pop-ups allow online brands to build excitement in online communities while testing the brick-andmortar experience without extenuating leases and high startup costs. Future of Retail Design The millennial generation largely reshaped retail in the past decade, but the expectations


of Gen Z are the future of retail design. Entrepreneurship, social responsibility, transparency and embracing differences drive this generation. Brands are considering how to visualize their values in their spaces to connect with conscientious consumers. New retail models centered on Gen Z’s values will redefine experiential retail. Retail subscription services, like Stitchfix and Honest, have exploded during the past 5 years as an at-home personalized shopping option. Resale concepts such as The Real Real, ThredUp and Patagonia Worn Wear provide affordable luxury while promoting sustainable shopping options. Beyond “recommerce,” climate conscious and ethically responsible brands are filling the market with high-end alternatives to fast fashion. Everlane coined the phrase “radical transparency” by dissecting and reporting each item’s cost and manufacturing conditions. Allbirds’ integrates their sustainably sourced materials into visual displays at each of their global locations, rooting their retail design in their core value of sustainability. As these ecommerce brands open physical locations, their values develop into the in-store experience to assure customers that the brands’ values align with their own. New market models create opportunities for retailers, architects and designers to constantly adapt — integrating technology, implementing flexibility in store design and activating the human experience, all while looking to the brand story and consumer journey for design inspiration. As the market continues to evolve, the retail industry must stay rooted in making the shopping experience a social experience. New lifestyles constantly shift purchasing patterns, forcing retailers to think creatively about how to capitalize on the shifting behaviors and values of their future audiences. — Dimple Manghani is principal at MBH Architects MARCH/APRIL 2020 CHAINSTOREAGE.COM

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Paint: A Retail Brand’s Secret Weapon Eric Fitzgerald is VP of Sales for PPG Services. Eric has been in the paint industry for 10 years, first on the product sales side and later selling services for Paintzen before PPG Services’ launch. PPG Services is backed by PPG Paints, an international coatings giant with 139 years in the industry. That knowledge, paired with the tools and technology being developed by Paintzen, gives the PPG Services team a unique position — grounded in experience but led by innovation. The PPG Services program was developed with input from customers to create a mutually beneficial solution for both our clients and our painting partners. Visit ppgpaints.com/services to learn more!

retail facilities managers think paint is paint Q Most is paint. Are they wrong?

Paint is paint — until it’s applied terribly, scuffed from high traffic or mixed in the wrong shade for your brand. Get the wrong product and your walls will look cheap, will scuff easily, and won’t adhere to your brand guidelines. Hire the wrong painter and you’ll be finding paint drips and uneven surfaces for weeks. It’s worth spending the time to perfect your painting program to ensure you’re getting the best quality — your business is worth it!

Many retail properties are reimagining themselves Q to remain relevant. How important is paint to that process? Retailers are finding new ways to make paint a more prominent part of their spaces. We’ve seen some amazing uses of color on columns, ceilings, build-ins, shelving, and other features within retail locations to really bring brand to the forefront and highlight merchandise. Paint keeps properties feeling clean and fresh, especially during high traffic periods, and ensures a positive customer experience.

Q Is the repainting process deceptively complicated? It’s not deceptively complicated, it’s clearly complicated! If you’re a retail manager with stores across the country planning a repaint across of all (or even most) of your stores, you must find, vet and hire professional paint crews for every job, juggle multiple work orders that may vary in price, and oversee each job to make sure the quality is right and that the final product is consistent across every store.

Q Are there new challenges?

We’re seeing two big shifts in the industry: 1. A growing need for speed and innovation. Businesses are

challenged with finding ways to streamline their processes. That means everything from providing a quick, efficient checkout experience for customers to behind-the-scenes processes like painting and other maintenance tasks.

managers should find resources to deal with maintenance needs so they can focus on day-to-day management.

there new systems or technologies that Q Are retailers should be aware of?

Traditionally, maintenance programs have been very manual and hands-on. Many retailers are adopting national facility maintenance software platforms to more efficiently handle maintenance needs including HVAC, cleaning, flooring and more. Our platform serves a similar need, specifically for interior painting, exterior painting, wallcoverings and any other paint service needs.

can be done to make managing a portfolioQ What wide repainting program easier?

There are two main goals in simplifying portfoliowide painting programs. The first is reducing the number of contact points. Rather than handling multiple jobs simultaneously (thus managing numerous contractors and distributors), finding a way to consolidate individual projects onto one contract overseen by a single team or individual will make managing a national painting program more efficient. The other goal is incorporating technology to get better insights into the details of projects. This will help retail managers determine cost savings and help them reallocate budgets accordingly.

does having working with one specialist Q How save time, money, stress?

Without a streamlined process or a partner to coordinate programs like this nationally, it’s easy for businesses to lose money. Your costs for product and service will vary greatly by location, depending on location and the types of products used. A centralized program can better control the costs, while also ensuring retailers are getting the same products and quality across the board. The time-saving aspect is really what retail managers must be writing home about. Managers will literally go from spending weeks coordinating projects to just a few hours. Think of what you could do for your stores with all that extra time!

2. A move from “bricks” to “clicks.” Fewer people are visiting physical retail locations. This means retailers should be capitalizing on when they do, and creating a great experience for them. Aesthetically, stores should be updated, fresh and on-brand, and

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Facility Services Streamlined

A shortage in skilled labor and tradespeople is creating new challenges for facility services managers, according to Jason Hayes, VP of sales and marketing, Rogers. Hayes spoke with Chain Store Age about how Rogers can help managers streamline their facility maintenance process by providing one point of contact for electrical, lighting, plumbing and other services.

What trends are you seeing in the use of electrical and lighting systems in retail stores and other specialty outlets? We think 2020 is going to be the year of personalized customer experience for retailers. We are seeing an increase in mobile interactive technology, locker and kiosk programs, hyper-personalized digital experiences, sensors, camera demographics — the list is endless. Retailers are now focusing on services, experiences and environments on top of selling products. Another exciting change we are seeing in our space is utilizing power over ethernet technology into the IoT to meet sustainability goals and create cost savings for retailers’ facilities teams. What are the biggest facility maintenance challenges that retailers face in their dayto-day operations? We have seen retailers’ facility teams tackling the need for dependable and reliable vendors as well as a shortage in tradesmen, making it difficult to get qualified technicians on-site within their SLA requirements. And what is the biggest mistake they make? Often, many retailers are more concerned with hourly rate than total cost of repair. Taking a penny and dime approach as opposed to looking at a holistic one can create larger costs and bigger headaches over time. Tell us a little about Rogers and the services it provides. As a self-performing service provider, Rogers specializes in providing management, labor, materials and equipment to install and maintain electrical, lighting, HVAC, plumbing and other facility solutions. With licenses in 48 states and technicians servicing locally, Rogers

has the capabilities to provide solutions to rollout installation, on-demand, preventative maintenance and construction needs. What sets Rogers apart from the competition? Rogers is the largest self-performing electrical and lighting contractor in the U.S. With 37 years in the industry under our belts, we have grown our business to over 1,500 strong employees within the 48 contiguous states. We are able to monopolize cost structures for our clients due to in-house teams. We control cost, consistency of work and the communication back to the customer by eliminating layers. Why is it important that Rogers is a selfperforming contractor — what are the benefits to its customers? Current labor shortages nationwide are creating gaps in the marketplace for clients and this is only increasing going into a new decade. Sub-contractors are picking and choosing which work to do while we are holding and maintaining pricing and service levels due to our manpower nationwide. We have been an industry leader since 1983 and are proud to maintain our manpower, supported by our 12 offices nationwide with our hub-and-spoke system approach. How does Rogers help retailers optimize performance and proactively cut facilities costs? Rogers is striving to become the leading one-stop shop for our clients and to offer a top-notch turnkey solution. With our capabilities in remodels, construction, service and maintenance, we can leverage our on-site presence within multiple trades and scopes. Our manpower density nationwide allows us to optimize travel costs allowing


us to offer better rates. This also allows our technicians to become familiar with retailers’ locations offering more efficient services as well as less management with several contractors for our clients. Can Rogers manage national rollout projects? Does peanut butter go with jelly? The crux of what Rogers does is managing national rollout projects. We specialize in complex electrical deployments in a large geographic area within a compressed amount of time. What type of project management services are available? Rogers is more than just a mere electrical contractor — we are more than just labor. We have a team of 50-plus project managers, coordinators and assistants structured to support the requirements of our client nationwide, from small-scale to multi-site, and develop comprehensive implantations plans, or RIGS (Reset Implementation Guides), specific to the client needs. If you could give one piece of advice to retailers regarding their facilities programs, what would it be? The rise of e-commerce has placed increased burden on brick-and-mortar locations to deliver heightened customer experiences in an effort to drive traffic and cut costs. Retail must be careful not to shift too many dollars toward experiences and away from facilities maintenance. Consumers are constantly judging the retailer on environmental conditions of the store such as bathrooms, air comfort, lighting, cleanliness, etc. If you wish to make your store a destination for consumers, don’t forget or neglect the basics. MARCH/APRIL 2020 CHAINSTOREAGE.COM



MARCH 14-16, 2021 The Gaylord National Resort and Convention Center National Harbor, MD

For show updates or to join our mailing list: FBatuta@ChainStoreAge.com or 212.756.5269

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For exhibitor information: RRuzalski@ChainStoreAge.com or 212.756.5268




Trending Stores: It’s every kid’s — and candy lover’s — dream. It’Sugar opened the “world’s first department store of candy” at American Dream, the 3-million-sq.-ft. mega-retail and entertainment center in East Rutherford, N.J. (At press time, the bulk of the center’s retail and restaurant tenants were scheduled to open sometime in March.) A three-storytall replica of the Statue of Liberty covered in more than 1.5







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million Jelly Belly beans stands guard outside the entrance of the three-level, 22,000-sq.-ft. store. The first-floor centerpiece is a garden-styled area filled with nearly 10,000 lollipops and surrounded by some 5,000 sq. ft. of candy bins. An Oreo café concept is set to open on the store’s third floor. … Warner Bros. will open a Harry Potter flagship this summer, next to the Flatiron building in Manhattan. The three-floor 20,000-sq.-ft.-plus store will be designed to evoke the “magic of the Wizarding World,” promised Warner Bros., with numerous photo opportunities and interactive experiences. It will house the largest collection of Harry Potter and Fantastic Beasts products under one roof. … High Times — the magazine that has advocated for the legalization of marijuana for 45 years — in entering the retail business. It will open two flagships, in Las Vegas and Los Angeles, offering cannabis under dispensary licenses. The stores will be branded with the High Times name and will carry High Times logo memorabilia and other licensed products of the company along with cannabis products from some of the top brands in the respective states. … Topgolf Entertainment Group unveiled a smaller format — Lounge by Topgolf — combining an upscale restaurant


Get the latest news on retailers’ expansion and remodeling programs, new store prototypes, green initiatives, facilities updates and more. Find out who’s opening stores and where. CSA StoreSpaces covers retail development and facilities management inside and out.

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and bar with virtual gaming. Located at Kirkland Urban, a new 1.2 million sq.-ft. mixed-use project in downtown Kirkland, Wash., the 9,200-sq.-ft. venue includes five entertainment bays where customers can play virtual golf and other sports such as dodgeball and hockey — with the games powered by Topgolf’s SwingSuite technology. … Ikea is building a store in Vienna that will cater specifically to urban dwellers who use public transport. The seven-level, 232,000-sq.-ft. structure will have no on-site parking. But it will have an expansive green façade and a publicly accessible park on the roof terrace. Ikea envisions the store, which will also have eateries and public spaces, as a meeting place for the area. All large items will be delivered directly to the customer within 24 hours. Designed by Querkraft Architekten in collaboration with Ikea architects, the building’s exterior will be dotted with large balconies featuring a total of 160 trees. Ikea is integrating other businesses into the building. The two upper floors will contain a hotel targeted to younger patrons, complete with a rooftop restaurant and bar.



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The Breakout Artists The secret’s out. Everybody’s gotten the word. Retail centers are no longer about retail, they are about — all together — experiences! So everybody knows that big changes need to be made to survive in the New Retail Century, but not everybody knows just how to go about turning the local enclosed mall into Fun Central. Some do, however, or have just worked hard enough or taken enough chances to set their strategic plans on the right path. This month, we take a look at eight of them, and they all have different stories. Michael Markman and BET Investments took the most direct approach: Tear that old thing down and build the new thing. As a private company, they were better positioned than most REITs would have been to demolish the Granite Run Mall in suburban Philadelphia and replace it with Promenade @ Granite Run, an 840,000 sq. ft.outdoor center with luxury apartments. BET bought the highly trafficked location for a song at auction and spent years getting permissions and permits. By the time ground was broken, upscale housing projects were being erected a mile away and the local hospital had announced a $300 million expansion. “A lot of the open-air retailers that were around the old mall jumped and went down to Concordville, and here we were with 80-odd acres in a great location,” reflected Markman. Though they gave it a new skin and an interior makeover, Paul Weinschenk and Peterson Companies left their beams

and foundations intact at RIO in suburban D.C., instead tearing down and rebuilding the tenant roster. “We love our long-term leases, but over time some of the tenants we originally would have given our limbs to get were no longer relevant,” observed Weinschenk. “We weren’t hitting on all cylinders.” Want some new-age retail inspiration? Head down to Alpharetta, Ga., home of the renowned Avalon project and now RocaPoint Partners’ Halcyon, an instant community comprised of apartments, a score of eateries, quaint shops, and town homes, apartments, and single family houses. RocaPoint principal Phil Mays is a native Californian who took a page from Rick Caruso in imagining Halcyon. “If you look at the Caruso projects, it’s clear. The more things you gave people to do other than go into a store, the more successful you were going to be,” Mays said. Few can argue that the world champs of “other things to do” in malls are the Ghermezians, builders of The Edmonton Mall and Mall of America. One who will take issue with that statement, however, is Triple Five CEO Don Ghermezian himself, who opened American Dream in New Jersey last fall. “We’re 20 years behind the rest of the world. China has been building big projects for 20 years,” Ghermezian said. “So we sat down as a family and said, look, if we’re going to put this project together, it’s got to be a game-changer. We partnered with Nickelodeon and Dreamworks and built a $600 million theme park. We wanted something to put us back on the world stage.” So now you know. Breaking out is hard to do.

Al Urbanski aurbanski@chainstoreage.com @AlUrbanski (Twitter) MARCH/APRIL 2020 CHAINSTOREAGE.COM

lifestyle grocer mixedduse development


Breakout Centers of 2020 A Breakout Center is one that — be it brand new or reinvented — was put together to cater to the needs and wants of 21st Century consumers. Here are eight of them. By Al Urbanski

Promenade @ Granite Run — Media, Pa.

American Dream — East Rutherford, N.J. It was called the White Elephant on the Turnpike. It was branded the ugliest structure in New Jersey — and that was by the governor. But after three owners and 15 years in the making, the project once known as Xanadu shed its multi-colored patchwork skin and opened in October as a pristine, white theme-park-cum-shopping-mall under the direction of the North American masters of that genre, the Ghermezians. Don Ghermezian (pictured above), the leader of the second generation of mega-mall-makers, never doubted that his American Dream would become reality. “Growing up, my father would always tell us that it takes the same amount of effort to build a hamburger joint as it does a project like this. There’s still just 24 hours in a day, and to do either you’re going to have to put in 16, so you might as well shoot for the stars,” said Ghermezian, who is president and CEO of the family’s development company, Triple Five. For now, just the Nickelodeon theme park, the skating rink, and the Big Snow indoor ski slope are open. The retail portion doesn’t open until March, but early attendance has Ghermezian convinced that American Dream can thrive as a shopping and entertainment destination in the shadow of New York City. Every weekend during the holiday season, the theme park sold out and people had to be turned away. That bodes well for the retail wing, he says, which will fill out in phases over the coming year. Some signed tenants will have delayed openings because they re-thought their footprints when they got a look at American Dream’s dimensions. “Uniqlo started at 10,000 square feet and went up to 20,000. Arizia is building the biggest store in its chain here. Primark will be 50,000 square feet,” Ghermezian said. American Dream’s success is Priority One one for Ghermezian and his cousins. “We want American Dream to be the game-changer for the younger generation of our family,” he said. 42

When the Granite Run Mall in this Philadelphia suburb was demolished in 2015, it served as an image of the demise of the enclosed mall on CBS News. Today, the site can ably serve as a symbol of the new era of retail-oriented centers. BET Investments bought the old mall at auction in 2013 after former owners Simon and Macerich (who paid $130 million) gave it back to their lenders. BET’s reasoning was that, while the mall was no longer viable, the 86-acre property was still positioned for success if a more suitable concept sat on it. There are 768,000 people living within a 10-mile radius of Granite Run. That’s 170,000 more than the nearby King of Prussia Mall and 450,000 more than the neighboring Exton Square Mall. “We have the Baltimore Pike bringing 50,000 cars going by the property every day,” said Michael Markman, president of BET investments. The area didn’t need another mall, but it did need more housing and a quality open-air center. After a few years of tenant negotiations and government approvals, Granite Run Mall became Promenade @ Granite Run, a mixed-use facility featuring 400 luxury apartments and an 830,000-sq.-ft. center anchored by Sears, Boscov’s and Kohls. There are 40-plus more in-demand tenants the likes of Cinemark, Acme market, Modell’s, Petco, Miller Ale House, Edge Fitness, and Panera Bread. “We observed that value retailers and entertainment options were in short supply in the area, and there were no new apartments closer than nine miles away,” Markman said. “A lof of B and C malls are trying to reinvent themselves but, short of tearing the mall down and starting over, it’s tough to do.”






Columbia Gorge Outlets — Troutdale, Ore. When is an outlet center not your typical outlet center? When some of the same customers show up twice a month or even once a week. Once a quarter is the average visit frequency for customers in the market area, and it’s once in a blue moon for tourists who may never pass that way again. But Time Equities Inc. felt they could (ahem) break out of that pattern when they bought Columbia Gorge from Simon five years ago. “What we’ve done is taken a center that’s been a once-aquarter visit and made it more of a neighborhood, or even community center by driving traffic with attractions and event,” said Ami Ziff, director of national retail at TEI. With the help of The Woodmont Company, which took over management of the center in 2016, TEI undertook a major capital improvement program that included renovation of the facades, enhanced signage, and a re-focusing of the marketing programs using social media. New brands added included Pendleton Home, Bath and Body Works, Columbia Sportswear, and Torrid. “It was a job leasing all these new retailers, but you have to do what you need to do to reinvent your center today,” Ziff said Charging stations for electric vehicles were added and weekly activities for kids, like story time with costumed characters, have locals stopping by regularly. Ziff says that average sales per square foot rose to $335 from $297 in 2019. “For brick and mortar retail today, especially within the outlet sector, it’s all about survival of the fittest,” said Fred Meno, Woodmont’s CEO of asset services.

District La Brea — Los Angeles In 2008, just before the market crash, Madison Marquette bought 11 buildings that made up the Continental Printing plant on the better part of a city block on La Brea Avenue in the Fairfax neighborhood of L.A. That stretch of La Brea was the launchpad for a bevy of youthful and influential brands like Stussy, Undefeated, and American Rag. Madison Marquette chairman Amer Hammour and head of retail Tom Gilmore had a notion to remake the entire block into an urban-beat setting for breakout retail brands. Each of the 11 buildings, which comprise 110,000 sq. ft. were stripped down. Architects exposed and accentuated the wood truss ceilings, exposed bricks, and steel beams. It was live-work-play Hollywood-style — small offices taken by film industry creatives and retail space inhabited by new-age specialty

Halcyon — Alpharetta, Ga. It’s beginning to look like Alpharetta is turning into the laboratory for newage, experiential retail centers. We honored North American Properties groundbreaking Avalon project as one of the Top 10 Retail Center Experiences in 2019, and now we see this upstart cropping up in growing Forsyth County. Here’s the reason: “Coming out of the recession, it was almost a decade-long situation in which not a lot of retail was built,” said Phil Mays, principal of Halcyon’s developer, RocaPoint Parnters. “So in real growth areas like Alpharetta — a super ZIP Code with high density and household income — the population was underserved.” RocaPoint found an available property that lined up next to the Big Creek Greenway, a popular 10- mile hiking trail that leaves the local road clogged with parked cars on weekends. Mays and company bought the property and got themselves an uncommon experiential feature: a trailhead. RocaPoint worked with the county to extend the trailway by one mile, putting the new trailhead in Halcyon’s parking lot, where nature lovers now complete their hikes by shopping, eating, and drinking at this 1.9 million square foot development with 280,000 sq. ft. of retail that opened last year. Food and beverage rule at Halcyon. Thirteen options and four more to open soon include Butcher & Brew, CMX Cinebistro, CT Cantina Taqueria, Ocean & Acre, Kilwins, Sweet Tuna and Cattle Shed Wine Company. Shops like Apricot Lane, Lizard Thicket, Oar, and Society Boutique are upscale and quirky. “The soft goods aren’t chains. They’re mostly independents or regional with franchisees in the store,” Mays said. “It’s the same with most of the restaurants. I got great advice from a celebrity chef in Atlanta who told me, ‘Find local restaurateurs who are already successful and get them to open in your center.’”

retail and dining options. Madison Marquette’s experiential marketing director Scarlet Garcia helped curate tenants at District La Brea and put an appealing veneer on a bunch of old factory buildings. “The area was graffitied everywhere so we got Shepard Fairey, who created the famous Obama


‘Hope’ poster, to do a mural” Garcia said. Bonobos opened its first physical retail location at La Brea and founder Andy Dunn did the same with his Interior Define brand. Other tenants include Arc’terex, Stone Island, Reigning Champ, and Sycamore Kitchen, operated by renowned L.A. chefs Quinn and Karen Hatfield.


RIO — Gaithersburg, Md. “When we built this center, it was state of the art. Twenty years later, we were still pulling from a good distance, but the world around us had changed. Developers were building for a new type of tenant,” said Paul Weinschenk, president of retail at Peterson Companies, which owns this center and runs it along with Circle Management. So Peterson and Weinschenk decided to invest in a full-scale makeover of this lakefront property in this thriving Baltimore-D.C. suburb. The $30 million effort included a wholesale makeover of the exterior (included an LED skin to alter the color of the building) an expanded boardwalk on the lake with a floating barge for taking lunch or taking in concerts, and remade restaurant spaces with terraces on the lake. It also meant parting ways with tenants that had helped make a success of what once was known as The Washingtonian Center with the RIO entertainment building. The transformation included a rebranding and a revamped marketing program heavy on social media.

“Macaroni Grill and Joe’s Crab Shack weren’t doing anything for the center anymore. “Macaroni Grill was sitting on the lake but not taking advantage of it,” Weinshenk said. Now Yard House, Silver Diner, and True Foods have opened at RIO with lakeview windows and seating. Other new or improved

tenants at RIO include BlueMercury, White House/Black Market. Dave & Busters, It’Sugar, Muse Paintbar, and an AMC Dine-In 18. “We didn’t want to circle the drain,” Weinschenk said. “This means we’re going to continue to get really good rents and broker interest here.”


450 NW 257th Way, Troutdale, OR 97060 | (503) 669-8060 @columbiagorgeoutlets





Fashion District Philadelphia Joe Coradino’s grand vision to revitalize his hometown’s famed Market Street came to fruition last fall and did something that’s rarely accomplished in one fell swoop—instantly change the character and vibe of the heart of a great city. The 900,000-sq.-ft. enclosed mall that Coradino’s PREIT co-developed with Macerich on the former site of The Gallery Mall, filled a long vacant block on a street that was one of America’s first central marketplaces. With the advent of Fashion District, Center City now has its first luxury Cinema, 100-plus new shops that include flagship Nike and H&M stores, experiential retailers like Candytopia and Wonderspaces, and a bevy of new restaurants and bars such as City Winery, Poke World, and Big Gay Ice Cream. Location, location, location couldn’t be better, better, better. Fashion District is connected to the Pennsylvania Convention Center, the SEPTA commuter rail station, and the Marriott Downtown Hotel. It sits at the epicenter of a metro comprised of nearly 6 million people that includes upscale suburbs north of the city and in nearby New Jersey. “We’ve got 22 million commuters a year coming through here and they all have malls where they live. But they don’t have a mall like this one,” boasted Coradino.

fashion district is proud to BE one of csa’s breakout centers for 2020. Fashion District Philadelphia features dynamic offerings including flagship, traditional full price, off-price and branded outlet retail, experiential dining and entertainment, along with public art and evolving cultural events.


Westfield Valley Fair — San Jose, Ca. After unveiling a billion-dollar re-do of its Century City mall in Los Angeles, Unibail Rodamco Westfield shows no sign of slowing down its intention to execute resplendent refreshes of already successful properties. The 21st Century version of Valley Fair opens this month with a 500,000-sq.-ft. anchored by a three-level, Bloomingdales and housing the property’s “Luxury Collection” that includes Balenciaga, Giorgio Armani, Louis Vuitton, Prada, and Saint Laurent. Eataly Silicon Valley is set to open soon, only the second location for the world-renowned food hall on the West Coast. More restaurant openings will continue through the year in the new wing, with and its commodious public areas, plazas, and outdoor spaces will host events, live entertainment, multi-faceted social fashion and technology boutiques, and health and wellness amenities. “The $1.1 billion evolution of Valley Fair offers access to the world’s best and most relevant brands. It has a new and engaging atmosphere that reflects a sense of luxury and leisure familiar to the Silicon Valley customer,” said Colin Shaughnessy, director of U.S. leasing for URW.



Hot Markets

New York

A steady rise in residents and projects has investors looking favorably on retail in the nation’s largest city. By Al Urbanski There is nary a neighborhood in the famed five boroughs that is not growing, as New York City continues to draw new, highearning residents from across the globe. Along the Harlem River in the South Bronx, Brookfield Properties will be erecting Bankside, a seven-building mega-project that will add more than 1,300 apartments and street retail to a once troubled neighborhood. On the Lower East Side, Delancey Street Associates’ Essex Crossing continues to rise, adding a 14-store office building, 83 condos, and the Market Line bazaar. Even Brooklyn’s Gowanus Canal, still in the midst of a Superfund cleanup, is destined for waterfront property status as an 80-block area of low-rise buildings has been re-zoned and is being gobbled up by developers hungry to cash in the demand for housing. Some 85,000 jobs were created in New York in 2019, driving up demand for residential and retail space city-wide. Brooklyn continues its trendiness assault on Manhattan, according to Marcus & Millichap, with a retail vacancy rate at about 3.5% compared to around 5% for the central borough. Yet it was the Shops & Restaurants of Hudson Yards — the instant neighborhood that appeared on the West Side of Manhattan — that accounted for most of the new inventory in Manhattan last year by adding 1 million sq. ft. of GLA.

The vacancy rate in Manhattan rose to 4.3% in 2019 — a 70 basis point increase yearover-year — as the net absorption of 850,000 sq. ft. fell short of new supply. Vacated retail space in downtown Manhattan alone caused vacancy to jump 200 basis points in that neighborhood. Asking rents rose by 50% to an average of $130 per sq. ft. in Midtown Manhattan, while the average rate downtown fell to its lowest level since 2009. Brooklyn was the next most active borough for development, adding 368,000 sq. ft. of retail space in 2019. Projects included a 55,000-sq.-ft. department store and a 40,000-sq.-ft single tenant building. Asking rents rose by more than 8% to $51.70 per sq. ft., offsetting a 9% decline the previous year. Multi-tenant rates appreciated the most in South Brooklyn, where rents rose 10% to an average $36.22. Legislation concerning rent-stabilized multifamily housing is influencing New York real estate investors to look more favorably upon retail assets and buildings with retail components, states Marcus & Millichap. Retail facilities can be less management intensive than apartments and have higher cap rates on average. The new regulations have nevertheless raised concerns regarding the broader policy of rent control in New York City, with some buyers waiting to see how the multifamily sector adjusts.

Manhattan By The Numbers

1,300,000 4.3%

sq. ft. retail GLA to be completed in 2019

vacancy rate


average asking rent per sq. ft.


increase in asking rent over previous year


Median household income


monthly retail purchases per household Source: Marcus & Millichap






workflows, all ERP/CRM modules must be able to fully integrate and communicate with one another. Also, any ERP/CRM application has to support activities across every physical and digital touchpoint, reliably and consistently.

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Making ‘no-channel’ retail a reality It’s time to move on. Forget omnichannel retail The future belongs to what I’m calling “no-channel” retail. Omnichannel has become synonymous with conducting retail consistently across disparate channels. But the retail industry is evolving to a new model — one is “no-channel.” The established omnichannel model of retailing is based upon the assumption that customers do not distinguish among different channels in their front-end experience. A shopper who places a product in their online cart and identifies themselves at that retailer’s brick-and-mortar store expects associates to know what’s in their cart and be able to quickly retrieve it. Prices and promotions need to be consistent, regardless of touchpoint. For retailers, eliminating the appearance of channels on the front end has involved intensive systems integration and silo removal on the back end. Channel segmentation exists, but is made invisible to the customer. With no-channel retail, now retailers are experiencing the elimination of channels on the back end, as well. Properly executed, no-channel retail truly enables retailers to deliver any product to any customer, anytime, anyplace. Fulfillment costs go down, inventory turns improve, customer satisfaction rises and price integrity is maintained. Here are three critical technologies retailers need to support a no-channel enterprise.

Real-time product tracking/ tracing/locating No-channel is “pull” retail of the purest form — a shopper is able to select any product that you carry, purchase it, and receive it at a time and place of their choosing. This means customers expect the ability to follow a path to purchase that might look like browsing an item on their mobile phone, reserving it on their laptop, paying for it at a store near their office and picking it up two hours later at a store near their home. And this is just one example of a nearly endless array of channel-obliterating purchase and fulfillment options customers may choose. The ability to accurately track, trace and locate products across the enterprise in real time is crucial to delivering this type of customer experience. Technologies including RFID, blockchain, computer vision and artificial intelligence can all provide a foundation for the true inventory awareness needed to succeed no-channel retail. There is no single “right” technology, but retailers must find the track and trace solution right for their own enterprise.

Customer recognition Giving customers unprecedented access to and control of your inventory and supply chain does little good if you don’t know who they are. Retailers need to recognize customers as soon as they initiate engagement via the touchpoint of their choice. Shoppers should be able to create a single account once and then use it across all physical, online, mobile, social and personal assistant storefronts. After signing into their account for a digital touchpoint, customers should remain logged in unless they choose to log out. In the brick-and-mortar store, account-holdERP/CRM ing customers should able to announce their To successfully offer customers an identical assort- presence at the tap of a button on their mobile ment with identical pricing and promotion across device or by waving a card in front of a scanner. brick-and-mortar, online, mobile, social and any Retailers could even use computer vision or other conceivable touchpoint, retailers must take sensor technologies to fully automate in-store the concept of “one version of the truth” to new recognition, although customers need to be heights. This means implementing robust systems aware and able to opt out. to perform activities such as merchandising, product image management, price and promotions management and personalization. While retailers do not have to use solutions from Dan Berthiaume dberthiaume@chainstoreage.com a single vendor to manage all their ERP/CRM




Digital Training Goes With the Flow By Dan Berthiaume Modern, connected retail employees respond well to training techniques that leverage mobile devices, artificial intelligence and digital content. Axonify offers a learning platform designed to train frontline retail employees in short time increments, using individually targeted content provided via mobile app. Chain Store Age recently spoke with Carol Leaman, CEO of Axonify, about how retailers can take advantage of emerging technology to maximize the effectiveness of their training programs. What are the advantages of delivering digital training in the flow of work? As a result of the pace of work today, retail associates have lots to do every time they come to work. It isn’t the case where it’s easy to assign people a specific time to sit down and train face-to-face on a schedule. It’s more beneficial to allow people to train three to five minutes at a time when they have that spare time in their shift. How can artificial intelligence help make training content more relevant? Behind the scenes, you can run algorithms on each individual’s specific information and know what they understand and don’t understand. If one employee understands a certain topic, you can move them on to a new one. Artificial intelligence and machine learning allow specific and surgical training on a person-by-person basis, delivered to each individual determined by what they know or don’t know. This way, information is fresh and relevant. Employees will understand it better than information delivered on a ‘one size fits all’ basis by being repetitive. You can train according to individual knowledge gaps instead of by how far along the employee is in a standard training program. How can machine learning help companies tie their digital training

efforts to measurable ROI and KPIs? Once you start to know at a detailed level what people know and don’t know, you can start to focus on business outcomes, such as sales and customer service scores, relevant to the top and bottom line. You can marry up granular data on business outcomes with analytical machine learning models and start to correlate things that relate to one another. For example, you can predict how knowledge of a specific product or promotion impacts the business outcome and tweak and change the specifics of what you train on. If you train on 100 things, and 30 of them are not relevant to business results, you can stop training on topics that don’t matter and focus on training that actually drives business value. It’s microlearning at a granular level. What impact does mobile training have on employee morale and retention? Mobile training is essential now. When Axonify started nine years ago, we made sure we developed training solutions with mobile capabilities out of the gate. At the time, there was a lot of pushback against allowing associates to use their mobile devices on the store floor. Retailers were worried how it would look if a customer walked up to an employee and they were on their phone.

The reality is, every person coming in the store is now on their phone. It is essential to allow employees mobile access and the ability to pull their device out of their pocket and spend three to five minutes on training when their schedule permits. This type of flexible, ‘anytime, anywhere’ training is very appealing to younger employees, but really appeals to any generation. You can make it as easy as possible to train on a device employees are already used to using. How do Axonify’s solutions help retailers maximize the effectiveness of their training programs? Our customers include Walmart, Levi’s, Bloomingdales, Foot Locker, and many other large global retail brands. Each of them is investing in their frontline associates to improve sales and customer service experiences. Bloomingdales has achieved more than $10 million in savings by reducing the safety claims while also improving loss prevention and asset management. Using gamification, Axonify retail customers average 85% voluntary participation in the platform three or more times a week. For the average training solution, people will use it once a few times during the length of their employment. We get more than 50 million learning sessions per year across our customer base. It’s unheard of.




Watch Out for Magecart Attacks

Fast-growing e-commerce threat poses danger to retailers By Dan Berthiaume A rapidly growing cybercrime technique threatens the stability and security of online retail. Magecart may sound like something out of “Harry Potter,” but it is a very real online fraud tool that should scare retailers far more than anything from the world of wizards. Randy Pargman, senior director of threat hunting and counterintelligence at Ohiobased cybersecurity company Binary Defense, spoke with Chain Store Age about this emerging e-commerce threat, which is a type of malware that runs a malicious script on an e-commerce site without being detected. Pargman, who also spent 15 years as a computer scientist with the FBI, described how Magecart works. “(Hackers) gain access to an e-commerce site and install JavaScript to collect card data and send it to the attacker every time a customer makes a purchase,” said Pargman. “Retailers may use services to check their sites for new script, but the attackers can analyze the checks, and if one is different enough from normal site visits the attacker can analyze where it’s from and return the regular to site if they recognize the IP address. This allows Magecart attack-

ers to only run the malicious script when a customer makes a purchase.” According to Pargman, security experts have been seeing a substantial increase in the number of attacks on e-commerce sites that provide services for online retailers. “For example, take a company that provides a turnkey solution retailers can use for shipping,” stated Pargman. “A hacker who gains access can install malware on multiple different retailers at once and collect card data as it is entered into site.” Pargman and many other cybersecurity experts started warning that Magecart attacks were rapidly growing during the runup to the 2019 holiday season. A late 2019 Magecart-related data breach at Macy’s bore this out. The malware enabled unauthorized access to personal and financial data shoppers entered on the checkout page and wallet page on the Macy’s e-commerce site. This included payment card information for completed orders as well as customer first and last names, street addresses and email addresses. Macy’s has remediated the breach and taken steps to prevent future intrusions. “Online retailers like Macy’s are prime targets for Magecart, because data is easily stolen during checkout, often through third parties, as customers enter their credit cards,” commented Elad Shapira, head of research at security management platform Panorays. So how do retailers stop this seemingly supernatural threat? Fortunately, there are a few real-world solutions that can help banish Magecart attacks back into the gloomy underworld of online retail fraud. Here are three suggestions.



As recommended by web security provider PerimeterX, retailers must make sure they are tracking any first- and third-party code being added to their website in real time. Any code from a domain that has suspicious characteristics, such as being recently launched or originating from known hacker trouble spots like Russia or Eastern Europe, should be flagged for immediate review.


Retailers must consult with any and all third parties, such as online marketplaces, payment processors, or even maintenance service providers that may provide entry points to their network. Make sure any entity that has any legitimate reason to have access to any part of your enterprise is aware of Magecart and actively taking preventative steps.


As recommended by Justin Fox, director of devops engineering for NuData Security, a Mastercard company, retailers need to start verifying the legitimacy of their buyers by using information beyond credit card numbers or other personally identifying data. “This is where behavioral technologies are providing companies with higher assurance establishing the legitimacy of their customers, even when their stolen credentials are used,” advises Fox. Finally, retailers must always remain vigilant and active in their online security activities. Stay current with the latest trends and solutions, and always be willing to upgrade or update your existing security infrastructure. Magecart may wind up becoming old news by the time 2020 ends, but cyberattacks will always remain in fashion. MARCH/APRIL 2020 CHAINSTOREAGE.COM



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