CSA-July/Aug 2020 by ensembleiq

July/August 2020

Top 10 Retail Center Comebacks Walmartâ&#x20AC;&#x2122;s Self-Checkout Pilot Winter Facilities Prep

THE NEW PLAYBOOK FOR RETAIL STORES

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from the editorâ&#x20AC;&#x2122;s desk

On the Level: A real estate column

Contents

tech viewpoint: a retail tech column

VOL. 96 JULY/AUGUST NO. 4

COVER The New STORY Playbook for Physical Stores The brick-and-mortar shopping experience is evolving due to COVID-19, which ia accelerating many of the trends that were already in motion pre-pandemic.

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Walmart tests selfcheckout only store

Issues to consider when an employees refuses to return to work

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. POSTMASTER: 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. 4, July/August 2020. Copyright ÂŠ2020 by EnsembleIQ. All rights reserved.

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Contents VOL. 96 JULY/AUGUST NO. 4

REAL ESTATE

Top 10 Retail Center COMEBACK Experiences Led by RIO and Easton Town Center, these exemplary centers used sound judgment, bright colors, and vivifying events to welcome back guests.

STORE SPACES

Big data, artificial intelligence and machine learning among the top trends in construction technology.

Prepping facilities for the winter months

With limits on store capacity, retailers should extend the customer experience to their outside queues. 4

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TECH

ShopTalk: Raley’s opens new store concept; Walgreens piloting smaller format.

Vendor Q&A: Dentco’s Teresa Phelps discuses the elements of a successful snow- and ice-management strategy.

Tips for facilities budget forecasting in the new normal.

Vendor Q&A: Retailers can turn heightened consumer interest in text-based communication to their advantage, according to Podium’s Eric Rea

Bob’s Discount Furniture puts premium on safety as customers return.

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FROM THE EDITOR’S DESK

New Expectations The COVID-19 pandemic has upended retail, with the industry evolving in ways that are still being digested. But as our cover story, “The New Playbook for Retail,” makes clear, the pandemic is not re-writing the rules of retail as much as it is accelerating or fasttracking some key fundamental trends that were already starting to transform the industry. Chief among these is the need for robust and flexible digital operations. While certainly not new, the crisis has made such capabilities absolutely crucial to business success, at least for most retailers. But another big change is unique to the pandemic and it’s how the crisis has upended the in-store customer experience. Forget about fun, in-store demos and interactivity — at least for the time being. Customers are now prioritizing things that no one imagined prepandemic, such as putting limits on how many shoppers could be in a store at any one time, for example, or requiring customers and employees to wear facial coverings. Overnight it seems customers have come to expect plexiglass shields and distancing signs. “The ability to deliver on health and safety efforts is now the most important aspect of the customer experience, and it will be for some time,” said Nick Mercurio, executive VP and service line head of U.S. channel performance at global research firm Ipsos. Indeed, numerous surveys indicate that retailers will pay a price for not paying attention to in-store health and safety measures related to COVID-19. In an Ipsos survey, 62% of shoppers said they would stop shopping at a retailer that is not taking health and safety seriously. As to what specific measures consum-

CHAIN STORE AGE

ers want to see, it’s not that complicated. Improved cleaning practices and the enforcement of physical distancing heads the list, according to a report by L.E.K. Consulting. “Based on how Americans are feeling, the onus is really on businesses to make people comfortable to return to their establishments in the post-COVID-19 reality,” said Manny Picciola, managing director at the firm. Some retailers are going the distance, and even beyond in some cases (see our story on Bob’s Discount Furniture, pg. 34). But others are falling short. In the Ipsos study, 58% of the stores visited were not observed to be managing the number of entering customers and 64% had no staff actively cleaning interior high-traffic areas, such as carts/ baskets, counters, credit card readers, and doors. Also, 31% of the stores visited did not have plexiglass dividers at checkout. Joe Nevin, senior VP, development at Big Red Rooster (a JLL company), believes that some of today’s changes will be temporary, but that the need for catering to customers’ sense of safety and comfort will likely remain. “Retailers must demonstrate and share their core values to empower both their shoppers and employees while appropriately addressing all touchpoints in the customer journey to ensure long-term future success,” he said. The plight of shopping malls has been much in the news of late. But the news is certainly not all gloom and doom. Savvy operators are reopening their doors with new initiatives designed to encourage shoppers to return while also making them feel safe. Ten of those centers are profiled in “Top 10 Retail Center COMEBACK Experiences,” which starts on page 18 of this issue. As these centers illustrate, a little imagination and ingenuity can go a long way.

Marianne Wilson mwilson@chainstoreage.com

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CHANNELS chainstoreage.com > COMMERCE > CUSTOMERS

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

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

Online Editor Jennifer Mosscrop

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Event Director Melissa Murphy

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Event Coordinator Rita Ruzalski

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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

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COVER STORY

THE NEW PLAYBOOK FOR RETAIL STORES

The entire brick-and-mortar shopping experience is evolving due to the pandemic

By Dan Berthiaume

rick-and-mortar shopping has changed a lot during the COVID-19 pandemic. As retailers look to the future, they should expect many of those changes will likely be permanent. Since its eruption as a major U.S. health crisis in March, COVID-19 has accelerated a number of existing in-store shopping trends, and in some cases, created new ones. Although the pandemic is progressing on an uncertain path with unpredictable results, most retail experts agree the brick-and-mortar trends we are seeing now will continue beyond COVID-19. “Consumers will demand that retailers focus on customer health as a guiding 8

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principle, and that they feel both safe and comfortable shopping or they will take their dollars elsewhere,” said John Rohland, VP of Cambridge Retail Advisors. “We see the entire brick-and-mortar shopping experience evolving as a result of the pandemic.” According to Rohland, as part of their heightened health concerns in the wake of the coronavirus, consumers will demand brick-and-mortar stores not just maintain the extra sanitation standards and procedures now in place, but make them highly visible. He also foresees shifts in how retailers handle dressing rooms and in-store returns. “The quantity and type of products that the customer will be allowed to try on will be limited and will need to be sanitized

62% of shoppers would stop shopping at a retailer that is not taking health and safety seriously.

afterwards,” explained Rohland. “In addition, we — Ipsos Consumer Health see retailer & Safety Index, June 2020 return policies changing to not allow high-risk items to be returned, and a process to sanitize those items that will be returned.” On the technology side, trends include increasing retailer adoption of buy-onlinepickup-in-store (BOPIS) and curbside pickup, contactless payment, mobile checkout, and wayfinding solutions. All of these emerging technologies align with the ultimate goal of making customers feel secure while visiting a brick-and-mortar store. JULY/AUGUST 2020 CHAINSTOREAGE.COM

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Eliminate the ‘last mile’ with capabilities. The OMS delivers inventory founder, Shelmark Consulting Inc., retailers BOPIS and curbside visibility and enables reallocation, which should consider combining contactless payCurbside pickup and BOPIS are becoming allows Kendra Scott to shift order volume ment capabilities into the same customer increasingly popular among warehouse when turning on curbside, BOPIS, or the apps that provide in-store wayfinding serclub, grocery, and CPG retailers as cusnew ship-from-store option it also launched vices (see sidebar, “Signs of the Times”). tomers seek contactless shopping options in response to COVID-19. “Incorporate contactless payment into during the COVID-19 pandemic. Sam’s “We started piloting orders within days your app with wayfinding to solve multiple Club, Costco (for prescription and successfully went live at problems for shoppers every day,” said medications), Aldi, Hy-Vee, eight stores,” said Dunlap. Kohan. “Hundreds of tech companies are 70% of Cumberland Farms, and “Since then, we have quickly always asking to implement solutions in consumers Winkler Wholesale Grocers your environment; take advantage of the will use BOPIS expanded fulfillment to other have all recently introduced or stores and introduced curbside ones that add value.” options if expanded curbside programs. pickup in all 23 Kendra Scott Cambridge Retail Advisors’ Rohland available. Discount giant Target and Texas stores and beyond as new opined that as a result of COVID-19, brick— Shopkick, May 2020 specialty arts-and-crafts retailer local and state ordinances shift.” and-mortar retailers will accelerate their The Michaels Cos. are two According to Dunlap, previously slow-moving progress toward major retailers who have expanded their Kendra Scott has been very pleased with offering contactless payment. BOPIS offerings in the face of COVID-19. the response from customers to curbside “The capabilities of near-field communiCloud commerce company Kibo has said pickup and along with rolling that out to cations (NFC) have been available for years, that its 260 retail clients received a 563% other locations, the retailer has also been and all major PIN pad manufactures supincrease in BOPIS orders at the peak of the launching BOPIS at select locations since port this technology,” he said. “With NFC, COVID-19 pandemic, and it expects elmid-May. The retailer expects to continue the customer can store their various credit, evated BOPIS demand to continue beyond offering curbside and BOPIS debit, and loyalty cards the current crisis. services post-pandemic. within their cell phone’s 45% of retailers In addition to providing customers who virtual wallet. For loyalty cannot or prefer not to enter a brick-and3,2,1 – Payment, no contact say BOPIS orders or payment processing mortar store another option to shop store More retailers have started offer- drive 11% to 40% of during checkout, the their revenue, and inventory, BOPIS and curbside also elimiing in-store contactless payment phone is positioned 22% say BOPIS is nate the costly “last mile” of transporting since the pandemic began. By within six to 12 inches of responsible for 40% the PIN pad. Customer online orders from local distribution hubs doing so, retailers can help to 65% of revenue. to a customer’s doorstep. customers socially distance and adoption of this technolFast-growing specialty retailer Kendra generally feel at ease while visitogy has been slow, but —Retail Systems Research, Scott decided to quickly set up a curbside ing a brick-and-mortar store. the increased consumer May 2020 pickup program once its stores had to be Contactless payment also helps demand for touchless closed during the COVID-19 pandemic. eliminate the time customers transacting could clear Kendra Scott also needed to roll out its spend in queues, a valuable benefit as many the path for other emergent contactless paycurbside program in time for Mother’s Day, states and localities are placing strict limits ment options.” an important peak period for the retailer. on store hours and how many people can be In the next 12 to 24 months, Cambridge “Our brick-and-mortar locations are an in a store at one time. Retail Advisors believes retailers will tranincredibly pivotal part of our business, One of the retailers that launched contactsition to bring your own device (BYOD) monot just from a transaction side but from less payment-related services in the wake of bile payment. Contactless BYOD technology the engagement side,” said Jim Dunlap, COVID-19 is David’s Bridal. The nation’s enables customers to use any device to scan a CIO of Kendra Scott. “Following the largest bridal retailer is partnering with moQR code displayed on the retailer’s POS terripple effects of COVID-19, Kendra Scott bile wallet marketing automation platform minal or printed on a receipt. The customer transitioned to more digital interactions Popwallet to deliver connected and tailored is then taken to a secure website to pay for with customers. This led us to the curbside promotions such as dynamic coupons, oftheir transaction, without need for an app. pickup and the buy-online, pickup-infers and rebates to its customers via mobile “BYOD payment technology allows for store (BOPIS) offering.” wallets like Apple Wallet and Google Pay. In quick, secure and hardware-agnostic touchIn August 2019, Kendra Scott launched addition, beauty giant Sephora is encouragless transacting anywhere — at checkout, Manhattan Associates’ order manageing contactless payment as stores re-open. restaurant table, bar, curbside pickup and ment system (OMS) for its omnichannel According to Shelley E. Kohan, CEO/ more,” stated Rohland. CHAINSTOREAGE.COM JULY/AUGUST 2020

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COVER STORY

Rohland also touched on Customers have several opAlmost 30% of the emergence of “grab and tions for payment. A Verifone U.S. consumers go” automated payment, such payment device attached to said contactless as that offered at Amazon the back of the associate’s payments are Go convenience and grocery iPhone can read or swipe their preferred stores. credit, debit, and gift cards. method of “The ultimate in convenience While the store does not payment postis the elimination of scanning directly accept cash payments, COVID-19. and cashiers,” he said. “Scancustomers can insert cash into — Strategy Analytics less, cashierless technology a GiftWise Cash-2-Card selfWireless Media Strategies, enables consumers to shop service kiosk that will autoJuly 2020 stores and quick-service resmatically print a gift card in taurants with no lines, cashiers, any denomination. Customers or checkout. 5G wireless networks will be can also schedule home delivery and clickthe enabler for higher performance and and-collect pickups. Receipts can be printed improved efficiency, and will fundamentally change the retail and restaurant industries and unleash a new wave of opportunities previously out of reach.” Bring checkout to the customer In addition to contactless payment, another method brick-and-mortar retailers are increasingly using to eliminate in-store queues and wait times is mobile checkout. This POS strategy involves store associates using mobile devices to check shoppers out, whenever and wherever in the store they are ready. Even before the onslaught of COVID-19, France-based global sporting goods retailer Decathlon had been testing various mobile checkout options at different locations around the world. In the Decathlon “experiential retail center” in the San Francisco suburb of Emeryville, the retailer runs store operations, including checkout, via iPhones. However, store associates perform mobile checkout at customer request using a mobile checkout station and an iPhone connected to the NewStore mobile store operations platform. Rather than wait in line at a fixed POS terminal, customers can approach any store associate when they are ready to make a purchase. The associate can place a customer’s item or entire shopping cart inside a mobile checkout station, which is equipped with an internal RFID scanner that automatically reads all the items. The associate then uses their iPhone to scan a unique QR code on a static sticker placed top of the mobile checkout station, which receives all the price data on the items inside. This opens a scrollable shopping cart in the employee app, which can also be used to scan individual products. 10

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in-store or sent to customers digitally. “The NewStore platform connects shoppers to our brand and exclusive products,” said Tony Leon, CIO & CTO, Decathlon USA. “With real omnichannel in the hands of mobile-powered store associates, we can deliver a customer experience that truly drives our mission of making sports accessible to everyone. NewStore allows Decathlon to put more associates on the store floor where they belong. They are armed with iPhones and ready to help customers, as opposed to being stuck behind a cash-wrap waiting to process transactions with a clunky old POS.”

SIGNS OF THE TIMES: SHOWING CUSTOMERS THE WAY With situations fluid due to the COVID-19 pandemic, customers need more information in-store than ever before. Wayfinding technologies such as automated electronic signage and beacons can notify shoppers of one-way aisles, social distance regulations, product locations, availability of selfcheckout/mobile checkout terminals, online pickup areas, product information, and other flexible in-store circumstances. “During the pandemic, we have seen many retailers leverage their e-commerce site’s capabilities to increase the product pictures and description,” said Cambridge Retail Advisors’ John Rohland. “Since this is a relatively new technology, the expansion of the information could be done very economically. We expect retailers to leverage this information for in-store use, whether it be including QR codes on signage or leveraging beacons for their loyalty customers.” Shelmark Consulting Inc.’s Shelley E. Kohan expanded on the benefits that digital signage and other wayfinding solutions can provide brick-and-mortar retailers and their customers. “Depending on Centers for Disease Control (CDC) and governmental regulations, there may be some social distancing in stores,” said Kohan. “Retailers needing to abide by occupancy limits can track customers coming into stores. Obviously, wayfinding can also help with safety. There is a lot of technology out there to help retailers determine shopping paths and behaviors. They can use analytics and metrics from wayfinding to determine where the highly populated areas are and then reconfigure the store to spread shoppers out.” Post-pandemic, Kohan said wayfinding technology will still provide retailers with a lot of value. “With digital signage, retailers can quickly change signs and use virtual mapping to walk customers directly to the products they want,” said Kohan. “You need beacons and geofencing, coupled with a store map. Walmart has done a good job of geofencing all their 4,000-plus stores in the U.S.” To further enhance the value of wayfinding apps, Kohan recommended including augmented reality (AR) and artificial intelligence (AI) capabilities that would allow a shopper to scan an item’s barcode and automatically obtain additional information such as product details and customer reviews.

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NEW CONCEPTS

Walmart Goes All In for Self-Checkout Retail giant tests self-checkout only store By Dan Berthiaume Walmart is testing a store design that takes the self-checkout experience to a new level. The discount giant has opened a pilot supercenter format in Fayetteville, Ark., that replaces traditional, in-person checkout lanes with self-checkout kiosks. Instead of arranging POS terminals in separate lanes, the store has a front-end layout in which 34 registers line the edges of a wide-open area. Green Light: Each register is equipped with a green light that alerts employees and customers to available checkout bays. All the registers are open. When customers walk into the register area, an employee behind a clear barrier greets them. All the cashiers in the store have been transitioned to a new role called “host.” If customers want to check themselves out without assistance, a host will show them to an open register. If a customer wants to be checked out by an associate, a host rings them up and bags all of their items just like they would have in the old lane-driven layout.

According to Walmart, the new selfcheckout format speeds up the checkout process because a lack of visibility into traditional checkout lanes creates a “never-ending grass-is-always-greener” scenario where the customer spends time calculating which line will take the least amount of time. In addition, if the store suddenly gets busier, getting another cashier isn’t always easy. In the new layout, all 34 registers are always open, making it easier to adapt to changing traffic patterns and maintain a safe social distance within the open area, because there is more room to maneuver. Other benefits include reducing the 40 hours spent training a traditional cashier to less than eight hours training a selfcheckout host. Carl Morris, manager of the Fayetteville pilot store, said the new self-checkout experience is more welcoming to customers. “When we had the old register layout, you have the sense that there is only a limited amount of space to check out,”

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Morris stated in a corporate blog post. “Now when they walk in, it is wide open. Any choice they want and any amount of help they need, we can offer them. In this new layout, you get greeted from the entranceway and helped all the way through the whole process.” John Crecelius, senior VP of Walmart U.S. innovations development, agreed that eliminating traditional lanes improves customer engagement. “By nature, individual lanes make the checkout experience transactional, but being face-to-face, the interaction becomes a relationship,” said Crecelius. “We want to make it a personal experience.” JULY/AUGUST 2020 CHAINSTOREAGE.COM

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EXPERT ANALYSIS

Refusal to Return to Work Issues to consider when an employee refuses to return

As businesses reopen following the COVID-19 shutdown, some retailers are finding that certain employees are refusing or resisting the calls to return to work. Some employees are fearful to return due to health and safety concerns, some have childcare issues, and some may prefer receiving unemployment compensation in favor of their former regular wage rates. A refusal to return to work is typically considered a resignation and, unless an exception applies, the employee will no longer be eligible for unemployment benefits (assuming that employee was currently receiving them). In the typical case, employers would simply follow their procedures for handling resignations, which may include, for example, paying out accrued but unused paid-time off (PTO) and sending out a notice under the Consolidated Omnibus Budget Reconciliation Act (COBRA). However, depending upon the employee’s reason for refusing to return to work, considering the refusal to be a resignation may have serious legal consequences. Here are some reasons employees may refuse to return to work that should trigger additional analysis and dialogue between the employer and employee. • The employee lives in an area that remains subject to a quarantine or stay-athome order. In these situations, employers may want to consider if the employee is capable of returning to the workplace, which may depend on factors outside the employee’s control such as public transportation. • The employee objects to the safety procedures and requirements on personal protective equipment. For example, if the employee has a latex allergy and the company requires use of latex gloves as part of its safety protocols, the employee might request an accommodation under the Americans with Disabilities Act. • An employee also might have a religious objection or request an accommodation under Title VII of the Civil Rights Act of 1964

if required to wear a mask. In addition, employees may have privacy objections to certain kinds of mandatory tests and screenings. • Employees may have other issues that implicate the ADA. For example, an employee may be considered high risk or may live with someone who is high risk. • Employees may Even with enhanced safety measures in place, some employees may feel have childcare issues, uncomfortable returning to work. which, depending upon the size of the employer, may trigger safety concerns — not just with respect to obligations under the Families First CoroCOVID-19 — is unlawful under multiple navirus Response Act. federal and state laws. There are many other potential issues that unionized retailers will Other Considerations want to consider in regard to returning emSection 7 of the National Labor Relations Act, ployees to work. which protects the rights of employees to concertedly engage in protests, including work Key Takeaways stoppages, over what employees believe to So, what is a retailer to do? Tread carefully. be unsafe or unhealthy working conditions, Before considering a refusal to return to applies to nonunionized retailers. work to be a resignation or discharging an In addition, unionized retailers, which employee on the spot, employees may want likely have the protection of a no-strike to evaluate each refusal to work on a caseagreement in their collective bargaining by-case, individualized basis to ensure the company does not run afoul of any federal, agreements, will also want to consider Secstate, or local restrictions or obligations. tion 502 of the NLRA, which provides that Other tips for reducing or minimizing issues it is not a strike for unionized employees include working to eliminate fear, educating to refuse to work if they have a “good faith employees (for example by instituting training belief” supported by “ascertainable” and or posting signage), adopting policies and “objective evidence” that there is an “abprotocols for cleaning and disinfecting work normally dangerous” working condition. areas, and implementing physical distancing, Also, while a generalized fear of contracting COVID-19 is not usually enough to support temperature and symptom screening, shift rotation and reduced travel policies at work. a refusal to return to work, OSHA protects workers’ right to refuse an assignment involving “imminent danger” if certain — Kelly Hughes is a shareholder in Ogletree Deakins’ conditions are met. And keep in mind that Charlotte, N.C., office and the co-chair of the firm’s retail retaliating against individuals who raise industry group.

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PHOTOGRAPHY BY KRISTI BLOKHIN / SHUTTERSTOCK.COM

By Kelly Hughes

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1-800-THE-DOCK (800-843-3625) advancelifts.com 15

7/15/20 8:55 AM

ON THE LEVEL

Amazon Catches a Case of COVID

THE BEST IN RETAIL FROM EVERY ANGLE

In the AARP magazine, which we get at our house, they try to sell us smartphones that put connections for all the stuff we can’t find on a Samsung or an iPhone right on the home screen. We can verbally dictate our text messages. There is a button to hit that will immediately send us an ambulance, but no button to order us groceries. Yet there might be one soon on that Jitterbug 2 device for digitally dim seniors like me. In 2019, a Bain & Co. and Google study found that just 6% of Americans had used an online grocery service. A year later, when COVID-19 hit, an Escalent survey of 1,500 Americans found that face-mask requirements, long lines outside stores, and fear got 24% of us buying kale, coffee, and canned corn on our phones and PCs. An astounding 21% of digitally shy baby boomers started doing it, just a few paces behind our millennial kids, 24% of whom took part. Another funny thing happened. Amazon, which alone harvests more revenue from the internet than all other e-coms combined, wasn’t the chief beneficiary of this phenomenon. Walmart was. Its physical breadth from sea to shining sea overshadowed Jeff Bezos’s buddy-buddy relations with the nation. Nine out of 10 Americans live within 10 miles of a Walmart outpost. As a result, more than half of the people who made their first digital grocery purchases during the pandemic made them at Walmart. “Amazon has a huge infrastructure. It’s hard not to do business with them. But grocery is different. Stuff melts, rots. It’s got to come from within a few miles.” said Paul Hartley, Escalent’s managing director

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of consumer and retail research. “I don’t think Amazon has been able to cope with that. Walmart’s massive footprint gave it a huge advantage.” Escalated adoption of third-party delivery services such as Instacart and Shipt also aided the local grocer’s campaign against Amazon. Instacart declared its first profit during the pandemic thanks to a 450% rise in purchases between December and April. Granted, the huge spike in orders wrought challenges for these services. Late deliveries and strikes plagued both. But their flu-influenced, for-profit sampling program tattooed their apps onto millions of smartphone screens. Consumers polled by Escalent awarded Instacart a net positive score that was close to Amazon’s. They will adapt and grow. It’s rare to see Amazon finish third in any scorebox of retail activity, but that’s what happened in this online flu food fight. Escalent arrived at its net positive scores by subtracting the percentage of survey respondents indicating dissatisfaction with a brand from the percentage responding “satisfied.” Eighty percent of participants were happy with Walmart; only 3% were not. Walmart’s No. 1 net-pos score, then, was 77%. Local supermarkets as a whole came in second with a score of 67%. Lagging far behind, in third place, was Amazon with a net-pos of 49%. Surely, online grocery shopping’s hypertrophic rise will diminish once a vaccine becomes available. But the social flux brought about by the pandemic taught millions of us simple smartphone users how easy and how cool it can be to just have food delivered to your door. “We saw a 4x shift, and we think it will flatten out to 2x what it did before,” Hartley said. “COVID-19 created an artificial hype cycle, but we don’t think grocery shopping online is ever going to go down to what it was. It’s not intimidating as it once was. Brick and mortar retailers have been shown a huge opportunity.”

Al Urbanski aurbanski@chainstoreage.com @AlUrbanski (Twitter) JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:33 AM

THE BEST IN RETAIL FROM EVERY ANGLE

lifestyle grocer mixed-use development

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7/15/20 9:19 AM

REAL ESTATE

The Top 10 COMEBACK Retail Center Experiences Normally, this spot in our July-August issue presents the year’s Top 10 Retail Center Experiences, an all-star lineup of retail centers that over-achieve in adding merriment to the merchandise. But guest experiences have been few in this virus-plagued year, so Chain Store Age decided to shine a light on centers and retail real estate companies that are leading the way in creating safe, yet still-inviting experiences to draw crowds back to their properties. In this challenging time, our COMEBACK centers are re-engaging their visitors with society, not just retail. By Al Urbanski

RIO – GAITHERSBURG, MD. Look at a leasing brochure for a modern-day town center and there you will find two words that have been underlined by the COVID-19 crisis: “gathering places.” When the Peterson Companies and Circle Management spent $30 million to remake this 20-year-old lakefront center with a focus on food, entertainment, and gathering space, it readied RIO for a new retail era—and an historic pandemic, as well. Socially distanced circles were painted on the grass using sports field paint. A driving range was set up for guests to hit eco-friendly balls into the lake. A hopscotch game leading to a bridge delighted both kids and adults. 18

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“Some of the things we’ve done because of COVID, we never thought we’d do. But this crazy thing happened and we did it, and now we want to continue with a lot of it,” said Paul Weinschenk, president of Peterson’s retail division. One of those things was pick-up windows at some of RIO’s fine-dining establishments, something never imagined for $30 entrees. “There will be new retail concepts born out of this,” Weinschenk said. Like every center owner, RIO focused on complying with government regulations, but it also conducted a 1,000-person survey to learn what consumers in their market area wanted.

“All wanted an environment they knew would be safe, but a lot were willing to jump right back in. Some said they needed more time, and a small minority said they’d never come back to physical retail,” Weinschenk said. And as for gathering spaces? “Can’t have too much of it,” he said. JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:36 AM

Easton Town Center – Columbus

That old proverb about getting lemons and turning them into lemonade? Easton performed a nifty COVID version of it. When it was clear that the Bon Vie restaurant in the Unity Pavilion was not going to open until after the crisis wound down, Easton hired artists to paint it yellow and festoon it with images of flowers and messages of diversity. “Shutting down Easton was really hard. It’s been here 20 years and never been shut down. Seeing it like a ghost town was heartbreaking,” said Easton chief executive Jennifer Peterson. What turned out to be energetic fun for Peterson was working with her staff to create socially distanced events that got Easton’s many fans flocking back. An Easter Bunny visit drew a line of 600 cars and its annual Movies by Moonlight series lived on. “The drive-in concept was 11 days from concept to market. That was really fun,” said

2 Peterson. “We partnered with some nonprofits and we had confidence it would be wellaccepted. Almost all of them sold out.” Easton Man, a bulky blue bulwark with a face mask, appeared on signage and in person all over the property, advising folks to “Be a hero. Wear a mask.” When we spoke to Peterson in early July, she was preparing for the drive-in finale, a live broadcast of the interstate MLS rivalry between the Columbus Crew and FC Cincinnati. Fitting COVID-19 content, indeed. It’s known as the #Hellisreal Derby.

Westfield Galleria at Roseville – Sacramento

The Galleria at Roseville’s entry for the COMEBACK list started by saying, ”The safety of our guests is our primary concern.” But what impressed the judges more is the Westfield mall’s concern for people’s time and patience. Guests could list stores they intended to visit and get a “queue” of wait times for getting into the socially distanced stores. Might not be a bad idea to reprise that during the holidays with wait times at the registers. Westfield’s COVID signage displayed a more serious tone than other Top 10 honorees, employing with black-and-white templates (plus the red Westfield logo) that are easily recognized and quick to read. Safety themed kiosks were also somber-toned, but filled with more information, providing information on how and when to wear masks. Another digital innovation introduced to aid the shopper’s pandemic-plagued experience was Line Pass, a digital queue system that lets customers get on a wait list or book an appointment at a store from their home, car, or even in the center.

1 Halcyon – Forsyth, Ga. Where malls of the ‘80s sought Macy’s and Dillard’s as anchors for their tenants, RocaPoint Partners and The Georgetown Company went in an entirely different direction at this mixed-use center that opened in 2019. They anchored it to the Big Creek Greenway, a 14-mile hiking trail, and Halcyon became its new trailhead. Fit hikers and bikers started finishing off their treks in the center’s outdoor dining plazas, exercise areas, and dog-friendly paths. Management endeavored to invite them to keep stopping by throughout the pandemic. “We got in touch with Forsyth County. We figured we could be a drop-off spaces for all types of goods. Some blood drives were needed CHAINSTOREAGE.COM JULY/AUGUST 2020

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4 and we could do that. But even before we could fully re-open, people could walk and bike into our greens and stay distanced,” said RocaPoint principal Phil Mays. Halcyon’s many restaurants were able to thrive because of the plentiful outdoor dining space. “Because Halcyon is so oriented to the outside, some of our restaurants posted record numbers during the crisis,” Mays said. 19

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REAL ESTATE

The Avenue East Cobb – Marietta, Ga. Poag Shopping Centers CEO Josh Poag said his company’s dealings with what he calls “The Great Accelerator” focused first on his team and on his tenants. “The first couple of weeks, I was on the phone 100% with my team, and the leasing team was on the phone with our tenants, asking them, ‘What’s going on in your world? Are you able to do e-commerce? What do you need?’ It was a crisis, but all crises come to an end, and we had to provide calm in the storm,” Poag said. Being an outdoor lifestyle center—a retail real estate sector pioneered by Josh’s father Dan and his business partner Terry McEwen—The Avenue East Cobb

wasted no time putting together a series of outdoor events. The first was Dinner & Drive-In Movie, which featured restaurant-to-car meal delivery. Limited parking spots were distanced in a checkerboard pattern and proceeds were donated to FeedAmerica. org. For the center’s Grand Re-opening in early June, an outdoor fitness class was hosted by tenant Barre3 and other tenants put on a sidewalk sale. A custom car show filled the Avenue at the end of the month. “Frankly, what we started seeing was that our centers were the hubs of their communities. Word gets out, and people pour in,” Poag said.

Assembly Row – Somerville, Mass.

“We’re thrilled to see you,” shouted signage to guests returning to MainPlace, and most of them had heard or seen similarly toned messages placed by the mall’s owner Centennial on ads and billboards and social media. Mall signs like “OMG, hey you!” and “Stay safe. Have fun,” aimed to treat shoppers like old friends and not new clinic patients. “I grew up in retail, and the way we believe in running our properties is from a standpoint of customer engagement. To drive traffic, you have to create an exciting experience,” said Centennial CEO Steve Levin, whose father owned a chain of 30 Margie’s stores, value-fashion mall shops that were smaller and swankier than TJMaxx or Marshall’s. A robust consumer campaign, then, was one of the first things Levin asked his marketing team to produce when the pandemic broke out. The tagline: “Our Priority is YOU.” “We wanted people to walk back into MainPlace and think, ‘I’m comfortable here. They think about me,’” Levin said. “We feel very strongly that our places should be the places where people want to go when they leave their houses. Life, art, social engagement, shopping, eating—those are things we wanted to conjure in our campaign to re-open the mall.” 20

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PHOTOGRAPHY BY ASSEMBLY ROW

MainPlace – Santa Ana, Calif.

PHOTOGRAPHY BY ARAM BOGHOSIAN

When we visited this town-within-a-town on the outskirts of Boston as part our New England Top Stops tour last fall, one of the most memorable images we took home was a pack of kids crowded around the life-sized giraffe replica outside of Legoland. Now that 15-foot-tall plastic ruminant sports a big black mask with a sunflowers on it. Sunflowers have sprung up all around the streets of Assembly Row — in shop windows, on sidewalk signage, billboards, bathroom doors, hand sanitizers, and automatic parking lot gates. Federal Realty chose this striking image of freshness to signify its property as a welcoming, clean, and safe environment in a flu-flooded land. “The sunflower is a sign of life. It’s something that grows in fresh air. It’s bright and colorful and big. It’s a visual manifestation of a place that people will feel comfortable to re-enter,” said Federal senior VP Patrick McMahon. The sunflowers at Assembly Row are not merely graphic. Actual sunflowers have been planted around the grounds and the windshield wipers of visitors’ cars are planted with “Thank You” cards containing sunflower seeds. “Aside from retail, we have offices, condos, and hotel, and so what we really wanted to do was address those multiple populations and encourage them to come back,” McMahon said. “From the beginning, we decided we needed something that was very visible.”

JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:37 AM

#EnjoyEaston

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7/15/20 9:38 AM

REAL ESTATE

Hill Country Galleria – Bee Cave, Texas

This Invesco town center provided another great example of how colorful, expressive graphic art can recast stern government regulation into refined living. “When the pandemic hit, we quickly called a staff meeting to brainstorm ideas of how the public would react and the feeling they would get. Health and wellness have been a big part of the Hill Country Galleria experience, and that’s what guided our COVID efforts,” said senior project manager Phillip St. Pierre. Among them: • Proper social distancing plans to safely maintain popular programs like Camp Gladiator and Fit 4 Mom; • development of the hashtag #BeeStrongTogether and the hiring of a local artist to create playful and colorful health and wellness messaging; • installation of 18

curbside pick-up locations on the main boulevard to welcome shoppers not yet ready for in-store experiences. Hill Country Galleria converted its pre-booked Saturday Night Concert Series to a virtual event, and invited locals to picnic on the great lawn in marked- out, socially distanced spots. “Our outdoor environment and generous public spaces proved to be the perfect setting for social distancing,” St. Pierre said.

CBRE congratulates the Top 10 COMEBACK Retail Centers, with special kudos to Hill Country Galleria! cbre.us/retail

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JULY/AUGUST 2020 CHAINSTOREAGE.COM

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Naperville Crossings – Naperville, Ill. At the end of February, Phillips Edison & Company posted the best operating results in its history. Three weeks later, its world turned upside-down. PECO manages 317 properties across 31 states and, while every one of its centers has a Publix or a Walmart or a Kroger that hit sales records during April and May, 5,500 of its tenants — whom PECO calls “neighbors” — were out of business. “Each had a different issue. Gyms, clothing stores, and restaurants all had different things going on. Now, these people are entrepreneurs

CHAINSTOREAGE.COM JULY/AUGUST 2020

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and they’re going to solve their own problems. What we tried to do was give them the best chance to make a profit,” Edison said. Neighbors at Naperville Crossings got together to work out solutions for prospering in the shadow of coronavirus restrictions. A landscaped island on the property was converted into a large patio with outdoor dining. Restaurant staffs united to keep the area clean and inviting and to collaborate on curbside pick-up and carry-out options. More tenants than ever joined PECO’s DashComm communications network to access PECO Connect and obtain social media signage, grand opening banners, flyers, and coupons. A Tenant Rewards program helped small business neighbors apply for loans through the CARES Act. “We offered neighbors dollars off their rents for using DashComm to create a sense of community, and being part of the community is something that got embraced.” Edison said. “It’s like being in a war. You never want to wish that on somebody, but you emerge from it stronger.”

Plaza del Lago – Wilmette, Ill.

Plaza del Lago got its start as Spanish Court in the 1920s in this spot north of Chicago then called No Man’s Land. A hundred years later, this now mixeduse project used its open land to survive. High-end, locally owned tenants took the concept of “open air” to a new level. Yoga 6 transitioned from virtual yoga classes to a tranquil experience located in the breezeway adjacent to the center’s historic fountain. Outdoor seating was maximized to accommodate eateries like Convito Café & Market and Burhops Seafood. Chantilly Lace carried on its high level of service through virtual consultations and Zoom shopping party sessions, personally delivering purchases to customers.

7/15/20 9:38 AM

STORE SPACES

Construction Technology Trends By Krystal Spicer The construction industry is well-known for sticking with more traditional methods, not for a lack of wanting to modernize but due to the nature of the business. There is no room for error in a business where peoples’ safety is at risk and businesses (and homes) can be gravely impacted if the wrong calculations are made or materials are not properly used. But the situation is rapidly evolving. Now that many pieces of technology have been tried, tested and perfected, 2020 is the year construction can finally take full advantage of the new technology and equipment. Here are 10 crucial construction technology trends that are impacting the industry in 2020 — and will continue to do so going forward.

Big Data Big data is nothing new, but only now are we seeing it being implemented into the construction industry. It can be utilized to analyze patterns in traffic, the environment and weather to ascertain when construction should begin, achieving the most efficiency.

staff members in and out, track footfall, and geolocation technology can flag any hazards before disaster strikes. Robotics & Drones Robotics can be programmed to perform repetitive work, releasing staff members from arduous tasks and providing more labor-hours for more complex work. Drones are reducing waiting times for materials to be delivered — instead of waiting days, items can now be on site within a few hours. Drone cameras can be used to give a quick site view and identify dangerous areas, improving safety. 5G and Wi-Fi 6 Every workplace needs internet access with a good connection. Installing broadband can be costly, timeconsuming and wasteful if workers will only be using it for a short period. 5G and Wi-Fi 6 offers more flexibility and reduced waiting times.

Artificial Intelligence & Machine Learning Both AI and ML can be used to determine if there are any glitches in the design plan, ensuring that mechanical, electrical and plumbing systems don’t clash. AI can leverage automation for repetitive tasks, increasing productivity; up to 30% of business time can be saved by AI technology. The Internet of Things (IOT) Anyone with a smart device already uses the Internet of Things in daily life. Now IoT is being being rolled out to construction sites. Smart applications can check

Building Information Modeling (BIM) Technology BIM technology allows experts to review a project in real time, which leads to better collaboration. It allows for clash detection and problem-solving during design — before any physical work starts — which improves planning and increases efficiency. Augmented Reality (AR) & Virtual Reality (VR) Technologies No longer reserved for the gaming industry, AR and VR technologies support fast and precise simulation of architectural or structural changes, auto-

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matic measurements and enable digital improvements. VR can provide tours and walkthroughs of designs to provide a full perspective of the finished product. AR can be used to create hazard simulations and aid risk assessments without having to be on site.

3D Printing Both a money and time saver, 3D printing is one of the most revolutionary pieces of technology. When items are needed quickly, having a 3D printer on-site means they can be created immediately. Custom pieces be generated easily. Also, alterations made to current materials become an easier task.

Mobile and Cloud Technologies Cloud technology enables the possibility to access, modify and manage data storeed in remote services. It allows teams from various projects and departments share documents in realtime and to even edit alongside each other, reducing project times.

Blockchain Technology Blockchain technology can remove the worry of payment not being made or the final project not being completed. Payment is stored safely until all parties are happy with what has been delivered per the contract, meaning no one is left unsatisfied. — Krystal Spicer is the digital marketing manager of UK Connect, the UK’s leading communications provider to the construction industry. JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:39 AM

Winter Checklist Tips for preparing facilities for winter weather

From roofs filled with snow to sustained below-freezing temperatures, winter brings with it a long list of facility maintenance concerns for retailers. Here are some recommendations to ensure facilities are properly vetted and ready for the cold weather. • Check heating and cooling systems. A thorough inspection of a store’s HVAC equipment is absolutely critical to ensure the system is ready to handle — in the most efficient way possible — the increased heating demand that comes with colder weather. This will also help protect against outages. Now, more than ever, it’s important to be aware of indoor air quality. Be sure to swap out any air filters that are due to be replaced, according to the manufacturer’s schedule. Clean out ductwork, registers and air returns. To prevent freezing pipes and disruption to other systems, many experts advise a minimum set point of 68 degrees for “unoccupied” mode in cold climates. Gas lines should be checked in facilities that are heated by gas to ensure they are not clogged or corroded. For increased energy savings, experts recommend replacing “on/off” thermostats with advanced programmable models that reduce runtime and space temperatures when spaces are unoccupied. • Thoroughly inspect the roof. Roofs are a major concern during the colder months, especially in areas that receive heavy snow. The best way to protect against winter-related damage is to ensure that the roof is in good shape — and to identify potential potential problems — before the season even begins. Have a qualified expert conduct a comprehensive roofing inspection in the fall, and do periodic checks of the roof throughout the winter. Have a plan in place for snow removal as well — flat roofs require continual maintenance. Also, have a contingency plan for roofing emergencies that identify shut-off valves for gas, water and electricity.

reduce wasted heat, the building should be thoroughly checked for cracks, drafts and leaks. Fix the problem before the cold settles in and heat starts escaping from the building. Insulating doors and windows and locating and eliminating leaks can help reduce energy costs during winter. It’s also important to make sure that partially built or temporary structures can handle the weight of snow build-up. • Winterize floors. Customers are likely to track in ice, snow, rock salt and other icemelting materials during the winter months. Protect highly-traffic entrance areas with an effective matting system at entrances. This not only protects floors from getting damaged, it also decreases the chance of slips and falls. Experts recommend five feet of coarse matting outside a building and five feet of matting directly inside the building, with another five feet of interior matting as a final barrier against floor damage. Other suggestions include adding a couple of additional protective coats of finish to hard surface floors before the weather turns cold to prepare them for rough treatment ahead. • Be prepared for power losses. Losing electricity is particularly worrisome during winter as it can lead to frozen pipes — and resulting water damage. Test generators before winter comes to ensure that critical equipment and systems will continue to operate. Also,

equip offices holding critical data with surge protectors in the event of a power surge. • Protect irrigation systems. Irrigation systems are most prone to damage during cold seasons. Temperature drops can freeze any water left in the pipe or sprinkler system, possibly leading to broken pipe and sprinkler heads, which is why it’s recommended to disable the water supply, and drain and tag backflow preventers. All valves should be drained and left partially open. Also, blow out the system, or utilize previously installed automatic drain valves to ensure all water is removed from pipes and sprinkler heads, and turn off automatic controllers and power.” • Contract for snow and and ice removal. It’s recommended to have a snow removal contractor in place no later than September 1. The longer into the season you wait, the more you are likely to pay because most contractors are fully booked and will have to acquire more equipment and people. • Don’t ignore “dark” stores. Vacant facilities also need to be inspected and prepped for the winter months. They also need to be considered when it comes to snow and ice removal. For dark properties, a reduced scope of work should be put in place to allow for emergency services and to prevent municipal violations and fines.

• Inspect the building envelope. To CHAINSTOREAGE.COM JULY/AUGUST 2020

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7/15/20 9:40 AM

STORE SPACES

Worth the Wait How to extend the customer experience to outside queues By Ron Lutz Brick-and-mortar stores across the country, from Nordstrom to REI, have reopened with limits on customer capacity. What this means is that customers are waiting outside in the unpredictable summer weather for their turn to shop. And waiting in heat and thunderstorms can test the mettle of even your most loyal customer. So how can retailers invest in a more comfortable and convenient outside waiting experience? A great place to start is borrowing (and possibly improving upon) the queue solutions that were already used in the restaurant and theme park industries pre-COVID. These solutions can include moving the line totally into the virtual space and improving physical queues with both technology and infrastructure like seating and shade. Let’s explore how a brand could up your waiting game.

Creating Digital Queues The near future of shopping may not look much different than waiting for a table at a crowded restaurant. That is, if a patron has not already made a reservation, they would give their name and phone number to the host, and the restaurant would then text them when their table was ready. Retailers can take a leaf out of restaurants’ book and use a waitlist management software. Upon arrival at the store, customers can check in and then wait in the comfort of their own air-conditioned cars until the store notifies them that it is their turn to enter. Not only can this method help ensure better social distancing, but it also saves customers from having to wait outside in the elements. Digitally Enhancing Physical Queues If you do not have the capability or budget to move your outside queues into the

Nordstrom is one of the many retailers that is limiting the number of employees and customers in the store at any one time to allow for social distancing.

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virtual world, you can still create a more comfortable physical wait using technology. A big plus of tapping tech is the ability to entertain your customers during potentially long and challenging waits. Think about offering free Wi-Fi access to your waiting customers. You will be amazed by how much happier people become when they realize they can watch viral videos and scroll through social media without using their own data. A second way to entertain customers with technology is to use digital signage, a.k.a. outdoor TVs. Using TVs in lines and waiting rooms is common practice already in restaurants, doctor’s offices and theme parks. Consider showing a movie, sporting event (replays for now), or even a slide show of trivia questions or odd facts to keep customers entertained. A savvy retailer can also slip in additional information about their store’s current specials or show entertaining company commercials — a win/win. Consider a random approach using technology and geofencing to offer shopping discounts via a digital coupon for those waiting in line. This can be done based on factors such as wait time or a planned frequency, all to deliver an emotional connection to the shopper. On the operations front, if a store is limiting the number of people allowed inside, it follows that they will need an employee manning the doors and keeping a headcount of customers already shopping. However, depending on your budget and penchant for testing out new technology, it might also be worth looking into automated door management systems that count shoppers and communicate with customers when there is room to enter. Additionally, remember to analyze the store’s foot traffic data to predict when spikes or lulls, or even changes in customer JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:41 AM

age, gender, etc., may occur. This will help retailers predict everything from how many staff need to be devoted to queue control and how the queue may need to be updated to cater to certain groups. Of course, foot traffic in the world of COVID-19 is going to look different than last year, so it is important to start tracking and analyzing current foot traffic immediately. Physically Enhancing Queues The Weather Company predicts a hotterthan-average summer for the lower 48 states, especially by August. Try to picture retail customers waiting in 80- and 90-degree sunny weather on hot cement or asphalt without shade or seating. It is not a pretty picture and conjures up images of understandably upset customers complaining online and to friends and families about the trial they had to endure just to do a bit of shopping. To be clear, the in-store customer experience should

be amped up and viewed as well worth enduring the queuing wait. But a little care on the store’s part can go a long way. Think about what makes waiting for a theme park ride in the middle of summer bearable. An immediate idea that comes to mind is shade, whether artificially created or cast by the surrounding vegetation. Consider placing UV-blocking pop-up tents along your queues. While stores will need to ensure that the tents are secure and will not blow away, this is an easy and affordable way to provide customers with relief from the sun. Another way to keep customers cool is by providing complementary, cold bottled water.

wait outside on their feet, including senior citizens, differently abled shoppers and people shopping with children. Some stores, of course, like grocery stores, already offer special shopping hours for seniors. But during regular hours, retailers need to think about also offering regularly sanitized seating for these groups and giving them front-of-the-line privileges. Remember, while managing outdoor queues can be an added responsibility to worry about, it can also be an opportunity for your company to provide a stellar customer experience. The current crisis will pass eventually, and customers will remember the experience you provide for years to come.

Prioritizing Special Groups And last, but certainly not least, an important way to provide a better customer experience is to give priority to special groups who will find it the most difficult to

— Ron Lutz is chief retail officer of Miller Zell. Prior to joining Miller, Lutz was a VP at Lowe’s Home Improvement. He was with the company for over 13 years, beginning as a director then advancing through several VP level roles which focused on in-store customer experience.

CHAINSTOREAGE.COM JULY/AUGUST 2020

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7/15/20 10:12 AM

SHOP TALK

Raley’s O-N-E Market

Trending stores: Raley’s has opened a specialty store concept focused on organics, nutrition, education and sustainability. The 85-year-old California-based grocer unveiled the first-ever Raley’s O-N-E Market, in Truckee, Calif. The 35,000-sq.-ft. store is designed to create a unique shopping destination with a curated selection of fresh and organic products and a commitment to transparency and healthy eating. Raley’s said it opted to launch the new concept in Truckee, which is close to Lake Tahoe, because it is a community that supports an active and healthy lifestyle. The two-level store was designed to resemble a ski lodge and to serve as a meeting place for locals and visitors alike. It has a beer and wine bar and two patios (one per floor) with plenty of outdoor seating and each with a fireplace. The store also boasts an array

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of sustainable elements, including high-efficiency LED lighting, motion sensors in all refrigerated and frozen cases and a highly reflective “cool roof.” It also has a low water consumption adiabatic refrigeration condensing system and 210 photovoltaic solar panels. The pine trees cleared for the site were harvested and repurposed into the store’s design, including the 10,000 sq. ft. of paneling on the A-frame ceiling. … Amazon is expanding its checkout-free Amazon Go Grocery format to Redmond, Wash., and Washington, D.C., as part of a wider grocery expansion. The format debuted in February, in Seattle. The store is modeled on — and uses the same technology as — the Amazon Go convenience store concept but on a bigger scale. It features a larger footprint (10,400 sq. ft. overall, with 7,700 sq. ft. in front of house) compared to Amazon Go stores, which range from 450 sq. ft. to 2,700 sq. ft. front of house) and a wider assortment of product that includes fresh produce, grocery and household essentials, ready-made dinner options and alcoholic beverages Every item is priced individually, which means that nothing has to be weighed. Amazon is reportedly also planning to open conventional grocery stores, in North Hollywood, Calif., and the Chicago suburbs Oak Lawn, Schaumburg and Naperville. … Walgreens is testing a smaller store concept that is focused on pharmacy. The retailer has opened more than 30 small-format, pharmacyled stores nationwide as part of a pilot. The stores feature a full pharmacy and a more focused health and wellness and over-thecounter offering, the spokesperson said, along with FedEx and ship-to-store services. … American Eagle Outfitters has added another banner to its store portfolio. The apparel retailer has opened a new format, called Unsubscribed, in East Hampton, N.Y. The store is described as the opposite of fast-fashion and features “consciously made” women’s wear and accessories, with items made by third-party private-label brands along with Unsubscribed’s own private brand. New projects: Amazon has secured naming rights to, and will help redevelop, downtown Seattle’s KeyArena, which will be transformed into the first net-zero carbon certified arena in the world. The facility, which will house a new NHL team and the Women’s National Basketball Association’s Seattle Storm, will be renamed Climate Pledge Arena. It will have all-electric operations and be powered with 100% renewable electricity, both from on-site solar panels and off-site renewable energy. The arena will use reclaimed rainwater in the ice system (creating “the greenest ice in the NHL,” Amazon said), and the original 44-million-pound roof from the existing arena will be reused in construction to significantly reduce the embodied carbon of the building.

JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:42 AM

STORE SPACES Q & A

Snow Management Starts in Summer Savvy facility managers know that planning for winter weather starts months before the temperature drops. Chain Store Age spoke with Teresa Phelps, national sales director of Dentco, about what goes into a successful snow- and ice-removal strategy.

Why is it so important that facility managers plan early and secure snow removal contracts months before the weather even turns chilly? It’s recommended to have a snow removal contractor in place no later than September 1. The later into the season you wait, the more you are likely to pay because most contractors are fully booked and will have to acquire more equipment and people. What considerations do facility managers need to make with regard to snow and ice management for both open properties and dark ones? One consideration is liability and the costs associated with liability. For example, sometimes companies prefer to clear the snow from the sidewalks themselves via their employees to save money, which can potentially be dangerous and cause unnecessary liability. If an employee or customer slips and falls on the sidewalk, the company would be liable. In contrast, if the snow removal contractor handled all services, they would accept all liability. What should multi-site facility managers look for in selecting a snow removal company? An important requirement is an insurance policy to cover the liability of providing snow removal services. These policies protect the customer from any damages that might occur on their property, whether to physical assets or to people. A general liability policy of $2 million is standard, and some companies also carry an additional umbrella/excess liability

policy of up to $5 million. Automobile policies and workers’ compensation insurance should also be in place. The snow removal contractor should also have the proper crews, equipment and ability to service the location(s) as soon as the snow trigger is met, which is typically when there is two inches of snow on the ground or upon icy, slippery conditions. The company should also have the capabilities to manage all of your sites across your footprint and provide timely updates as needed. What are some of the most common specifications/services that should be included in the contract? The scope of work should include the specific areas of the property that need snow removal services, such as the parking lots, loading docks and the private and municipal sidewalks. It should also include all salting services and how to handle an extended snow event. Other things to consider to include in the scope of work: where to pile the snow, potential snow hauling services if needed (such as if the parking lot is too small to pile the snow) and the hours of operation of the store to minimize the interruption to customers and employees. For closed dark properties, a reduced scope of work should be put in place to allow for emergency services and to prevent municipal violations and fines. Tell us about Dentco’s dark store program and snow/ice management services. As an exterior services management (ESM)

company, Dentco manages a network of contractor partners across the nation and can coordinate open active locations and dark store management at multilocation stores and restaurants that may be temporarily or permanently closed. The services that Dentco’s contractor partners handle includes exterior maintenance such as landscaping, irrigation management, weed control, graffiti removal and snow services. Dentco employees — our Quality Service Inspectors — provide regular on-site facility inspections and are our “eyes and ears” on the properties. They ensure the sites are serviced to specification and notify us of any on-site issues or concerns such as illegal dumping, property damage, vagrancy, etc. For snow removal, Dentco handles coordination and management for all locations of a business — whether the locations are open or dark and across different cities or states. We perform on-site pre-season inspections documenting current site conditions and post-season inspections to ensure any property damage caused by our contractors is repaired, seamless to our customers. Quality service managers monitor service transactions via our “Dentco Verified” mobile app. Customers are provided a single invoice with detailed service transaction per location breakdown. Our 24/7 customer service team is available to answer any questions or concerns 365 days a year. We provide a single source solution to our customers.

CHAINSTOREAGE.COM JULY/AUGUST 2020

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7/15/20 9:42 AM

STORE SPACES

Facilities Budget Forecasting Tips for budget building in the new normal

By Jason Cesare Budget planning — even when the economy is booming — is no simple task. Forecasting your business’s financial future becomes even more complex when you throw a global pandemic, widespread social unrest and a continuing trade war into the mix. Those of us in the retail industry are no strangers to change, but we’re seeing transformation on a whole new realitydefining level. And yet, it’s not all doom and gloom: The National Retail Federation predicts that retail sales will grow between 3.5% and 4.1% in the latter half of the year. This is good news, but what does it mean for your bottom line? Maybe you’re on solid ground today, but will a “second wave” of coronavirus cases derail the progress you’re making now? How can you plan a facilities budget when brick-and-mortar business is anything but stable? The truth is, we may be in a state of upheaval now, but the dust will eventually settle. And when it does, you’ll need to have already hit the ground running with a plan and a sound budget. Whether your business is struggling or thriving as a result of recent events, here are a few tips a retailer of any size and in any industry can use for budget-building in the new normal. • Be Careful What You Cut When it comes to modifying your budget,

The bottom line: Be judicious about what you cut, and always put the customer experience first. it’s best to avoid the slash-and-burn approach. It might be tempting to pluck the lowest hanging fruit — in many cases, this means things like payroll, facilities and maintenance — but this can have adverse effects in the long run. Prior to the pandemic, reducing janitorial services, for example, may have been a viable option. But as coronavirus cases ebb and flow across the nation, many consumers are hyper-focused on cleanliness. Several consumer surveys reveal that for some customers, where they shop will be determined by which brands show a commitment to meeting safety standards. The bottom line: Be judicious about what you cut, and always put the customer experience first. • Create a Budget You Can Adapt Over Time Sure, you have an emergency plan in place when events like natural disasters strike, but what about a pandemic? Many companies were caught off guard when COVID-19 made landfall in the U.S., and as a result, they’ve had to view their budgets through an unfamiliar lens.

Chief financial officers and their teams will need to learn as they go, mapping out what processes and procedures have worked over the past four months, what hasn’t worked and where they can hang onto cost savings. • Track COVID-Related Work Orders and Data Diligently In order to build a solid budget, you need to be diligent about data collection. Because a good deal of your relevant facilities management (FM) data will tie back to work orders, making sure your work orders are being tracked and updated regularly is crucial. This will not only help ensure vendor SLA compliance, but it will also give you insight into where you’re spending most of your FM dollars. Increase Reporting on FM Spend You can’t keep stores safe without the proper resources, so it’s important to increase reporting around work order fulfillment, foot traffic and maintenance costs. Due to the unprecedented nature of the pandemic, most organizations don’t have historical data to turn to, or applicable benchmarks to reference. This means the data that you base your budget on is live data — making real-time reporting a necessity for CFOs and facilities managers seeking insights into total FM spend. Much like the weather, forecasting an accurate budget is difficult because it’s dependent on a number of unpredictable factors. When we make the best use of the data at our fingertips, we’re better equipped to weather any potential storms. By remaining adaptable, reallocating resources and analyzing real-time data you can create an FM budget built to last. — Jason Cesare is CFO of integrated facilities management company NEST.

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JULY/AUGUST 2020 CHAINSTOREAGE.COM

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7/15/20 9:05 AM

CONNECTED

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Surviving the ‘new abnormal’ with leading-edge tech It’s only about half over, but 2020 has been a year like no other for retailers. And there is little relief in sight. As of mid-July, the COVID-19 virus was spreading unevenly as states begin various stages of reopening, pausing and even reclosing. And civil unrest has become an added unpredictable factor. But even amid all the upheaval, retailers can maintain “normal” operations by deploying the right solutions. Here are three leading-edge technologies that can help your enterprise survive and hopefully thrive during these uniquely challenging times. Mobile apps Both customers and employees face uncertainty about when or if stores will be open, whether in-store shopping and/or BOPIS and curbside pickup are available and what type of delivery services are offered. All of these factors can change by week or even day, depending on situations such as COVID-19 infection rates and civil unrest. The best way to quickly distribute information and adapt to changing shopping circumstances is via mobile app. A robust employee app enables retailers to effectively inform large numbers of employees of situational changes to their jobs, in real time. Meanwhile, customer apps allow retailers to notify customers of real-time issues. In addition, shoppers can use apps to browse available inventory, as well as make and pay for selections. This permits customers to still have access to merchandise if brick-andmortar stores suddenly need to close, as well as have the option to pick items up or have them delivered by whatever means are feasible given current circumstances.

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Autonomous delivery The demand for delivery has surged as a result of COVID-19. Civil unrest can also make visiting a store unsafe or force store closures, which will likely ratchet up delivery demand even further. However, retailers may already be facing shortages of drivers. Possible further pandemic outbreaks or public turmoil could also limit the availability of drivers, just as the need for delivery is reaching all-time highs. An increasing number of retailers are piloting autonomous delivery vehicles, such as selfdriving automobiles and self-piloting drones. Autonomous delivery technology offers even further potential ROI for retailers who want to continue serving the needs of customers even as they face potential shortages of human drivers or situations where a driver might risk personal harm. Flexible supply chain Mobile apps and autonomous delivery vehicles can serve as crucial front-end tools that enable retailers to continue serving customers as normally as possible during abnormal events. But without a solid back-end foundation, these solutions will leave retailers unable to fulfill their orders. That’s where flexible supply chain systems come in. In the current unpredictable environment, retailers must be able to responsively pivot their supply chains in close to real time as events require. If a damaged location can no longer serve as a “dark store” to support local delivery, retailers need to be able to accurately track needed products at other nearby stores and warehouses. Stores may have to quickly be set up for curbside and BOPIS depending on shifting COVID-19 guidelines. Retailers need to implement cloud-based supply chain solutions they can easily scale and customize according to needs that may literally change day to day. Artificial intelligence and machine-learning capabilities help ensure supply chains can react with maximum efficiency to situations that simply cannot be predicted. Technologies such as computer vision and RFID enable the item-level inventory transparency that is necessary to achieve normalcy in a decidedly abnormal social and business environment.

Dan Berthiaume dberthiaume@chainstoreage.com JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:44 AM

TECH Q& A

Text Spreads the Word Through the Pandemic Retailers can turn heightened consumer interest in text-based communication to their advantage. As a provider of an integrated platform for text-based consumer communication and payment, Podium is positioned at the forefront of contactless commerce. Eric Rea, CEO and co-founder of Podium, recently shared insights on how retailers can leverage texting to boost sales, conversion rates, customer satisfaction and return visits in the age of COVID-19. How have consumer expectations changed as a result of COVID-19? Over the past five years or so, we have seen consumers moving toward messaging as the preferred way to communicate with a business. What COVID-19 did was cement and expand this trend. Since the onset of the virus, 41% of Americans are more interested in texting with a business than they were prior to the pandemic and nearly half (45%) have texted with a retailer in the past week. They are expecting retailers to be using texting to do everything from arranging curbside pickup of orders to executing contactless payment via text, and everything in between. Consumers still want to do business with local retailers, but they want to do it without making physical contact. What can retailers do to capitalize on rapid growth in the use of contactless payments? It’s clear that the majority of consumers just aren’t comfortable with physical exchange of cash or their cards right now. Over 60% of consumers say contactless payment is a determining factor for where they are doing business. In addition, consumers are showing there might be staying power for this new method of payment, with 78% indicating that they want contactless payments via text to continue once the pandemic is over. How can asynchronous communication/texting help retailers convert ris-

ing volumes of inbound web traffic into sales? More retailers are being asked to do more with fewer resources than ever before. When you have been in business for decades and have established operations, to have that upended overnight creates a huge strain. Not only that, but customers are no longer coming in your door, they are coming in your website. We are seeing what we think is a permanent shift in buying patterns. The problem is, most locally-based retailers are not equipped from a staffing perspective to have a live chat functionality on their site. That is where a messaging-based webchat makes a big difference. Because of the asynchronous nature of texting, consumers can reach out through the widget on the site and then leave their browser knowing the conversation has shifted over to their phone. It then gives the retailer a much longer window to respond, giving them much higher bandwidth to respond to other inbound messages. What key areas of the enterprise should retailers be focusing on the most in the “new normal?” Nearly three in five consumers (57%) said a local retailers’ pandemic-friendly services (including curbside pickup, delivery and contactless payments) led them to consider a local retailer for the first time. Of those, 92% said they’re “likely” or “very likely” to return to

this business even after COVID-19 restrictions lift. We haven’t seen this large of a window for new consideration in over a generation. This is a massive opportunity and should be a major point of emphasis for retailers. Going the extra mile to modernize your communication tools and provide a safe and high-quality experience will have large implications for the future of your business. How can Podium’s solutions and services help retailers meet the needs of customers and employees in these challenging times? Of all the data we have seen, perhaps the largest shift is that consumers view texting as the preferred method to communicate with local businesses (41%), over other methods such as calling (23%), emailing (18%) and website chat (15%). This sentiment is not limited to millennials. Texting is the preferred communication channel of all age groups, including those over 60 years old. Podium provides retailers the ability to bring all these text conversations into one place and modernize the way they are doing business. Everything from converting web traffic into actual customers, scheduling appointments, answering questions, sending photos and video, arranging curbside pickup, accepting text-based payments, getting customer feedback and getting online reviews can all happen through one inbox.

CHAINSTOREAGE.COM JULY/AUGUST 2020

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7/15/20 9:45 AM

TECH

Safe Landing

Bob’s Discount Furniture puts premium of safe store reopenings By Dan Berthiaume Bob’s Discount Furniture went beyond government guidelines for its comprehensive COVID-19 store reopening strategy. The Manchester, Conn.-based home furnishings retailer, which opened for business in 1991, has doubled its store count in the past four years, giving it a total of 128 stores. In addition to recent expansion in California and Nevada, the retailer also plans to open new stores in Arizona, Ohio, and Michigan later in 2020. However, the emergence of COVID-19 temporarily halted Bob’s busy brick-and-mortar activity. “We began closing our first stores in Philadelphia on March 15,” said Roger Dunlap, senior VP of sales and operations for Bob’s Discount Furniture. Bob’s maintained a full national store shutdown for about six weeks, initiating a gradual reopening process on May 5. At press time, all Bob’s stores are open. But the retailer only reached this point after carefully considering every aspect of the reopening process. “Before we started reopening stores, we realized we were operating in a whole new world,” said Dunlap. “The mindset of customers and associates had changed. Naturally, they had some concerns about coming back.” To alleviate those concerns, Bob’s made sure it could control the overall store environment while meeting, if not exceeding, all the different rules put in place by different states and municipalities. The day before a store reopened, the retailer conducted two hours of extra training on compliance with COVID-19 regulations and social distancing. The retailer also confirmed that its “new normal” store environment still provided the experience Bob’s shoppers had come to expect over the years. We wanted to figure out what is the Bob’s way and what are Bob’s rules?” stated Dunlap. “We limit the amount of people or shopping groups in the store to 10-15 in the store at a time, based on the size of the store. Furniture customers regularly shop in groups.”

Across the country, Bob’s stores operate on a limited eight-hour schedule from 11 a.m. to 7 p.m., seven days a week. Exceptions are made for shoppers who need them. “There are additional appointments for people who are not comfortable shopping during our normal hours,” explained Dunlap. “For example, customers who have underlying conditions, are seniors, or are healthcare or frontline workers who may not be able to shop during normal store hours can shop either before the store is open or after closing. For customers with special situations we offer appointment-based shopping two hours before and after regular opening and closing times.” Bob’s new store protocols — ABC, or “Always be Cleaning” — ensures that all associates arrive to work healthy and practice social distancing, and that the store environment is hygienic. “Prior to the start of their shift, we take the temperature of store employees with mobile temperature-reading guns,” said Dunlap. “They are asked health-related questions and wash their hands in between serving customers. Everyone wipes down surfaces throughout day. Stores are professionally cleaned every day before opening. Beds and pillows have disposable protective coverings for customers to use when they try them out.” “Also, salespeople are not right on top of shoppers, but are within earshot if they are needed,” Dunlap added. “Most stores are operating above local requirements.” Bob’s also extends its COVID-19 protocols to shoppers, asking customers the same health questions as it does of its employees and giving them the option of a temperature check. (The majority agree, Dunlap said.) In other moves, every store has added the new position of a greeter who is stationed at a table at the front of the store wearing a protective face covering, asking questions and taking the temp of customers. All employees wear a mask when dealing with the public, and if masks are not required for customers, Bob’s strongly recommend they wear them.

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“All of these protocols set the tone for the experience,” Dunlap explained. Digital Focus: Bob’s, which had already been transitioning its business to rely more heavily on e-commerce before the pandemic, has been focusing on digitally serving customers during the crisis. This includes offering contactless delivery of online orders. The delivery team will drop off furniture items outside a customer’s residence with no touch. Bob’s also still offers its white glove delivery service, where personnel set up furniture in the customer’s home and remove old items, as well as threshold delivery where furniture is left in the room of the customer’s choice. In addition, Bob’s has been utilizing store managers to take phone orders at stores across the country as part of what it calls the “Bob’s Squad.” “We learned that phone orders are still important,” Dunlap said. “They are now a revenue platform and we plan to have Bob’s Squad in place long-term.” JULY/AUGUST 2020 CHAINSTOREAGE.COM

7/15/20 9:45 AM

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7/15/20 9:04 AM

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