Smart Building Technologies Center CEOs on Holiday 2020 Dark Store Strategies
s r e l i a t e U.S. R
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from the editor’s desk
on the level: a real estate column
tech viewpoint: a retail tech column
Contents VOL. 96 SEPTEMBER/OCTOBER NO. 5
s r e l i a t e U.S. R 22
Expert Insight: For momentum going into 2021, retailers should make this holiday joyful for in-store shoppers.
Best Practices for HVAC Amid COVID-19
Target rebuilds damaged store in record time with an emphasis on community involvement.
Smart building technologies can help retailers minimize exposure to a COVID-19 event. Hand Hygiene: Benefits of touchless hand dryers
8 COVER STORY
Walmart takes the top spot on Chain Store Age’s annual listing of the top 100 U.S. retailers (by total revenue).
Trending Topics: Walmart sets big new renewable energy goal; bank invests in safety with improved indoor air quality and restaurant chain deploys UV light, air purification system Vendor Q&A: NGS Films + Graphics’ James Beale discusses two big retailer concerns: employee/ customer wellness and the need to protect property against forced entry or vandalism.
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CHAINSTOREAGE.COM SEPTEMBER/OCTOBER 2020
Contents VOL. 96 SEPTEMBER/OCTOBER NO. 5
Center CEOs talk COVID and Holidays A dozen-plus of the most active operators of malls and shopping centers lay out their thoughts and plans for one of the most important holiday seasons in decades.
Elements of a dark store strategy
Vendor Q&A: SafetyCulture’s Bob Butler explains how automation and mobile technology can help retailers meet today’s new safety and hygiene protocols.
Land’s End’s catalog roots helped with its online success 4
SEPTEMBER/OCTOBER 2020 CHAINSTOREAGE.COM
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launching new concepts. Dick’s is opening 11 stores in October, on the heels of 14 new locations since August. It also unveiled a clearance center format and a pop-up warehouse format.
Bucking the Trend The surge in online shopping has been much in the news these past few months. And with good reason. The digital channel proved a lifeline to some retailers while their stores were closed during the pandemic. In the second quarter of 2020, U.S. retail e-commerce sales jumped by almost a third (31.8%) from the previous quarter, or 44.5% year over year, according to the US Census Bureau of the Department of Commerce. But amid all the buzz about digital, it’s worth remembering that brick-and-mortar retail is not as moribund as some would believe. Yes, some retailers are downsizing their footprints and many scaled back planned 2020 expansion due to COVID-19. But there are others who are bucking the trend and still see plenty of opportunity for brick-and-mortar growth — and I’m not talking just about Dollar General and Dollar Tree. Here are seven retailers opening new doors this year — and beyond. • Aldi: The discount grocer has embarked on the next wave of its national expansion. With some 2,000 U.S. locations, it will open about 70 stores this year, including its firstever locations in Arizona, its 37th state. • At Home: The pandemic caused it to temporarily cut back on expansion, but the 219-store value home furnishings chain still envisions growing into a 600-store fleet in the future. “We love the power of the stores,” CEO Lee Bird said in June. “And we look forward to adding more stores … next year, we plan to open up a few stores that were in the pipeline and then get back to our long-term targets after that.” • Dick’s Sporting Goods: The sporting goods retailer is not only expanding, it’s also
• Five Below: Five Below didn’t let the pandemic get in the way of its store expansion. The value teen and tween retailer will open 110 to 120 stores this year and that’s just the tip of the iceberg. “With nearly 1,000 stores today, we have a long runway of growth with a nationwide potential of over 2,500 stores,” CEO Joel Anderson told analysts on the chain’s earnings call. • Lidl: Lidl, the German discount grocer similar to Aldi, said in August that it would invest $500 million to open 50 stores in the U.S. by the end of January, giving it a total of 150-plus U.S. locations. • Payless: The budget footwear retailer is back in business in North America — with a modified name and big store expansion plans. The company (formerly Payless Shoesource) filed for bankruptcy in 2019, and closed its 2,500 stores and ecommerce site in North America. But it’s back with a new store model and plans to open 300 to 500 locations during the next five years, starting with a prototype in Miami by yearend. • Tractor Supply: The nation’s largest rural lifestyle retailer, which just opened its 1,900 location, is on track to open 75 stores by yearend. Its business has been on a fast track amid the increased appeal of more rural areas, especially during the pandemic. “We’re gaining new customers at the fastest rate in the history of the company,” CEO Hal Lawton said on the company’s earnings call in July. “The new customers we’re acquiring as compared to our core customers, they’re skewing younger, higher income and closer to 50% female. … They’re embracing the ‘out here’ lifestyle, and they’re shopping Tractor Supply because we are that lifestyle.”
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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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mid all the uncertainty and disruption in retail, Chain Store Age’s Top 100 Retailers list offers a picture of remarkable stability — at least in its upper echelons. The list is an annual ranking of the country’s largest retailers based on annual revenue for each company’s most recently completed fiscal year which, for most retailers, was before COVID-19 upended the economy. The full impact of the pandemic on the retail industry — temporary (and, in some cases, permanent) store closings, e-commerce and grocery surges, bankruptcy filings, supply chain disruption and real estate downsizing — will come into view when retailers close the book on their current fiscal year. But one thing has already been made clear: Retailers that dominated before the crisis are poised to emerge from it stronger and more formidable than they were before — at the expense of their smaller competitors. The retailers that dominate the upper ranks of the CSA Top 100 — powerhouses that include Walmart, Amazon, CVS Health, Costco, Walgreens, The Kroger Co. and Best Buy to name a few — are likely to retain their top spots even amid this year’s unprecedented disruption. This is particularly true for the top two finishers, Walmart and Amazon. The world’s biggest retailer and the coun8
try’s largest private sector employer maintained its long-standing No. 1 ranking in the CSA Top 100, with a record $523.96 billion in sales. Walmart in recent years has invested billions in updating its physical and digital assets, updating its stores and technology and expanding its fulfillment capabilities. The investments have paid off handsomely — especially during the pandemic. Walmart’s U.S. e-commerce sales in its most recent quarter jumped 97% amid all-time high volumes for grocery pickup and delivery services. Comparable sales, excluding fuel, rose 9.3%. At the quarter’s end, online grocery pickup was available in 3,450 stores and same-day delivery at 2,730 locations. Walmart’s online market share still dwarfs that of archrival Amazon. But there is no question that the chain is well on its way to becoming every inch the behemoth online
that it is in brick and mortar. Walmart’s online market share is expected to hit 5.8% in 2020, according to eMarketer, as it surpasses Ebay as the second largest online retailer in the U.S. (Amazon’s share is expected to reach 38% by year-end.) Amazon retains its No. 2 position on the CSA Top 100 for the fourth consecutive year. The company’s revenue rose 21% in 2019, to $280.52 billion, fueled by sales and its expanded offering of services, including Prime, which counted more than 150 million paid members worldwide at the end of 2019. As in prior years, growth of Amazon’s cloud computing unit, Amazon Web Services, outpaced the company as a whole, with revenue rising 37%. Amazon marshalled all the forces at its disposal when the pandemic struck — and then some. The company hired more than 175,000 fulfillment center and delivery workers between March and mid-April to get orders to customers. The initial surge in orders caught Amazon a bit off guard, with inventory interruptions, out-of-stocks and delayed deliveries. But the company worked to regain its footing. Amazon’s sales took off during the first days of the pandemic and show no sign of losing momentum., increasing 40% to $88.8 billion in its most recent quarter. And in true Amazon fashion, the company continued to spend money, investing more than $9 billion in capital projects, including fulfillment, transportation and AWS. Analysts expect Amazon to exceed $100 billion in quarterly revenue for the first time ever in the fourth quarter. Only one other retailer has ever hit that target: Walmart.
METHODOLOGY: TOTAL REVENUE FUELS RANKING
Chain Store Age’s Top 100 ranks retail companies by total revenue — as opposed to only retail sales — as reported in the firm’s most recently completed fiscal year. The numbers for privately owned companies that do not release annual reports and/or financial statements are estimates based on independently published reports and CSA research (compiled by contributing editor Debra Hazel.) The metrics listed in the Top 100 include net revenue and store count. For retailers based in North America, the data reflects the company’s total global store network (except if otherwise noted). For foreign-based companies such as Ikea, only the metrics relating to the retailer’s North America division are given (except if otherwise noted.)
Bentonville, Ark. 1/31/2020 www.walmart.com
CVS Health Corp.
Costco Wholesale Corp.
Seattle 12/31/2019 www.amazon.com Woonsocket, R.I. 12/31/2019 cvshealth.com
Issaquah, Wash. 8/30/2020 www.costco.com
Deerfield, Ill. 8/31 /2019 www.walgreens.com
The Kroger Co.
The Home Depot
Cincinnati 2/1/2020 www.kroger.com
Atlanta 2/2/2020 www.homedepot.com Minneapolis 2/1/2020 www.targetstores.com
Apple Inc. E
2018 Revenue 
2019 Store Count
2018 Store Count
Mooresville, N.C. 1/31/2020 www.lowes.com Cupertino, Calif. 9/28/2019 www.investor.apple.com
Boise, Idaho 2/29/2020 www.albertsons.com
6,924 (U.S. only)
5,933 (U.S. only)
Alimentation Couche-Tard Laval, Quebec 4/26/2020 www.couche-tard.com
Chantilly, Va. 12/31/2019 www.aholddelhaize.com
Best Buy Co.
Richfield, Minn. 2/1/2020 www.bestbuy.com
The TJX Cos.
Framingham, Mass. 2/1/2020 www.tjx.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. CHAINSTOREAGE.COM
At peak closure during the pandemic,
of retailers had closed at least
of their physical stores, including those in enclosed malls and outlet centers. More than
Walgreens Boots Alliance
2019 Revenue 
were able to get some form of rent relief from landlords, with back-rent deferrals to late 2020 or 2021 being the most common concession. Source: National Retail Federation and PJ Solomon
Amazon is the world’s most valuable brand (at $315.5
in a ranking that combines analysis of retailers’ financial performance with the opinions of millions of consumers surveyed around the world. Rounding out the top five: Alibaba Group, McDonald’s, The Home Depot and Nike. Source: “BrandZ Top 75 Most Valuable Global Retail Brands,” from WWP and Kantar
E-commerce sales are projected to grow
in 2020, increasing online penetration from16.6% to 20.2%. Total retail sales are projected to fall
of consumers said they are more likely to use curbside pickup following the COVID-19 outbreak; and
of consumers who subscribed to multiple delivery services said they were still more likely to opt for curbside delivery once the pandemic subsides. Source: CommerceHub
2019 Revenue 
2018 Revenue 
2019 Store Count
2018 Store Count
717 (U.S. only)
696 (U.S. only)
Publix Super Markets
Lakeland, Fla. 12/28/2019 www.publix.com
Pilot Co. M
Knoxville, Tenn. 12/31/2019 www.pilotflyingj.com
Dollar General Corp.
Goodlettsville, Tenn. 2/1/2020 www.dollargeneral.com
Seattle, Wash. 9/29/2019 www.starbucks.com
San Antonio 10/31/2019 www.heb.com
Cincinnati, Ohio 2/1/2020 www.macys.com
Chesapeake, Va. 2/1/2020 www.dollartree.com
Rite Aid Corp.
Camp Hill, Pa. 2/29/2020 A www.riteaid.com
Verizon Wireless ER
Basking Ridge, N.J. 12/31/2019 www. verizonwireless.com
Grand Rapids, Mich. 2/1/2020 www.meijer.com
Essilor Luxottica Group (North America) Port Washington, N.Y. 12/31/2019 AX www.luxottica.com
Menomonee Falls, Wis. 2/1/2020 www.kohlscorporation.com
7-Eleven (US and Canada) M
Dallas 2/28/2019 www.7-eleven.com
The Sherwin-Williams Co.
Cleveland 12/31/2019 www.sherwin-williams.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. 10
SUPER SERVICE TEAM
Facebook is the most used
, followed by Instagram
(37)% (32)% (22)% , Twitter
and Snapchat .
Retail shrink totaled
$61.7 billion in 2019 — up from
the year before — amid rising employee theft, shoplifting and organized retail crime. Shrink averaged 1.62% of sales during 2019, up from 1.38% in 2018.
Source: “National Retail Security Survey,” from the National Retail Federation
2019 Revenue 
2018 Revenue 
2019 Store Count
2018 Store Count
Wawa M Wawa, Pa. 12/31/2019 M www.wawa.com
Menards E Eau Claire, Wis. 12/31/2019 www.menards.com
5,885 (U.S. only)
5,772 (U.S. only)
AT&T Wireless ER
Dallas 2/31/2019 www.att.com
Wakefern Food Corp. Keasbey, N.J. 9/29/2019 www.shoprite.com
San Francisco, Calif. 2/1/2020 www.gap.com
Dublin, Calif. 2/1/2020 www.rossstores.com
Aldi Inc. E Batavia, Ill. 12/31/2019 www.aldi.us Nordstrom
Seattle, Wash. 2/1/2020 www.nordstrom.com
West Chester, Pa. 12/31/2019 www.qvc.com
Monrovia, Calif. 6/30/2019 E www.traderjoes.com
L Brands Inc.
Columbus, Ohio 2/2/2019 www.lb.com
BJ’s Wholesale Club M Westborough, Mass. 2019 est. www.bjs.com
Memphis, Tenn. 8/31/2020 www.autozone.com
J.C. Penney Co.
Plano, Texas 2/1/2020 www.jcpenney.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. 12
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of companies surveyed have more data on their customers than two years ago, but only
have high confidence in data quality. And
only of companies surveyed can use customer data to personalize and customize interactions;
can orchestrate actions in real time. Source: Forrester Consulting for customer experience solutions provider CSG
of consumers would stop shopping at a retailer if they knew the brand was not implementing health and safety measures;
ranked the grocery sector as “best’ at implementing health and safety protocols. Source: Ipsos’ Consumer Health & Safety Index
2019 Revenue 
2018 Revenue 
2019 Store Count
2018 Store Count
Bed Bath & Beyond Inc.
Union, N.J. 2/29/2020 www.bedbathandbeyond.com
Quik Trip M
Tulsa, Okla. 4/30/2019 www.quiktrip.com
Racetrac Petroleum M
Atlanta 12/31/19 www.racetrac.com
San Jose, Calif. 12/31/2019 www.ebay.com
Hy-Vee M West Des Moines, Iowa 9/30/2019 www.hy-vee.com Office Depot
Boca Raton, Fla. 12/29/2019 www.officedepot.com
Southeastern Grocers E
Jacksonville, Fla. 12/31/2019 www.bi-lo.com
O’Reilly Automotive Springfiled, Mo. 12/31/2019 www.oreillyauto.com
Advance Auto Parts
Roanoke, Va. 12/28/2019 www.advanceautoparts.com
Good Neighbor Pharmacy E
Chesterbrook, PA 9/29/2019 www.mygnp.com
Wegmans Food Markets
Rochester, N.Y. 12/31/19 www.wegmans.com
Associated Wholesale Grocers Kansas City, Kansas 12/29/2019 www.awginc.com
Bellevue, Wash. 12/31/2019 www.t-mobile.com
Giant Eagle Inc. E
Pittsburgh 6/30/2019 www.gianteagle.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. 14
of consumers said coupons or discounts inspire them to try a new brand;
said it would lead them to make an impulse purchase;
said receiving a coupon or discount speeds up their decision to make a purchase. Source: “Consumer Intel Report,” from Valassis
of retailers said their companies are permanently changing remote working policies for corporate employees;
said they expect remote employees will work from home three to four days a week;
said their remote workers will work from home virtually 100% of the time. Source: Korn Ferry
2019 Revenue 
Casey’s General Stores Ankeny, Iowa 4/30/2020 www.caseys.com
2018 Revenue 
2019 Store Count
2018 Store Count
Sheetz E Altoona, Pa. 9/30/2019 www.sheetz.com
PetSmart M Phoenix 1/31/20120 www.petsmart.com
Boston 12/31/2019 www.wayfair.com
Framingham, Mass 1/31/2020 E www.staples.com
Dick’s Sporting Goods
Coraopolis, Pa. 2/1/2020 www.dickssportinggoods.com
Army & Airforce Exchange Service
Dallas 2/1/2020 www.aafes.com
Tractor Supply Co.
Brentwood, Tenn. 12/28/2019 www.tractorsupply.com
New York City 2/1/2020 www.footlocker.com
IKEA North America E Conshohocken, Pa. 8/31/2019 www.ikea.com
Hudson’s Bay Company E Toronto, Ontario 2/2/2020 www.hbc.com
Bolingbrook, Ill. 2/1/2020 www.ulta.com
Burlington Coat Factory
Burlington, N.J. 2/1/2020 www.burlingtoncoatfactory.com
Bass Pro Shops E Springfield, Mo. 12/31/2019 www.basspro.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. 16
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Imports at major U.S. retail container ports during 2020 are expected to see their lowest total in four years as the impact of the coronavirus pandemic on the U.S. economy continues. Source: National Retail Federation and Hackett Associates
of consumers would be dissuaded from making a planned online purchase if shipping was too expensive, followed by slow website load times
and bad product descriptions
Source: “Reimagining Commerce,” from Episerver
2019 Revenue 
2018 Revenue 
2019 Store Count
2018 Store Count
WinCo Foods M
Boise, Idaho 3/31/2020 www.wincofoods.com
Transform Holdco (Sears) E
Hoffman Estates, Ill. 1/28/2019 www.searsholdings.com
Grapevine, Texas 2/1/2020 www.gamestop.com
Marathon Petroleum Corp. R 12/31/2019 www.speedway.com
Little Rock, Ark. 2/1/2020 www.dillards.com
Signet Jewelers Ltd.
Hamilton, Bermuda 2/1/2020 www.signetjewelers.com
AVB Brandsource M Nashville 12/31/2019 www.brandsource.com
Oak Brook, IL 12/28/2019 www.acehardware.com
Sephora US E Paris 12/31/2019 www.lvmh.com Williams-Sonoma
San Francisco 2/1/2020 www.williams-sonoma.com
Sprouts Farmers Market San Bernardino, Calif. 12/29/2019
Ascena Retail Group Mahwah, N.J. 8/3/2019 www.ascenaretail.com
Hobby Lobby E
Oklahoma City, Okla. 12/31/2019 www.hobbylobby.com
EG America E
Westborough, Mass. 12/31/2019 www.eurogarages.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. 18
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of Americans said theyâ€™re more likely to buy from a company that gives to charities or is associated with causes they believe in;
would cut ties with their favorite retailer if it publicly supported something or someone they strongly disagreed with.
of global retailers operate fully automated warehouses, with
aspiring to do so over the next five years Source: Blue Yonder and the University of Warwick,
2019 Revenue 
2018 Revenue 
Neiman Marcus M Dallas 7/31/2019 www.neimanmarcus.com
San Diego, Calif. 1/31/2020, www.petco.com
Belk E Charlotte, N.C. 1/31/2020 www.belk.com
Big Lots Inc.
Columbus, Ohio 2/1/2019 www.biglots.com
Demoulas Supermarkets M Tewksbury, Mass. 1/2/2020 http://www.mydemoulas.net/
Baltimore 12/31/2019 www.underarmour.com
The Michaels Companies
Irving, Texas 2/1/2020 www.michaels.com
Brooklyn, N.Y. 12/31/2019 www.etsy.com
2019 Store Count
New York City 7/1/2019 www.coach.com
Discount Tire M
Scottsdale, AZ 12/31/2019 www.discounttiredirect.com
Lincolnshire, IL 12/31/2019 www.campingworld.com
Academy Sports & Outdoors
Save Mart Supermarkets E Modesto, Calif. 6/30/2020 www.savemart.com
2018 Store Count
Stater Bros. Markets
San Bernadino, Calif. 9/28/2019 E www.staterbros.com
Defense Commissary Agency Fort Lee, Va. 9/30/2019 www.commissaries.com
Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, NA: Not available. 20
Jobsite Camera Experts
New Holiday Priorities More than any other business, retail is the face of the holidays By Bill Chidley For retail, more is at stake this year than sales alone. One thing we can be certain of this holiday season is that there will be shoppers returning to stores. What is uncertain is how many and where, or what they will buy. Financially there will be the inevitable winners and losers, but let’s consider what else is at stake as the season begins. Online shopping has been a hero of the pandemic, but physical retail has a point to make — it is still an indispensable part of life. In fact, Kohl’s recently stated customers shopping both channels are six times more productive than digital-only shoppers, and four times more productive than those shopping stores only. Shopping is fundamental to experiencing the season. The holidays will mean venturing into a store after a long, pandemic-induced hiatus for many people. This is the moment the retail industry must alleviate anxiety and jump-start relevance. Think of it as a second chance to make a first impression. If retailers deliver an experience that fulfills the benefits of physical shopping — to explore, be inspired, engage the senses, and connect — they will create momentum going into 2021. Reward the risk. For many, the idea of venturing into busy retail centers and stores still seems risky. The desire to visit physical stores is partly to get deals, but it also gives an emotional immersion into the season. It makes it real. Retailers are obliged to deliver on shopper expectations with a strong holiday spirit. Like going to see their favorite band, they will expect you to play your hits. This year more than ever, retail needs to deliver the familiar expectations of the season through store decoration, displays, and merchandising. Don’t hold back — dial it up. Stay disciplined. When chaos is thriving, retail needs to be
an oasis of order. Stress from the pandemic, combined with an anxious political climate, means that shoppers may be pre-loaded to expect chaos when shopping. Retailers must provide well-maintained displays and clear signage to not look like part of the problem, but part of the solution. Bad experiences will confirm expectations and be hard to shake off post-holiday. But erase the stress, and the shopping excitement can grow into a refreshed relationship. Shoppers are on a mission, and retail needs to over-deliver. The holidays always bring in new customers, and if you win their trust with a great experience, you could make them loyal year-round.
from previous seasons to forecast what will happen. In most cases, human resources, space requirements, processes, IT contingencies, and the unintended consequences of these new business methods will be battle-tested for the first time. Shopper expectations are high, so be aggressive behind the scenes to adapt, adopt, and scale the adjustments and insights quickly to avoid aggravating shoppers. We’re already seeing retailers such as Target prepare, announcing it would change its staffing approach, dedicating more workers to same-day services such as curbside pickup and hiring more people at distribution centers.
“The retail industry has the opportunity to
turn this season into a critical first step in reengaging with shoppers for the long term by giving them a much-needed dose of joy.” Be human. Retailers can be easily substituted; people and communities cannot. Physical retail lifts the curtain on the app and online world of retail to expose the human side. Make it count. As the store merchandises your products, your people merchandise your brand and connect it to a place. Seek ways to demonstrate the human side of the store experience through elevated service levels and make it known that your people care. There is a big opportunity with BOPIS and curbside pick-up customers, where retailers can connect at a higher level than an anonymous UPS delivery. Learn and adapt. Retailers also now face a host of new operational complexities. The pandemic has been an accelerator of BOPIS and curbside programs, meaning a lack of historical data
Be kind. “We’re all in this together” has become a cliche, but that doesn’t mean we should ignore what is behind it. The holidays are a perennial source of tension, pandemic, or not. Retailers need to take the effort to treat employees and customers with a heaping dose of grace. We all need to do what we can to respect each other, knowing that we can never know what someone else may be dealing with in these challenging times. The retail industry has the opportunity to turn this season into a critical first step in reengaging with shoppers for the long term by giving them a much-needed dose of joy. More than any other business enterprise, retail is the face of the holidays, so let’s all face it with a smile. Retailers are, in fact, all in this together. — Bill Chidley is a partner and executive director of strategy & insights at ChangeUp. SEPTEMBER/OCTOBER 2020
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Spotlight on HVAC Best Practice COVID Guidelines: CDC and ASHRAE Two of the leading voices in the junction between COVID-19 and indoor air quality are the American Society of Heating, Refrigerating and AirConditioning Engineers and the Centers for Disease Control and Prevention. Each organization has offered COVID-19 best-practice guidelines for building owners and managers regarding HVAC systems. The following is a summary of that advice (combined from the two organizations to eliminate overlap) as featured in the report, “COVID-19 and HVAC: Creating Safer and Healthier Indoor Air Quality,” from CoolSys. Increase outdoor air ventilation, using caution in highly polluted areas. With a lower
occupancy level in the building, this increases the effective dilution ventilation per person. Ensure ventilation systems operate properly and provide acceptable indoor air quality for the current occupancy level for each space. Disable demand-controlled ventilation (DCV). Further open minimum outdoor air dampers (as high as 100%) to reduce or eliminate recirculation. In mild weather, this will not affect thermal comfort or humidity. However, this may be difficult to do in cold or hot weather.
Improve central air filtration to MERV 13 or the highest compatible with the filter rack and air-handler, and seal edges of the filter to limit bypass. Check filters to ensure they are within service life and are appropriately installed. Consider portable room air cleaners with HEPA filters. Consider UVGI (ultraviolet germicidal irradiation), protecting occupants from radiation, particularly in high-risk spaces such as waiting rooms, prisons and shelters. Keep systems running longer hours — 24/7, if possible — to enhance air exchanges in the building space.
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Target in Record Store Rebuild
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Target Corp. didn’t waste any time rebuilding its store on Lake Street in the company’s Minneapolis hometown. The store, which opened for business in 1976, was badly damaged in the violent protests that broke out in the days following the death of George Floyd while in police custody in late May. At press time, the store was on track to open in mid-November. It ranks as one of Target’s fastest rebuilds of a store ever, according to the retailer. And it has been rebuilt with a goal of creating a space “where the Lake Street community sees itself reflected — from the artwork on the walls to the products on our shelves,” said Cephas Williams Jr., group VP Target. “Today, with construction well underway, I recognize that how we rebuild is just as important — if not more so — as when we rebuild,” Williams stated. “We want the
Lake Street community to view this store as a part of itself, not just a place to shop. So we’re listening to the voices of the community and applying what we’re learning, and will continue to do so.” In response to community feedback, the rebuilt store will have an expanded food and beverage section, and an additional entry next to the light rail to give easy access to commuters. Landscaping and other touches have been added to create a more inviting atmosphere. Local GC: Reflecting the community focus, Target is rebuilding the store hand-in-hand with the people who live nearby. It has partnered with Noor Companies, a local and Black-woman-owned general contractor and developer, to lead the rebuilding efforts.
In addition, the retailer has hired diverse subcontractors to assist with the project, several of whom employ team members from the local area. It also brought in ConstructReach, a workforce development organization that introduces young diverse talent to the construction industry, to help with the project.
Mitigating COVID-19 Risks Smart building technologies can help retailers minimize exposure By James Caton America re-opened to an uncertain economic environment. Business owners were eager to get back to business, and consumers were eager to get out of the house. But apprehensions on both sides of the equation make navigating crowds and high-traffic public spaces a potentially dangerous activity. With no established roadmap for retailers to operate in the age of pandemics, it’s easy to see how one misstep can lead to onerous cleanup costs, contagion, and public flight from your business. The challenges presented by COVID-19 including required operational changes like daily deep cleaning and sanitation activities, as well as behavioral changes from the public. A mishap would involve significant financial costs including biohazard-level cleanup measures before a building returns to operational status. A Bloomberg Businessweek article estimated the costs to disinfect a facility with confirmed or potential COVID-19 exposure at about $3,000 to $4,000 per hour, or up to $10 per square foot. So how do American businesses minimize exposure to a potential COVID-19 event? In part, the answer lies in existing technologies that can be repurposed to fight COVID-19. Security Cameras Repurposing your security camera system is a simple first step for developing a COVID-19 mitigation strategy. At first glance, this may appear to be a complete upgrade, as retailers may have a mix basic and advanced camera technologies deployed across buildings. Artificial intelligence upgrades can bring advanced capabilities to even the most basic camera systems. One of the key CDC recommendations is social distancing — maintaining a minimum distance of six feet between people. Video analytics can be programmed to alert when people form small groups, violating the social distance policy. Retailers can define their own response procedures when this happens — a discreet reminder by staff to the group, or a
recorded message or other sound to remind people to disperse. Intelligent video analytics also can serve as a strategic planning tool, giving better insights into how spaces are used by the public. During the last few years, most retailers across the globe have modified store layouts to optimize revenue. Retailers will now have to reassess floor layouts to protect public health and revenue. Hot spots may indicate a need to re-plan the layout to more evenly spread out shoppers. The same activity map also can be used to develop a daily cleaning and disinfecting plan for janitorial staff. Using this strategy, facilities managers can more easily point cleaning staff to priority areas. The same approach can be used to “heat map” where the janitorial staff has actually cleaned. Did they really target the hot spot and spend more time there? Or did they do a cursory cleanup for convenience’s sake? Intelligent video analytics can be generated to meet almost any requirement. Do you need to ensure staff wear masks or other protective equipment to enter an area? Need to check that staff wash their hands for two minutes before they enter a kitchen area? Analytics can be deployed over an existing camera system. There’s no need to buy and install new sensors or wiring.
“Building controls can now save lives in addition to energy.” Building Controls Building controls can now save lives in addition to energy. For the last 20 years, building controls have primarily focused on energy savings and operational efficiencies. Building sensors measure occupancy, humidity, temperature, and airflow in
different rooms. Building automation systems (BAS) use sensor data to establish operating conditions for vents and compressors and optimize comfort while minimizing energy and equipment wear. With COVID-19 in play, facilities managers will reassess how they configure BAS in their buildings. Occupancy sensors can be used to establish new maximum occupancy in a room that once permitted 30 people, but now must limit occupancy to six people. Building managers used to prioritize air flow across rooms to ensure maximum fresh air in every room. In the winter, when COVID-19 is expected to make a resurgence, they may take the opposite approach to minimize air flow between rooms in ways that help avoid contamination. Don’t become ‘Big Brother’ One of the biggest risks in deploying intelligent video analytics is the creating the perception that your business is an all-seeing, all-knowing enforcer over staff and customers. Employees and the general public treasure personal privacy even when they know they need to adapt to support public health. As you deploy intelligent video analytics and other sensors, educate your staff and customers on what data you are collecting and for what purposes. If you need to “nudge” people to change their behavior, do it discreetly and politely. For example, if your heat map indicates that people congregate near a central spot, maybe put a large potted plant there to disperse the crowds. Just as 9/11 brought about changes in the ways we use public spaces (bag searches, more security cameras, for example), our society will adapt to COVID-19 and new social norms will develop. With some reconfiguration and rethinking, retailers already have the basic tools needed to fight COVID-19. — James Caton is the global leader for smart infrastructure and cities at SAS SEPTEMBER/OCTOBER 2020
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Spotlight on Hygiene Hand washing is only half of the hand hygiene equation By William Gagnon Understandably, a growing concern for business leaders and facility professionals is proper hand hygiene. The thorough and frequent cleaning of common areas, including public restrooms, can keep guests and employees safe and healthy. But with frequent and sometimes conflicting news stories appearing daily, knowing how to outfit your restroom and keep germs at bay can be a challenge. Social distancing and mask usage aside, recommendations from leading health organizations including the World Health Organization (WHO) and the Centers for Disease Control and Prevention (CDC) are clear, straightforward and unwavering with regard to hand hygiene. Both organizations agree that proper hand hygiene is the best defense against the spread of germs, like coronavirus. In addition, they agree that proper hand hygiene consists of thoroughly washing and completely drying hands. Given the exclusive media attention that has been given to hand washing, it may surprise some readers to know that when it comes to hand drying, both groups recommend hand dryers and paper towels equally. Specifically, the WHO recommends that everyone “frequently clean [their] hands…” and “dry [them] thoroughly by using paper towels or a warm air dryer.” The CDC reports that, “Both [clean towels or air hand dryers] are effective ways to dry hands.” These recommendations were further supported by findings of a study published in the Journal of Applied Microbiology in August 2020. The purpose of the research was to answer the two questions below. [The answers are paraphrased from the study’s conclusion and approved by the researchers.] Q: Are hand dryers more hygienic than paper towels? A: Hand dryers and paper towels were
Eliminating paper towels saves time and allows employees to focus on things that matter most in keeping a facility clean and safe. Touchless hand dryers are also greener with a complete life cycle assessment proving up to a 75% reduction in carbon footprint versus even 100% recycled paper towels. both found to be equally hygienic handdrying solutions. Q: Are paper towels safer than hand dryers relative to human infection risks? A: From a health and safety perspective, empirical data in available research studies do not support one hand-drying method over another. In the end, they found that both methods are equally hygienic and that drying is critical as wet hands are 1,000 times more susceptible to transfer or receive germs. Of the nearly 300 pieces of data considered, the study found to be the most credible was “Effects of 4 Hand-Drying Methods for Removing Bacteria from Washed Hands: A Randomized Trial,” published by the Mayo Clinic in 2000. The text of the study states “…there is no difference in bacteria counts when drying with paper towels or hand dryers.” Another study of note, conducted by Laval University, found 17 species of bacteria on unused, recycled paper towels. This means that germs like the flu virus, Bacillus or E. coli, the main cause of food poisoning, could be transferred to the hands when drying. Costs: In addition to hygiene, there are other important areas to discuss and consider when determining which drying solution is appropriate for a particular facility. For instance, the regular purchasing, shipping, stocking, and waste removal of paper towels creates unnecessary touchpoints
and significantly increase costs, labor and maintenance. In addition, reducing the number of required restroom touchpoints can likewise reduce the number of times hands are exposed to germs and the amount of time required to complete restroom cleaning. A reality of our collective “new normal” is the fact that maintenance staffs are being overwhelmed with the additional requirements and guidelines in our current situation. Eliminating paper towels saves time and allows employees to focus on things that matter most in keeping a facility clean and safe. Touchless hand dryers are also greener with a complete life cycle assessment (LCA) proving up to a 75% reduction in carbon footprint versus even 100% recycled paper towels. Most people don’t recognize that recycled paper does not mean it’s recyclable — after one use, paper towels go directly to the landfill. While hand dryers and paper towels are equal from a hygiene perspective, touchless hand dryers provide undeniable benefits over the use of paper towels. Understanding the options available and weighing the pros and cons of each will allow business leaders and facility professionals to make informed decisions. — William (Bill) Gagnon is VP of marketing and sales at Excel Dryer (exceldryer.com) whose hand dryers feature a hands-under, sensor-activated design that thoroughly dry hands in seconds. For an added level of protection, Excel offers high efficiency dryers with a HEPA filtration system that was proven to remove 99.999 percent of viruses of varying sizes from the airstream. SEPTEMBER/OCTOBER 2020
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RESTAURANT CHAIN DEPLOYS UV LIGHT, AIR PURIFICATION SYSTEM Silver Diner, a farm-to-table chain with 20 locations in Maryland, Virginia and New Jersey, is billed as the first restaurant group in the U.S. to install a customized interior air filtration and purification system designed to make dining indoors as close it can come to outdoor dining amid the pandemic. The system, designed and installed by Veteran LED, promises to eliminate 99.9% of pathogens encountered. It uses three technologies: germicidal ultraviolet-C light, bipolar ionization technology, and HEPA filtration. Air purifiers, mounted throughout each restaurant, work to continuously clean the air by using all three technologies simultaneously. The germicidal UV-C lights installed throughout the HVAC system work 24/7 to disinfect air and surfaces inside the system.
Heavy-duty handheld UV-C light sterilizers are used on high touch areas as part of the closing duties of the staff. At night, when the restaurant is closed, the interior is bathed in germicidal UV-C light to help kill pathogens in the air and sterilize surfaces. “Our goal is to make indoor dining as safe as possible to outdoor dining,” said Silver Diner group co-founder and president Robert Giaimo. “We believe this is the restaurant model of the future. It maximizes the safety of our employees and our guests.”
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WALMART’S NEW RENEWABLE ENERGY GOAL Walmart’s new sustainability commitments include a zero emissions goal across the chain’s global operations by 2040 — with no offsets. The retailer will take a number of steps to meet its zero emissions target, including harvesting enough wind, solar and other renewable energy sources to power its facilities with 100% renewable energy by 2035. Currently, Walmart powers about 29% of its operations with renewable energy, both through on-site installations such as rooftop solar panels and through agreements to add new wind and solar plants to the grid. In another 2040 target, the chain plans to transition to low-impact refrigerants for cooling and electrified equipment for heating in its stores, warehouse clubs and data and distribution centers. It also plans to electrify and zero out emissions from all of its vehicles, including long-haul trucks.
BANK INVESTS IN SAFETY WITH IMPROVED IAQ Pioneer Bank has taken a proactive approach to improving indoor air quality across its network. The Albany-based bank installed Air Knight IPG air purification systems across its 22 branch locations and headquarters. The units are able to reduce airborne viral and bacterial particles such as the novel coronavirus, according to the company. “COVID prompted the decision,” said Neil Walsh, security and facilities administration officer, Pioneer Bank. “We wanted to do everything we possibly could to not only make our customers safe, but to make our employees safe too,” Walsh noted that the systems were an investment and that the cost per unit was reasonable. But with multiple units at the bank’s headquarters and each branch location, the total price added up. “If you’re going to spend a good chunk of money, you may as well do the best you can and get the best equipment possible,” said Walsh. While Pioneer’s decision to install whole-building air purification systems was motivated by COVID-19, the decision to install the units will have long-term benefits as well. “You don’t want other particles flying around in the air or anything that might come from paint or asbestos or mold or any of those kinds of things,” Walsh said. “This will be true in a postpandemic world as well–meaning changes made now in a time of need can and will have a lasting health effect.” SEPTEMBER/OCTOBER 2020
STORE SPACES Q & A
Spotlight on Health, Security Today’s new environment has brought new concerns, with employee/customer wellness and safety now a top priority, followed by the need to protect property against forced entry or vandalism. Chain Store Age spoke with James Beale, managing partner of NGS Films + Graphics, about how his company is helping retailers in both these areas. Have your customers’ needs changed due to the pandemic? Yes, I believe their priorities have definitely shifted. We are seeing a focus on security, social distancing graphics and physical barriers among other things. What specific products does NGS offer in this regard? As it relates to COVID preparedness, we offer a catalog of wall, floor and glass decals that can be customized and quickly deployed. We also offer a variety of clear acrylic physical barriers and sneeze guards. As it relates to security, we offer turnkey installed 3M security films and attachment as well as patented access denial systems, Riot Glass, that are custom retrofitted to any storefront. How has NGS pivoted to help retailers promote social distancing and store safety? Fortunately, NGS already had the tools in our toolbox, so to speak. We have a graphics division and signage division that were easily able to pivot and offer turn-key social distancing graphics programs and sneeze guards. Our security team has been installing 3M safety film for forced entry as well as Riot Glass, which is a top tier access-denial solution that has a 100% success rate in stopping forced entry with NGS clients. It is in high demand right now. What recommendations would you make to retailers who are worried about smash-and-grab break-ins? With limited police response due to rioting and looting, the focus has shifted from buying time until the police arrive to actuCHAINSTOREAGE.COM
ally stopping intruders altogether. Current circumstances aside, we recognized years ago that there was a gap between window film performance and issues with roll down gates and thus began working to bring a new category of protection to market, a window-shield access denial system, aka Riot Glass. What exactly is it? Riot Glass provides retailers with a maximum strength security solution. It’s a patented clear shield with an anchored frame that is installed over the top of existing doors and windows. Riot Glass is a “set it and forget it” clear board-up that has never failed for any of our clients. It has been exposed to sustained attacks with sledgehammers, 200-lb. parking blocks, tire irons, etc., and has repelled all attempts to date. In most cases, it stops the glass from breaking so there is no emergency glass or repair service required, which is a huge benefit. Moving away from the pandemic and security, give us an overview of the various products/solutions NGS offers retailers. Essentially NGS offers a wide range of window film, graphics and signage products and services including in- house production, project management, nationwide installation and surveys. Energy conservation is always top-ofmind for retailers. How can NGS help retailers save energy? There are some fantastic new window film products on the market that achieve impressive heat reduction while not changing the look of the glass. In addition, these films do not contain
any metals and are therefore nonreflective and will not interfere with 5G or WiFi signals. One of these clear, high-heat rejection 3M films will reject 45% of the heat gain while allowing 70% light transmission on dual pane glass which is unprecedented and a perfect solution for retail applications. Our team also helps our clients acquire available rebates where applicable toward installation of these impressive films. We also look at creative ways to solve old problems such as glare. Traditional thought process said you “tint” a window to reduce glare and although that may be true to reduce glare it does not eliminate glare and inherently creates darker or reflective windows which is not a great retail fit. Our team looked at a brand-new technology called daylight redirecting film from 3M which is the only product that can eliminate glare and enhance natural daylighting by redirecting the light or “glare” and illuminating the ceiling up to 40+ feet into a space. This is not only great for the customer experience, it also enhances daylighting and reduces the need for artificial light thus reducing energy consumption. How does NGS stand out from its competitors? At NGS we believe in the “frictionless process.” We pride ourselves on being a one stop shop for our clients for any of their solar film, security or branding programs. We believe in delivering solutions and service that exceeds our client’s expectations and thus allow them to have peace of mind knowing they are in good hands.
ON THE LEVEL
The Mall Re-Channelers
THE BEST IN RETAIL FROM EVERY ANGLE
Mark Ghermezian, who joined his cousin Don as co-CEO of American Dream earlier this year, says people won’t understand what American Dream is until it’s fully open, an event that had been long delayed by funding and building and conceptual issues and — shortly after it happened — was interrupted by COVID-19. “What we’re doing here is not post-pandemic reaction. We’re not saying, ‘Oh let’s bring in a museum and a play area.’ We’re different here. We call each other dreammakers. We’re building the next Disney here,” Ghermezian said. While Don Ghermezian spent most of the last decade leading Triple Five’s renovation of the abandoned Xanadu project, Mark founded and ran a mobile customer engagement platform called Appboy (now Braze) that uses continuous data streaming to connect brands with consumers at the right times and through push, email, or apps. Today he’s constructing a similar engagement network in the Jersey Meadowlands. “When it comes to modern retailing, Asia is far ahead of America. Live-streaming is huge there and not so much here,” Mark said, referring to platforms such as Alibaba’s Tmall and Meipai, a fashion and beauty live-stream that provides product videos to 140 million users. Triple Five’s Mall of America recently introduced Pop Shop Live, a live-streaming platform that involved several retail tenants. Mark Ghermezian promises the medium will play an integral role in brand-building and merchandise-moving at American Dream, which re-opened on the 1st of October.
“We want to make American Dream a channel. We can create live-streaming events with Nike, Hermés, Lululemon, and we are uniquely positioned to do it,” he said. “We have a Dreamworks water park and a Nickelodeon theme park and a ski slope. And we also have an expansive retail assortment with the largest Zara’s and the largest Hermés in America.” American Dream was not the only entity engaged in retail re-channeling during the pandemic. While COVID-19 was causing industry-wide exasperation in April and May, it ignited inspiration at Dallas-based Centennial. As shutdowns stymied retail, senior executives used their spare time to re-think their customer engagement strategy and “monochannel” retail was born. “We felt we needed to make some changes to meet today’s customer where the customer wants to be met,” said Steven Levin, the founder and CEO of Centennial, which owns seven malls across the U.S., including MainPlace in California and the Fox Valley Mall in Illinois. “People are using technology, but not just at home. They’re mobile and they’re using it everywhere they go.” In September, Centennial introduced Shop Now!, a cross-portfolio program that allows people to shop its seven regional and super-regional malls the same way they shop Amazon. A third-party data company captured the inventories of all tenants and installed them within the mall websites. Shoppers can log in, search for “pink yoga pants,” and the site will display all buying options in the mall. They can continue to shop other items, make purchases and get home delivery, curbside delivery at the mall, or pick it up themselves inside the mall. The term “omnichannel” didn’t seem to fit what they had created, so Centennial executives coined “monochannel.” “Retail isn’t about brick-and-mortar versus online shopping,” Levin said. “It’s about the seamless convergence of these two channels in a way that makes sense for the consumer.”
Al Urbanski email@example.com @AlUrbanski (Twitter) SEPTEMBER/OCTOBER 2020 CHAINSTOREAGE.COM
THE BEST IN RETAIL FROM EVERY ANGLE
lifestyle grocer mixed-use development
Center Chiefs Talk Holidays and Covid-19
Christmas and the rest of the holidays will be different in 2020, because 2020 has been so different. Mall shopping was cancelled for two months in most states, then re-opened only to masked people who promised to keep certain distances from other masked people. E-commerce registered a 73% second quarter rise over 2019, according to Salesforce. This year’s store Santas will be either virtual or behind glass. To prep you for 2020’s Winter Wonder-What-We-Do-Land, we asked leading retail center owner-operators what they were thinking. By Al Urbanski
Easton Town Center in Columbus, Ohio
Steve Levin, CEO, Centennial
When the world stopped and the malls closed, we had an imposed break. The clock stopped. So we sat down and said, “What are the things we said we would do but never did because we were too busy running the malls?” For two years we had talked about a new focus on customer engagement and customer experience. So Whitney Livingston, our COO, and Colleen Heydon, our senior VP of marketing, assembled a team and launched a program that allows people to shop our malls like they shop Amazon. It’s called ShopNow! and lets you enter
an item in the search function on a mall website and call up all the options at that mall. You can have it delivered or pick it up at the mall. They put this into operation in only three or four months, something that would have been very hard to do without the imposed break. We call it ‘mono-channel.’ Physical presence combined with technology is the future. Physical retail is very much alive, but it has to meet the customers where they need to be met. Any pure-play, even Amazon, cannot be a profitable, scalable business without a physical
experience. We all have to meet that customer in the right place. It’s just that we’re coming at it as a physical experience and they’re coming at it as a digital experience. You only have to have lived the last six months to have learned the limitations of a virtual, digital world. I don’t know anyone who has said, “Boy, it’s sure been great to have 7,000 consecutive meals at my kitchen table. I can’t wait to have 7,000 more.” People want to get out. They want to dine out, they want to hear music, they want to meet their friends. Our goal is for people, SEPTEMBER/OCTOBER 2020
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when they get up on Saturday, to say, “Let’s go to MainPlace. I feel good when I’m there.”
Adam Ifshin, CEO, DLC Management
The holiday season is going to be weak, but not as weak as the naysayers say. It will be better than many expect. People still are not comfortable traveling. You can’t take your family to Cancun or go visit grandma in Florida. So they’ll spend money on their families and friends. There’s clearly pent-up demand, and the cycle is very good for gaming. Sony and Microsoft are both introducing new consoles. Of course, the final tally all depends on what retailers ordered. If they only bought 80% of what they bought last year, then they can’t do more than 80% of last year’s volume. Home goods retailers rebounded nicely as the pandemic wore on. People are staying home and spending money on their houses. We have a number of Ashley furniture stores in our centers and they had record-breaking sales in July. The off-price apparel stores did well, too, but will have a problem down the road. Department stores cancelled lots of spring and summer collections and won’t push any goods into the off-price channel. I drive our leadership to think about what opportunities we can seize. We free up human capital time and task team members to go and do big things. Apply real-time data analytics. Build things. Deepen our relationships with the tenants who are the survivors.
Stephen Congel, CEO, Pyramid Management Group
The pandemic has been tough for us. The entertainment attractions are big traffic drivers for us — especially at Destiny USA. It’s been a handicap on the traffic and the income sides. Still, traffic-wise, we were at 79% of what we had last year during September. And all of our properties are impacted by the closing of the Canadian border. Canadian guests are a huge part of our business. I agree with many in the industry that COVID-19 has accelerated a process that had already begun. Long ago we went through a period of over-building and changing consumer preferences, and yet we’ve responded with an almost glacial pace of change. Malls that shouldn’t be malls anymore should have
been tooled into something else years ago. We’re fully staffed and ready for the holiday season. Will it be up to 2019 levels? We don’t know yet. A lot of it depends on traffic-drivers like restaurants and entertainment. And the Canadian piece is very big. They close the border on a 30-day basis. But, generally, I’m optimistic. I think we’re going to get through it just fine.
Joseph Coradino, CEO, PREIT
Right now we’re averaging over 70% of our pre-COVID traffic, but we have a couple of really strong performers. Patrick Henry Mall in Newport News is at 100%. As each day and week goes by, more tenants open and more people appear comfortable to shop. But the severity of the problem varies by locale. The most difficult state that we operate in is New Jersey. They’re just moving to 25% capacity for dining, so winter is going to be tough. We’re going to do tents and heaters for restaurants. PREIT was a forerunner in moving into this new era in retail. Long ago, we replaced around 15 department stores, and little of that space was replaced by retail. We’ve done outpatient facilities and residential. One of those spaces is going to be a distribution center. Shoppers won’t even know it’s there. It will be surrounded by brick and we’ll have stores on the sidewalk in front of it. Looking back, though, the best thing we did years ago was to exit from our lower quality assets. Removing those 18 — soon to be 19 — low-performing malls from our portfolio proved to be essential to our long-term well-being. COVID was a terrible thing for this country, but as you think about the real estate business, it’s opened up possibilities that weren’t as apparent to us as before. We’re all now thinking of malls more as town centers. It’s also sped up the merging of online and bricks and mortar and soon we’ll no longer talk about them as separate things. People will shop more online but will also come to the conclusion, driven by costs of shipping, that physical retail will remain essential to them.
Don Ghermezian, Co-CEO, American Dream
When COVID hit, if you were not a savvy online shopper, you likely are by now. We have an entire generation of people shopping online who were not comfortable with it before. As
traditional malls across the country re-open, how are they going to draw customers back in? Shopping Centers must adapt to these new realities to survive. My primary job is to create an experience that drives customers for our tenants and helps them be successful. When we opened Nickelodeon Universe prior to the pandemic, we exceeded our planned capacity immediately. Our guests were spending six hours at the theme park while our plan was for them to only spend only three hours there and then go shopping. To reduce guest wait times and provide more choices in both the theme park and water park, we added $20 million in new rides and entertainment to allow more guests to be through with play-time quicker and add more shop-time to their visits. The environment for shopping is forever changed by recent events, and even Class A centers will have trouble surviving if they don’t adapt to these changes. We believe American Dream and our other centers — Mall of America and West Edmonton Mall — are designed to meet these changes. We are committed to keep pace with the change — to improve and adapt our operations on a daily basis, if need be. We are excited and driven by this every day.
Paul Kurzawa, Executive VP Operations, Unibail-Rodamco-Westfield
The number one thing that has changed during the pandemic is the consumer psychology. Wherever they go, they’re very concerned about feeling safe. So we’ve done a lot to improve safety and sanitation. We’ve dedicated a cleaning crew to do nothing but clean and sanitize all touchpoints in our centers, from door handles to elevator buttons. We didn’t have to audit ourselves, but we engaged Bureau Veritas to test and verify our protocols because we wanted to validate them and show our guests, our retailers, and our employees that we do take it very seriously. If you look to communities in Asia, people have used masks to protect each other from germs for decades, and I think that level of concern has appeared here and is going to be with us for a while. We’re optimistic about the holiday season. What we’ve seen over the last two months is steady improvement. On the East Coast and in Florida, almost all of our stores are open and traffic continues to improve. Malls are actuSEPTEMBER/OCTOBER 2020
Westfield World Trade Center in New York
ally safer than people might think. Shopping centers generally are built with significant capacities and on a given day, most don’t reach above 25% capacity, and even on a busy day, don’t reach above 50% capacity. We reviewed activity to see what our crowd capacities have been like for the past 12 to 18 months and found that, even pre-pandemic, they were up to social distancing standards. As an added option for shoppers especially concerned about the time they’ll spend at our malls during the holiday season, we created LINE PASS within the Westfield app for them to make reservations for shopping visits and avoid long waits in lines. We’ve gotten great participation from retailers signing up for that program. We also offer other services to help people feel more comfortable, like curbside pick-up, and Answers on the Spot.
Brian Jablonski redesigned it to get an extra 200 cars a day through. We have great team members. They’ve been working hard every day and making good things happen. Mary Reichardt, our VP of marketing, did amazing things with social media to keep our businesses humming. She did workshops on virtual shopping for tenants and they’re all doing it now. She also posted a job portal on the website to help tenants overcome problems they had re-staffing after the shutdowns. We’ve got this, and our tenants have got this. Retail stores here are 75% occupied and restaurants are 50% occupied. REI opened their new store here during the pandemic and they’ve done great. I believe that we’ll be back to normalcy and we’ll be fine for the holidays.
Deborah Butler, President, Butler Enterprises
When the crisis started, we developed two scenarios. The first said Easton Town Center would be back in business in July, the second had us re-opening in September. We thought July was optimistic, and then, to our surprise, we opened in May. Yet we thought that we’d be more back to normal than we are now. We had no idea of the seriousness of this. We’re back to 80% of traffic, and the re-opening of the AMC cinema had a lot to do with that.
The Butler complex in Gainesville is full of restaurants, and they’ve been busy throughout the pandemic. The Darden brands, Longhorn and Olive Garden, were amazing. They figured out how we could help our customers and help ourselves with curbside pick-up. Working with them on this, we noticed that our Zaxby’s drive-through could be more efficient and our maintenance team and our property manager CHAINSTOREAGE.COM
Yaromir Steiner, CEO Steiner + Associates
The toughest thing we’ve had to deal with was the disconnect between government requirements and actual safe practices. When we re-opened, we required masks everywhere, even on the street. The governor did the same at first, then made it optional to wear masks outside. There was a window of four to five weeks where we were stricter than the government rules, and that was hard to enforce. I don’t know how the holiday season is going to be, but Easton has always been a very festive place during the holidays and I think our biggest challenge is to do all the things we need to do to make that spirit happen while following all the rules.
Conor Flynn, CEO, Kimco Realty
I think the initial shock has mellowed to a dull roar. People have come to the realization that we’re in this for an extended period of time until a vaccine becomes available. We got a shot in the arm with added liquidity, including $2 billion in credit. We were able to help the mom-and-pop stores in our centers get signed up for the PPP program and hired law firms to help them. Six hundred of our tenants got a collective $20 million in PPP funding. So we’re sitting on a lot of dry powder and looking for acquisition opportunities to arise. None have presented themselves yet.
behaves and shops. You see coverage of New York and Los Angeles shutting down, but Middle America is shopping. We have outlets in Oklahoma City and Lincoln City and the traffic is strong. Our business is pretty much where we expected it to be in September. Outlet centers are pretty safe places to shop. We had people lined up in 100-degree heat at a Nike store, and Nike has been a great example of how to operate in the current environment. Our perspective on the holiday season is a bit different this year. We think shopping is going to start earlier and peak earlier than it has in the past, though that can vary state to state and city to city. Each state and city can have different guidelines, and communicating them to tenants and consumers are going to be operators’ biggest challenge this year.
Westfield Century City in Los Angeles
This holiday season is going to be a tricky one. I think people will be up for some retail therapy after dealing with the virus all year. They’ll be eager to spend money on family and friends. But if the winter months take us back to a bad flu season, things could be different. Traffic at our centers are back to 85 to 90 percent. Of course, all our grocery stores did well during the pandemic. The social distancing caused more problems for the TJ Maxx’s and Burlingtons. They’ve had lines around the block. But people are not browsing, they’re buying. The conversion rate for retailers is much higher. I think it bodes well even for restaurants forced to do deliveries.
Francis Greenburger, CEO, Time Equities, Inc.
I may have an unusual view because we’re based in New York and we own a lot of property here, and New York’s a world of hurt. There was major retail erosion and political problems here pre-COVID. We own properties in 30 states and internationally, and everything outside of New York is better, a lot better. We own lots of different property types, and there’s no doubt that retail has been hurt the worst by the pandemic. Multifamily held up the best, and behind that was industrial and office. Reflecting back to March and April, it was like the sky was falling. But then we started doing all the hard work we needed to do and moved forward. Our centers are open, the rent
recovery is there, people seem to be shopping. A lot of our retailers made back ground. In July and August, Bath & Body Works was up 100% over last year. Jewelry stores were up by 50% or more. There’s been a spurt in e-commerce, but where that settles remains to be seen.
David Dunn, CEO, Slate Retail REIT
The pandemic has become quite challenging. It’s tested our people and our assets, and it’s tested our revenue streams. We’re not making a judgment yet, but we’re pleased with our business, our investment strategy, and our people so far. We focus on grocery-anchored centers, so even in the darkest time, we still had 68% of our businesses open. We have a collection of mom-and-pops that had to close and our team got to 90% of them. We deferred about $1.5 million in rents to help some of them go from an uncertain place back to normalcy. COVID-19 provided us a six-month dress rehearsal on how to move grocery businesses online. Supermarkets’ percentage of online sales went from 4% to 10% overnight. So one big change this has brought upon our centers is more curbside pickup areas — where the local municipalities will allow it.
David Hinkle, Principal, The Outlet Resource Group
Press reports of things like the pandemic very often reflect the east and west coasts, and that’s not indicative of how America really
Issie Shait, Executive VP, New England Development
Obviously, this holiday season is important for every retailer. People watch the news, and between the election, the approaching flu season, and the possibility there’ll be a recurrence of COVID-19, there’s a lot of uncertainty. Inventory is going to be an issue. There’s been a ton of disruption. Closures of stores. Difficulty getting goods in from Asia — China especially. For apparel retailers and electronics retailers, it’s been tough. It’s been very hard for Best Buy, for instance, to keep its stores filled. Furniture retailers, too. People have been spending more time at home and they’re upgrading. The RH outlets and West Elm outlets can barely keep goods in stock.
DJ Busch, CFO, InvenTrust Properties
Most of our 65 centers are grocery-anchored and we were pleased with our ability to collect rent and make deals with our tenants during the initial phase of the pandemic. Now our attention is shifting to the long-term viability of our tenants and the markets we’re in. Our supermarket tenants fared very well. Their e-commerce businesses have increased and we have supported that change through access to our centers for curbside pick-up programs. Back in April we learned a lot. We made sure we provided enough common space to accommodate pick-ups without creating any bottlenecks. The issue of grocery logistics is going to become very interesting over the next couple of years. SEPTEMBER/OCTOBER 2020
TECH VIEWPOINT Cyber Monday. Start reinforcing your underlying technology now, whether by scaling up cloud capacity and/or adding backup servers. And if you haven’t already done so, start testing your e-commerce systems’ readiness for the increased traffic and holidays.
The holidays are almost here – is your enterprise ready? The past year has been a year for retail like no other, and the holidays are shaping up to provide an end of the year like no other. Amazon Prime Day has been shifted to October 13-14, just in time for holiday shoppers, and Target and Walmart plan to directly counter the sales extravaganza with their own promotions. Expect most retailers to begin their holiday deals well ahead of the traditional November time frame — if they haven’t done so already. Major retailers including Walmart, Target and Best Buy are shuttering stores Thanksgiving Day, The COVID-19 pandemic also makes it difficult for retailers to run a smoothly functioning supply chain. In the midst of all this added operational stress, many retailers are even more dependent than normal on the holidays to ensure a profitable year due to having depressed sales since March. It’s not too late to begin your holiday technology prep, and ongoing efforts can always be reviewed, modified, expanded and/or improved. Here are three technology-related areas retailers should focus on now to ensure a happy holiday season. E-commerce Although brick-and-mortar sales are showing signs of recovery as stores across the country have been reopening, e-commerce traffic and spending is still elevated and shows no signs of abating between now and January 1. And with some folks still nervous about going in stores, retailers need to be prepared for consumers who will do most (or all) of their holiday shopping digitally. This means ensuring e-commerce infrastructure is robust enough to handle heavier-thannormal traffic levels for a longer-than-normal holiday season. Spikes may also be harder to predict than normal, as COVID-19 may disrupt traditional digital shopping events such as CHAINSTOREAGE.COM
BOPIS/curbside/delivery Customers making all those e-commerce purchases need them fulfilled, when, where and how they desire. A slew of retailers added or expanded BOPIS and curbside pickup offerings during COVID-19, and now consumers expect to have these omnichannel options available every time they shop. And even the almighty Amazon had difficulty keeping up with heightened demand for fast delivery as many customers simply stayed home. Any retailer who does not currently offer reliable, resilient, same-day omnichannel fulfillment needs to stand up that capability NOW. Underpeforming or shuttered stores can be transitioned to “dark stores” that operate as hubs supporting in-person pickup and last-mile delivery of online orders. Numerous third-party platforms are available to quickly scale up same-day and/or next-day delivery capability — even for retailers starting out with little or no delivery infrastructure. Security Numerous studies indicate there has been a sharp uptick in all types of cyberfraud since the start of the pandemic. All that additional e-commerce activity is tempting for hackers — and criminals are assuredly gearing up for a busy holiday season. There are some basic steps that every retailer can take to help protect themselves and their customers against digital fraud. These include requiring several forms of information to authenticate online customer identity, tracking and potentially blocking site traffic from high-risk areas of the world (such as Eastern Europe). It also means participating in industry security groups and initiatives and ensuring all third-party partners who may have access to your network also follow rigorous security procedures. In addition, every online retailer should enlist a trusted expert to conduct a thorough cybersecurity review of their organization ASAP to detect and resolve any weak spots before the full holiday rush begins. The weather outside may get frightful, but inside your firewalls all should be cozy and bright.
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Elements of a Dark Store Strategy By Meyar Sheik In the early days of the pandemic, big-box retailers such as Walmart and Target saw an influx of customers, while others deemed non-essential suffered from reduced or halted traffic. This was one unintended consequence of limiting in-store shopping to adhere to CDC guidelines. But it also brought to light the emerging — and in some cases, smart — trend of “dark stores.” Retailers are beginning to see the value of stores that are closed to the public but that operate as distribution points, or which offer safe options for shopper-involved order fulfillment. Not only can dark stores help spread out customer touchpoints, dispersing shoppers to alternate locations to ease the burden of instore crowds. But they can also help retailers relieve strain at their central fulfillment centers, which has been an ongoing problem during the health crisis. What’s more, dark stores have allowed non-essential retailers to start connecting and interacting with customers again. At a time when retailers are working doubletime to earn a fraction of their former revenue, dark stores can offer some solace. Let’s say a retailer that previously offered only BOPIS fulfillment, for instance, was forced to close its stores when shelter-in-place rules were at their
Dark stores can also operate as fulfillment locations for curbside pickup, delivery and other contactless options that are allowed in those regions. peak. A dark store strategy would potentially allow them to keep a quarter of their stores running as dark stores, working as local distribution points rather than having to shut down all operations entirely. While there is a benefit to adopting a dark store strategy, opening and running them requires ongoing logistical planning and support. Here are some important elements to consider: Know the Local Regulations As with many retail logistics, dark stores are still subject to the local and state rules on re-opening and safety precautions. It’s not a work-around. Even if customers are not in stores, the workers inside will need to comply with established regulations and ordinances. Determine the Best Use of Dark Stores In some cases, dark stores are best used as mini distribution centers for servicing online orders, improving delivery times, or reducing strain on larger warehouses, as we see in grocery specifically. Dark stores can also operate as fulfillment locations for curbside pickup, delivery and other contactless options that are allowed in those regions. Staff Dark Stores Accordingly Depending on the use case, work out which team members will be the best fit for operating dark stores, be it curbside pickup or packing and shipping, depending on their level of training and ability to work on the fulfillment side of things.
For Curbside Pickup, Create a Customer Communication Plan When a new fulfillment option opens up, especially in a locale where customers aren’t used to going, customers need to be told and reminded of all available options. Across website, email and mobile content, it’s important for retailers to provide ample information about how the new option will work: • Provide pickup directions so shoppers know exactly where to navigate to and park; • Offer pickup windows to reduce uncertainty and manage traffic; • Explain how delivery works, such as asking for the trunk to be open when making a pickup, or to have their app ready, as in the case of Target’s drive-up option; and • Leverage your knowledge of each shopper and each store inventory to deliver personalized and relevant cross-sell offers for BOPIS or curbside (BOPAC) pickups. Create a Follow-Up Communication Plan As soon as a customer drives away, retailers have the opportunity to keep a relationship going. Don’t just thank them for their order; ask them to rate their experience, and offer them a personalized recommendation and an incentive to come again soon. Maximize Your Retail Strategy with Dark Stores Getting comfortable with dark stores will help retailers respond to future ups and downs related to COVID-19. It’s possible that reopening will continue to be a bumpy road, with future shutdowns in regions where cases go back up causing future disruptions. Additionally, as the holiday sales season approaches, a dark store strategy can help retailers further supplement their fulfillment strategy by continuing to provide an outlet for consumers to safely pickup their purchased products. To succeed, retailers will need to determine how to best utilize their dark store strategy and communicate to customers with personalized messaging that this option is available to them. — Meyar Sheik is the president and chief commerce officer at Kibo, which provides cloud commerce software and services.
TECH Q & A
Playing it Safe in the Age of COVID-19 Automation and mobile technology are crucial tools for retailers seeking to ensure they meet all the safety and hygiene protocols of the “new normal.” SafetyCulture is a global technology company offering adaptive, mobile-first solutions to help streamline operations and foster safer, high-performing workplaces. Chain Store Age recently had a conversation with Bob Butler, general manager, Americas, SafetyCulture, about how transparent, automated management and tracking of safety and hygiene practices can lead to improved satisfaction and loyalty among both customers and frontline employees.
How has COVID-19 changed retailers’ need for safety inspection and monitoring? When we think of high-risk working environments, our minds automatically go to building sites, mines and production lines. However, everywhere is high-risk in a pandemic. The rigorous safety practices employed by industries like construction and mining are now relevant to all of us, no matter what industry we operate in. Retailers must ensure strict cleaning regimens are applied to all touchpoints on the consumer shopping journey — reducing opportunities for contamination by removing touch screens and implementing safety protocols for both employees and shoppers. • One of the biggest learnings from the past few months is that traditional compliance models are ineffective in managing the pandemic in retail spaces. Businesses must democratize safety to make workplaces safer. Those with the eyes on the ground are better placed to improve and drive safety practices. Retailers coming out on top during reopening are the ones who are making safety their priority. • Retailers can enhance shopper safety and confidence with the humble checklist. Digital checklists make COVID-safe practices easy for staff to follow and repeat. What advantages does a mobile app offer in enacting and tracking safety programs? Retailers, especially those with multiple sites, can’t rely on the old methods of inefficient, infrequent, paper and pen-based compliance audits. Using an app, businesses can simplify CHAINSTOREAGE.COM
the auditing process and gain visibility and insights to help raise safety and quality standards across their organizations. An app can enable teams on the frontline to collect consistent data, standardize operations, send reports, identify failed areas and get problems resolved fast. Checklists can also help uncover issues — staff can then turn these issues into actions while creating an audit trail to keep track of everything. Recent SafetyCulture research identified that half of Americans would feel safer and trust businesses more if they made public a real-time list of cleaning and disinfecting activities. Safety is also now a value proposition for retailers. How can retailers benefit from automated analytics when assessing results of safety inspections? With automated analytics, the inspection data is captured in real-time allowing business leaders to instantly identify missed inspections and failed items so they can rapidly mitigate risks. This data serves as a valuable audit trail to demonstrate a duty of care and to prove compliance with the latest industry guidelines. Automated analytics also allow retailers to spot trends in performance to get ahead of problems. By having data housed in the one place, businesses have much greater visibility across their stores. Overall, this helps businesses build their own early warning systems to spot issues before they arise to mitigate risks where trends are spotted and even train staff on focus areas. The data becomes actionable
to make better informed decisions for better outcomes. What specific solutions and services does SafetyCulture offer to streamline safety program management for retailers?” Our experience driving safety across various industry sectors has taught us that short checklists, repeated often, can be the most effective method to drive meaningful change. We’ve digitized checklists to improve adoption and efficiency of safety practices. SafetyCulture’s iAuditor application is now the world’s largest checklist app. This year we also launched two new products. Our new issues technology allows employees of all levels to capture observations and hazards with a few taps. In a pandemic, companies need all their staff on the lookout for incidents. And SafetyCulture’s new wireless sensors allow workers to contactlessly monitor things like temperature and humidity in real-time. Many retail workers conduct manual checks of environmental conditions during shifts so this tech helps streamline this process and minimize high-touch surfaces. Our experience as a business focused on improving workplace safety is that effective behavior change requires the buy-in and support of all frontline workers. They need to be given the right tools and conditions to drive it. Retail is now firmly on the front line, and with the correct tools can emerge stronger than ever before.
TECH Q & A
Land’s End Keeps Focus on Customers Lands’ End bases its entire customer experience — across all channels — around the current needs and wants of shoppers. Chain Store Age spoke with Sarah Rasmusen, chief customer officer of the specialty apparel retailer, about the company’s highly customer-centric approach to providing an omnichannel shopping environment. Rasmusen was honored as one of Chain Store Age’s 2020 Top 10 Women in Tech.
How does Lands’ End approach mobile commerce? Our mobile conversion rate is higher than the industry average, which is a huge differentiator for us. This tells us that we have a customer who shows up and is ready to buy. We give our shoppers a terrific digital experience that ensures a smooth transaction — and thus, terrific conversion rates. It’s been a long process of trial and error to get there. When I got to Lands’ End, mobile penetration was very low compared to the broader retail industry. At the time, our mobile experience was basically a catalog forced into a desktop website, which was then stuffed down to a phone. This wasn’t a great experience for anyone — especially not our core customer. Over the last several years, we’ve made a large investment in our mobile experience, knowing that this platform is growing increasingly important to our customers. We’ve paid particularly close attention to customer experience on mobile and have leveraged our customers’ feedback to provide them with a platform that suits their needs. Now, we’re continuing to upgrade our mobile experience by increasing the speed of navigation, checkout and payment options, among others. How did Lands’ End build and evolve its seamless online shopping experience and how has this converted into sales? A lot of our success as an online retailer can be traced back to our roots as a legacy catalog company. Since we had already been taking orders via catalog for many years,
the infrastructure for order management and fulfillment of online orders was largely in place already when we launched our website in 1995 — we just needed a usable front-end for the customer. Traditional brick and mortar companies had a harder time adapting to the web, as they had to build that entire infrastructure from scratch. Over time, we’ve evolved our online shopping experience by listening to our customers and providing them with the experience that they want. A lot of this comes from our incredible troves of customer data, which are also the result of our history as a cataloger. We’ve been able to collect rich customer data for nearly 50 years, which has allowed us to keep a close pulse on our customers and has led to excellent retention and rebuy rates.
more than 50 years, and this really bleeds into everything we do — from our digital presence, to our retail stores, to our plans for continued success. We do have to be careful. As anyone in retail knows, what the customer says is not always what she does. But — by nature of my role as chief customer officer, and the teams that report to me — we have a very unique model where the voice and actions of the customer literally surround us. Customer care provides a direct voice daily; our research and customer experience teams build trial experiences and evaluate them with our customer in a virtual lab. Testing allows us to push out new features and formats weekly; and analytics helps us balance what the customer says vs. what the math supports. The days of ‘we think’ or ‘I believe’ are long behind us, by nature of the massive amounts of data, tools and teams listed above that help create innovation. It is ‘group think’ on behalf of the Lands’ End customer that rules the day and drives our success.
What type of corporate mentality does Lands’ End follow to help ensure omnichannel success? Everything we do at Lands’ End revolves around our customer. We’ve been known for our exceptional customer service for
New Partnership Lands’ End has expanded its channel presence by partnering with Kohl’s, with both digital and brick-and-mortar storefronts. As of fall 2020, Lands’ End’s entire assortment of women’s, men’s, kids, and home merchandise is available for purchase on Kohls.com. The company is directly fulfilling and shipping its merchandise as part of the collaboration. In addition, 150 Kohl’s stores feature select Lands’ End merchandise, with a particular focus on seasonal goods. In-store products will rotate seasonally beginning with outerwear in the fall, followed by swimwear in early 2021. Select Kohl’s locations will feature a Lands’ End in-store shop experience with an assortment of products for the entire family all year round.
SUPERMARKETS ARE MORE ESSENTIAL THAN EVER... ...and a key to successful retail redevelopment
Even in a disruptive pandemic, necessity-based, grocery-anchored shopping centers have proven their reliability to perform and generate sales. More than 40 years ago, Tri-Land recognized the importance and durability of this retail segment in structuring its core redevelopment strategy, which is still successful today: ▼
Acquire distressed supermarket retail locations in underserved, high-density markets
Focus on the fundamentals – market research, consumer trends, competitive forces and investment potential
Renovate and revitalize underperforming properties into dynamic proﬁt centers
Build relationships with major grocery retailers – 90 percent of Tri-Land projects are grocery-anchored
Create lasting value for consumer, tenant, investor and community stakeholders
Reach out to our acquisition, investment and leasing team to learn more about our unique redevelopment approach and investment opportunities.
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