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November/December 2021

Rebound of Physical Retail New Store Concepts Gap’s Supply Chain Overhaul


2022 The big trends impacting retail, including economic, tech innovation and physical stores

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from the editor’s desk


On the Level: A real estate column


tech viewpoint: a retail tech column


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Expert Opinion: Time for a retail reset, with a focus on sourcing, fulfillment, talent, digital capabilities and data. The resale market is booming — and there’s no end in sight.



2022 The big trends impacting retail, including economic, tech innovation and physical stores





Petco, Pacsun expand portfolios with new retail concepts.

Recap of Chain Store Age’s X/SPECS, which put the spotlight on store design, construction and facilities management — and business networking.


Three ways connected lighting can help reimagine retail.

ShopTalk: Dick’s Sporting Goods unveils its newest concept, Public Lands.

Store Spaces Q&A: Marchex’s Lee Barth discuss the evolution and transformation of call monitoring.





A special section on what retailers can expect in the coming year, with insights on brick-and-mortar, technology and the economy.

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 non-qualified in the United States: $80 one year; $155 two year; $14 single issue copy; Canada and Mexico: $105 one year; $185 two year; $16 single issue copy; Foreign: $115 one year; $215 two year; $16 single issue copy. Digital edition subscription: $55 one year digital; $105 two year digital. Periodicals postage paid at Chicago, IL and additional mailing offices. POSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, 8550 W. Bryn Mawr Ave, Suite 200, Chicago, IL 60631. Subscription changes may also be emailed to contact@chainstoreage.com, or call 1-877-687-7321. Vol. 97, No. 6, November/December 2021. Copyright ©2021 by EnsembleIQ. All rights reserved.


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The Rebound of Physical Retail Top names in retail real estate tell how the pandemic helped them re-make their relationships with their tenants and establish brick-and-mortar’s role in the omnichannel future. THE LEADERSHIP SERIES 30 Joseph Coradino on the mall’s future 32 A.T. Toroyan on partnership 33 Brandon Isner on retail’s beckoning future 34 Kim Brewer on reshaping properties for a new era 36 Adam Ifshin on seizing opportunities with teamwork 38 Stephen J. Congel on post-pandemic consumers

Gap Inc. in five-year plan to build out its fulfillment capacity.


How to be a supply chain leader.


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Top Picks It’s been quite a year. And as it winds down, I continue to marvel at the resilience of the retail industry amid so much disruption and uncertainty. The big story, at least for me, has been the rebound of physical retail. Certain brickand-mortar sectors took a real hit in 2020. But the story this year has been far more positive, with many more (nearly double) store openings than closings. But it’s more than just numbers. More than anything else, I’m encouraged by the innovation of retailers, particularly when it comes to their brick-and-mortar assets. From shop-in-store partnerships to spin-off formats to entirely new concepts, retailers reached out to engage customers in fresh and exciting ways. Here are my picks for some of the most interesting store developments of the past year. (For two more, see page 18 of this issue.) • Dick’s Sporting Goods: The nation’s largest sporting goods retailer ran fast in 2021, adding soccer shops to namesake locations, giving high-tech updates to Golf Galaxy stores and opening clearance outlets. It also found the time to debut two totally new concepts. The first, Dick’s House of Sport, is an experientialand service-driven destination complete with high-tech batting cages, rock climbing wall, racket stringing, bike repair and more. The second, Public Lands, is an outdoorfocused concept with a big conservation component: One percent of all sales go back into local and national conservation efforts. Along with a gear repair and rental department, there are specialized shops dedicated to of outdoor activities, from biking to paddling to skiing. • Old Navy: In a move applauded by legions of women, the apparel retailer is transforming its fleet of more than 1,200 stores and online shops into fully size-integrated shopping experiences. All women’s


styles are being merchandised together, with no special sections for extended sizes. And mannequins will span a range of sizes, including 18. It’s all part of Old Navy’s “Bodequality” initiative, that includes offering all women’s fashions, in every size, with no price difference. • Bloomie’s: Bloomindale’s new small store concept offers a highly curated — and frequently updated — assortment of fashion brands, tech-enabled stylists (who make house calls) and an array of convenient services, including alterations and personalization. • Target, Kohl’s: Both made deep dives into the lucrative beauty category through partnerships with giants in the sector. Target opened its first round of in-store Ulta Beauty shops in August, with plans to expand to 800 locations during the next few years. Also in August, Kohl’s rstarted opening in-store Sephora shops. It plans to expand the shops into at least 850 Kohl’s stores by 2023. • Canada Goose: The Canadian outerwear brand has perfected the art of the immersive retail experience, outfitting its stores with “cold rooms” where customers can test jackets. Its new store at South Coast Plaza, Costa Mesa, Calif., features the next-gen version of the concept: a “snow room” that features a daily snowstorm with temperatures reaching as low as -10°F. • Madewell: What was old was new again at “A Circular Store,” a one-ofkind, temporary store in Brooklyn from Madewell and online resale platform ThredUp. Stocked with hundreds of preworn Madewell items sourced from ThredUP, the store was a physical embodiment of one of the hottest trends in retail: resale. • Harry Potter: The long-delayed Harry Potter flagship in New York City offers an immersive experience, with 15 different themed areas. More than 1,000 props are on display, including authentic items used in the movies. Photo opps and digital technology are integrated throughout the three-floor, 21,000-sq.-ft. store.

Marianne Wilson mwilson@chainstoreage.com



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COVER STORY: Retail 2022

Brick-and-Mortar: The Omni Tango

The future of physical retail is intrinsically tied to how well retail brands can lead — and follow — their customers. By Connie Gentry


ut on your dancing shoes — 2022 looks to be the year that retailers and consumers are finally in step to optimize the omni experience. All the fancy footwork retailers implemented across the pandemic have produced an array of positive and aspirational outcomes for retail operations. It starts with a clear understanding that neither retailer nor consumer leads every move, neither digital nor brickand-mortar stands alone. Instead, these are prodigiously choreographed partnerships. “This idea that the consumer is always making a choice between two things is a false narrative,” said Ethan Chernofsky, VP of marketing at Placer AI. “Brick-and- mortar and online can live side by side — it’s not always either. Consumers want varied experiences: They will have Netflix and still go to movies. People can buy a Peloton and still want a gym membership.” What’s ahead for brick-and-mortar retail, most experts agree, is a reinvention of all the consumer touchpoints and the physical space to drive engagement, produce efficiency and create flexibility.

Permanent Trends Work from home (WFH) and “buy online, pickup in store” (BOPIS) — gained new momentum in 2020 and will continue to define brick-and-mortar spaces in 2022 and beyond. 8

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Lee Peterson, executive VP, thought leadership and marketing at WD Partners, cited the firm’s recent research where half of the 2,700 consumers surveyed said they will continue to WFH at least 60% of the time in 2022. And 100% said they will not go back five days a week at any time. WD Partners also asked consumers, “When you go to a store, where will it be?” The response was close to home: 37% said they want to shop in their local community. As for what kind of stores respondents want in their community, the No. 1 answer was retailers selling local, but a close No. 2 was big brands with smaller stores. “Retailers are rethinking their real estate and one thing we’re going to see play out in 2022 is these 15-minute cities, where everything consumers want is in their local neighborhoods,” Peterson said. “Restaurants figured that out a long time ago, which is why there are quick-service restaurants on every corner. We’ll see more of that with big retail brands.” Similarly, BOPIS is going to impact real estate reinvention and speed to service is key. “Retailers are figuring out how to get product to their customer in the fastest way at the lowest cost,” said Alexa Driansky senior VP in the retail practice at AlixPartners. “As they leverage stores for fulfillment, expect a massive redesign of stores: back of house set up to fulfill orders; front of house redesigned

with different customer touchpoints for pickup and kiosks for returns.” What it boils down to, she added, is agility, or the measure of a retailer’s ability to understand and respond to consumers’ changing needs. Experts agree, saying the key to retailer responsiveness is dancing the fine line between omni presence and market customization. “The role of the store is extremely critical but there is not a one-sized plan for all,” said Rob Harrold, managing director at Deloitte Consulting. “Retailers must define the strategic purpose of each location — one store may have higher pickup, another can be more of an experiential destination. They should look at the store’s role in its market.”

The People Paradigm Speculation around applications for artificial intelligence (AI) and enhanced user experiences (UX) abound. But just as online is here to augment not replace brick-and- mortar, technology will continue to elevate interactions but not eliminate human influences. Expect a new focus on employees. “We know from our recent consumer research that employees have the most impact on the consumer’s brand experience, more than any other experience attribute,” said Emily Albright Miller, senior VP, Strategy, at Big Red Rooster, a JLL company. “But the labor shortage is causing devastating



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effects on service and consumer brand perception. What we see in this current dynamic is a paradigm shift, with retailers empowering employees in new ways. We anticipate that, in 2022, brands will invest in ways to appeal to the employee.” Miller added that the future design of stores will be more holistic and factor in the experiential needs of employees, not just customers. The new era of retail starts with creating a more predictable and flexible operating model for employees. “We haven’t rethought the operating model in some time, now it’s time,” says Rod Sides, vice chairman, Deloitte LLP, and U.S. retail, wholesale and distribution leader. “For the last decade, stores have operated on a 70:30 ratio of part-time to full-time. People have to be able to live and plan their lives, retailers need a more predictable model for scheduling employees.” Instead of expecting fewer employees to perform more work, retailers may outsource more of their store-level fulfillment. Sides anticipates that real estate operators will use excess real estate to staff a central receiving and shipping area that serves multiple tenants. “This allows retailers to operate stores with smaller teams,” he said. “We haven’t taken tasks out of the store in the last 20 years. If anything, we’ve added tasks. The time has come to rethink the dynamics of who does what.”

Goodbye Sacred Cow As retailers rethink their operating models and strive to squeeze higher profits from shrinking margins, it’s also time to reinvent how brick-and-mortar success is evaluated. Sales per square foot, the industry’s sacrosanct barometer for physical stores, has become an “antiquated measure of productivity,” according to AlixPartners’ Driansky. “The KPIs we should look at are the costs and benefits that lead to omni economic value,” she said. “Retailers need to understand and quantify all of the incremental metrics impacting the store performance.” Some of the incremental metrics that need to be quantified and counted include sales from expedient omni fulfillment, which speaks to efficiency as well as engenders customer loyalty; net sales that occur when customers return a digital purchase to the store and make an additional purchase; and the gross margin impact of store-level returns from online purchases, including the cost of markdowns and labor to process. The Achilles heel of the omni business model is enterprise wide visibility choreographed with store-level accuracy. “The trick with BOPIS is having the technology in place so the processes line up with the store staffing,” said Keith Jelinek, managing director in the retail performance improvement practice at Berkeley Research Group. “It’s bad to sell online and then keep the customer waiting when they come, but the worst thing is to transact something online that is out of stock.” Echoing similar advice from other experts, he suggested that the solution is a more flexible supply chain with retailers utilizing micro fulfillment centers that position product closer to demand, whether they use a dark store, leased space or outsource. “When retailers ship to stores once a week, inventory bleeds out,” he said. “What the stores want is to flow inventory to stores in smaller increments that is more responsive. It’s an opportunity to improve full-price selling and reduce markdowns, even if there are higher transportation costs because of more frequent shipments, they make it up in full-price selling.”

Five Essential Moves for 2022 Own the Calendar Placer.ai’s Ethan Chernofsky predicts 2022 will bring more random holidays as retailers take charge of dates and destiny. “Retailers find tremendous success in owned holidays, and it puts them less at the mercy of seasonality,” he said. “Starbucks is one of the smartest companies in any context, but they’re really good at owning the calendar — like their free red cup day.” Similarly, Target has owned random dates with its promotional Deal Days on a Monday and Tuesday in October. Celebrate Community A brick-and-mortar store has to reflect the demographics of the community it serves. It starts with store associates who reflect the diversity of the market and should also include visual aids and signage. Discover Vintage The potential for brick-and-mortar stores to leverage resale merchandise is huge. “Vintage works better in a physical store than online,” said WD Partners’ Lee Peterson, who said that resale stands to increase store traffic. The re-use component also speaks to environmentally conscious consumers and plays particularly well with Gen Z shoppers. Share Your Story Retailers need to create a compelling display and a story that clearly articulates “why this product and why now,” said Helen Herrick, studio director at MBH Architects. “It’s all about the story behind the store and the product,” she said. “Gen Z is especially aware of the entire impact of everything. The display platform, the light fixtures, the bag – it all has to look amazing. But there has to be a balance of aesthetic and story.” Provide Premium Experiences From curbside pickup to dressing rooms, every customer interaction needs to be purposeful and personal. That’s the advice from Nelson Worldwide’s Meredith Seeds, design director, and Emily Hamilton, VP, brand strategy and marketing. If BOPIS or curbside is the only interaction with the consumer, Seeds suggested taking a concierge approach. “Make it feel like a premium experience, make it special,” she said. The fitting rooms at apparel specialty retailer Reformation is their pick for a retail experience done right. Music, lighting, temperature – all the sensory elements are tailored to the shopper’s personal preferences. “Reformation has a minimalistic design and puts the shopper in control,” Hamilton said. “The experience is all about well-being, providing a calming environment, and having the associates do the legwork for the customer.”

— Connie Gentry is a business writer based in Raleigh-Durham, N.C. CHAINSTOREAGE.COM

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COVER STORY: Retail 2022

Retail Tech Outlook Retail technology is evolving in ways that will have a major impact on the industry in the new year.


By Dan Berthiaume


he year 2021 was one of slow, uneven improvement from the pandemicscarred 2020. Retailers focused on speed and efficiency in every part of the enterprise to overcome supply chain disruptions, labor shortages and increased customer demand for omnichannel services. As retailers operate in what should be a gradually improving business and consumer landscape in 2022, they will continue to leverage three technologies that proved highly beneficial in 2021: robots, frictionless checkout and ultrafast delivery. Here is a look at how these technologies can help companies in every part of their enterprise in 2022 — and beyond.

Rise of the Robots Robotic technology is popping up in every facet of retailing. Robots are rapidly becoming a mainstream feature of retail operations. While they have long been used in distribution centers, robots are now also routinely seen in stores. The following are two examples of ongoing robotic automation projects in retail that give a good picture of where the technology

Decathlon is using automated aisle-scanning robots.

trend is heading in 2022. France’s Decathlon, the world’s largest sporting goods retailer, is utilizing Simbe Robotics’ autonomous shelf-scanning “Tally” robots in its U.S. operations. The robot roam the aisles at Decathlon leverages RFID and computer vision technology to capture, report, and analyze the quantity and location of store inventory. The automation solution also allows Decathlon’s in-store team to focus on customer service and delivering a great store experience. The Tally device, also utilized by grocers such as Schnucks Market, Hy-Vee and Save Mart, traverses store aisles and autonomously captures on-shelf data including inventory position, misplaced products, and merchandise and inventory layout optimization. Meanwhile, discount giant Walmart is partnering with Symbotic to optimize an automated technology solution that sorts, stores, retrieves and packs freight onto pallets in its Brooksville, Fla., distribution center. Under Walmart’s existing system, product arrives at one of its regional distribution centers and is either cross-docked or warehoused, while being moved or stored manually. When it’s time for the product to go to a store, a 53-foot trailer is manually packed for transit. After the truck arrives at a store, associates unload it manually and place the items in the appropriate places. A complex algorithm determines how to store cases like puzzle pieces using high-speed mobile robots that operate with a precision that speeds the intake process and increases the accuracy of freight being


stored for future orders. By using dense modular storage, the Symbiotic solution also expands building capacity. In addition, by using palletizing robotics to organize and optimize freight, the solution creates custom store- and aisle-ready pallets. Walmart expects to save time, limit out-ofstocks and increase the speed of stocking and unloading. This rollout follows tests of similar automated warehouse solutions at a Walmart consolidation center in Colton, Calif., and a perishable grocery distribution center in Shafter, Calif. Eventually, Walmart plans to implement the technology in 25 of its 42 RDCs.

Checkout — Minus the Friction Many convenience retailers have piloted cashierless stores since Amazon pioneered the format with its Amazon Go store model in January 2018. Circle K, for example, is now offering an artificial intelligence (AI)based, fully checkout-free shopping experience in a Tempe, Ariz., store. The convenience retailer, which is owned by Alimentation Couche-Tard, is partnering with retail computer vision platform provider Standard AI to open its retrofitted Tempe location, featuring a frictionless checkout system designed to allow shoppers to completely avoid waiting in a checkout line and deliver accurate receipts in minutes. Circle K worked with Standard AI to retrofit the Tempe location without ceasing store operations or altering its layout. The retailer was able to integrate the Standard AI computer vision platform fully with its store’s retail operations, including inventory management and visual merchandising systems. Using AI-powered cameras mounted at strategic locations throughout the store, the Standard AI system identifies the products


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COVER STORY: Retail 2022

stores in California, starting with two Bay Area locations. Leveraging the AiFi solution, Loop Neighborhood provides customers the option to check out with a cashier or scan their LoopAutoCheckout QR code upon entering the store so they can purchase items without waiting in line.

How Fast is Your ‘Fast’ Delivery?

Circle K is moving ahead with its frictionless shopping program.

shoppers pick up and automatically records the purchases on the Circle K mobile app, eliminating time spent at traditional checkout areas. In addition, the new autonomous checkout system frees up associates to devote more time to customer service and store management. The Standard AI platform is designed to work without ever using facial recognition, which helps protect customer privacy. “We are continually exploring ways to introduce technology that empowers our teams and shows our commitment to be a leader in retail innovation,” said Deborah Hall Lefevre, Couche-Tard CTO. “In Montreal, we built and opened our first frictionless location. In Arizona, we are going the next step by retrofitting existing stores with autonomous self-checkout systems to gain further insights into how frictionless technology can both make it easy and save time for our customers and allow our team members to focus on delivering a great experience. At all times, the privacy of our customers’ data is our highest priority.” In another recent frictionless checkout implementation, Fremont, Calif.-based convenience store retailer Loop Neighborhood is expanding an existing partnership with autonomous shopping platform provider AiFi to introduce the vendor’s computer vision, camera-only platform to its existing 12

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“On-demand’ delivery is starting to be measured in minutes rather than hours. European fast delivery startup Gorillas, which fulfills online grocery orders in 10 minutes or less, made its U.S. debut Brooklyn earlier this year. Days after Gorillas started U.S. operations in Brooklyn, Jokr, another new 15-minute delivery platform, launched in select areas of New York City. Founded by a New York-based team of former Walmart, Uber, Delivery Hero, and Softbank executives, Jokr promises to deliver mobile and online orders to its customers within 15 minutes or less via bicycle. And in September, a 15-minute, bicycle-based delivery service called Buyk commenced operations in Manhattan. Buyk’s founders previously started and ran European ultrafast delivery service Samokat. And Philadelphia-based Gopuff, which provides speedy delivery (in as little as minutes) of immediate everyday needs, has been expanding on the West Coast. While ultrafast delivery services that fulfill orders in less than 15 minutes are nothing new, they have mostly been offered on a highly localized basis by smaller platforms. Gorillas, Gopuff, Jokr, Buyk, and other, similar services represent a new step in the evolution of ultrafast delivery. One reason why ultrafast delivery is poised to become a mainstream omnichannel commerce offering is the continuing evolution of “micro-fulfillment” as a mainstream back-end technology. Primarily found in the grocery and CPG verticals, micro-fulfillment uses small-scale warehouse facilities located in urban areas to operate same- or next-day

delivery order fulfillment. “Micro-fulfillment centers allow for highdensity product storage and use shuttle systems or other forms of material handling automation to put away and retrieve products for consumer orders at high speed,” Tom Enright, VP and analyst with Gartner, told Chain Store Age. “The model is a goods-to-person style of automation and robotics, where the human stays in one place and automation delivers the goods to be picked to them.” Gorillas provides on-demand grocery delivery via bicycle in 10 minutes or less. To meet this deadline, the company operates various micro-fulfillment-equipped warehouses in each neighborhood it serves. Meanwhile, Gopuff operates more than 200 micro-fulfillment centers servicing over 500 U.S. cities. Jokr relies on a network of strategic microfulfillment hubs in and around the cities it operates in, and Buyk utilizes carefully located “dark stores” that rely on microfulfillment to quickly fill orders. In addition, the growth of ultrafast delivery has been spurred by the ability to provide delivery services via mobile app. While many customers use desktop sites to place Jokr is one of many on-demand orders, ultrafast delivery services which will be mobile apps provide a expanding in 2022. streamlined shopping and payment experience that lends itself to the immediate nature of ultrafast delivery. For example, Gorillas provides a mobile shopping experience designed to mirror a trip to the supermarket, with in-app “aisles” organized how they would be in physical aisles for easier browsing. And on the fulfillment end, equipping delivery personnel with apps that instantly notify them of customer orders and simplify the picking and packing process helps minimize the time lapse between purchase and fulfillment. NOVEMBER/DECEMBER 2021


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COVER STORY: Retail 2022

Retail Economic Forcast Core retail sales likely to be outpaced by service sector growth By Phillip M. Perry


s retailers head into 2022, they are likely to face a more challenging operating environment than they did during the past 12 months. After a year in which pandemic-sequestered consumers spent heavily on merchandise for the home, they are now expected to shift a greater portion of their disposable income to restaurants, travel and live entertainment — activities that many consumers stayed away from due to COVID-19. “Our 2022 forecast is for a 4.5% increase in core retail sales,” said Scott Hoyt, senior director of consumer economics for Moody’s Analytics. “That represents a historically average growth rate. Service spending, in contrast, is expected to grow by 9.4%.”

Robust Economy

Moody’s Analytics. While that pace is a bit less aggressive than the 5.8% of the past 12 months, it remains decidedly sunnier than the 3.4% pandemic-fueled decline of 2020. Certain portions of the economy should enjoy healthy gains that will stimulate aggressive shopping activity by consumers. Moody’s Analytics expects corporate profits to increase by some 4% — an enviable performance over difficult 2021 comparisons, when profits spiked 36%. Aggressive hiring is improving the nation’s employment level, a key driver of consumer sentiment and retail sales. Unemployment is expected to be as low as 4.6% when 2021 figures are finally tallied. It should decline to 3.5% by the end of 2022, a level not far from the “full employment” conditions of the pre-pandemic economy. A tight labor market is likely to spark wage hikes that put money in shoppers’ wallets and drive positive consumer sentiment.

While the 2022 retail sales forecast represents a considerable drop from the 16.2% spike expected when the previous year’s numbers are finally tallied, it is also fairly robust given the difficult year-to-year comparison. Threatening Clouds Helping to generate sales will be strong tailHeadwinds, of course, are inevitable. The winds of growing employment, rising wages, coming 12 months will have their own a booming housing sector, and agtroubling mix: The peekaboo pangressive corporate investment. demic. Labor shortages. China “The nation is in the tariffs. Nascent inflation. An The coming midst of an early unsettled consumer. And 12 months will have economic recovery crippled supply chains after the body blow their own troubling mix: whose problems of COVID-19,” said The peekaboo pandemic. will not be easily or Bernard Yaros Jr., quickly resolved. Labor shortages. China assistant director Yet economists do tariffs. Nascent inflation. and economist at not expect the negaMoody’s Analytics. tives to prevail. An unsettled consumer. “Though growth will “While the Delta And crippled supply decelerate in 2022 due variant is continuchains to fading effects from ing to do some damage, business re-openings and we expect this wave of the past fiscal stimulus, the economy pandemic to soon subside and will remain robust.” for any future waves to be successively less The numbers tell the tale. Real GDP should disruptive,” said Yaros. “Labor and goods grow at a 4.3% rate in 2022, according to shortages will ease as the domestic and global 14

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economies increasingly learn how to live in a new pandemic normal.” Economists suggest watching a number of leading indicators in the early months of 2022 for an idea of how the year will go. The first is the state of consumer confidence — a vital driver of cash register activity. How the public reacts to the shape-shifting virus should become more apparent during the early months of the year. A second key indicator: the currency’s purchasing power. “Inflation will be the financial statistic to follow early in the year,” said Yaros. Moody’s Analytics calls for the Core PCE Price Index to moderate to 2.2% in the fourth quarter of 2022 as the effects of past fiscal stimulus fade away. One nonfinancial topic, howeber, may be “The damage done by the Delta variant has taught us that the pandemic is still alive and has the potential to disrupt economic activity,” said Hoyt. “Early in 2022 the leading data will be about COVID-19. What are the trends in vaccination rates? Infections? Hospitalizations? ” Favorable answers will bode well for robust retail sales in 2022. — Phillip M. Perry is a New York-based business writer.



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Post-Holiday Outlook:

Time for a retail reset By Jill Standish, Accenture

With the holidays almost upon us, brands and retailers will be hoping both demand and supply hold up as the world continues to manage the effects of the pandemic. The positive news is that Accenture’s latest Annual Holiday Shopping Survey finds that seven in ten U.S. shoppers are planning to spend as much or more than they did last year. But what about after the holidays? Our research shows that over two in five consumers say the pandemic has changed everything for them and they’ll look differently at their spending as a result. Inevitably, that has implications for shopping habits and purchasing decisions. So what should retailers expect from consumers over the next year? Prudence & Pampering There’s no doubt there’s a degree of financial caution out there right now. Our survey found the biggest priority for the next year is paying down debt. Saving for retirement and household budgeting also rank highly. But 2022 will not be all about prudence and fixing personal finances. It’s also evident there’s a sense of excitement among consumers about the possibilities for indulgence. Consider clothing and cosmetics. Almost half of those surveyed (48%) said buying new clothes to look and feel good is part of their spending plans for next year. And two in five said the same about cosmetics and personal products. The desire for a little post-pandemic pampering is evident across many different segments: home goods and furniture (38%), eating out and socializing (45%) and treating oneself and others to indulgent food and drink (47%). Responsibility Front of Mind Retailers can take the positives from these indicators. But they also need to recognize what else is on shoppers’ lists of expectations. It’s clear that consumers are refocusing on CHAINSTOREAGE.COM

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sustainable, healthy and local shopping. Almost three in five told Accenture they plan to use local and/or independent retailers during the next year. And nearly as many (55%) said they’ll buy more locally sourced products. Similarly, around half of consumers said they’ll be buying more healthy items. And significant numbers will be looking for reusable/refillable packaging (41%) and greener deliveries and packing (35%). Related to this, re-commerce is another resurgent trend. Over a third of shoppers (37%) say they’ll buy pre-owned or vintage apparel in 2022. And smaller but still significant numbers will buy second-hand electronics (31%) and homewares (29%).

There are five areas that should be addressed: sourcing, fulfilment, talent, digital capabilities and data. Reset for New World To capitalize on these opportunities, retailers and brands need to reset their organizations for the new world they now find themselves in. But what does that mean in practice? There are five areas that should be addressed: sourcing, fulfillment, talent, digital capabilities and data. In sourcing, for example, nearly every retailer has taken extra measures to strengthen supply chains for the holiday season. But the reality is that both sourcing and fulfillment need a more fundamental reset for the post-pandemic world — one that addresses sustainability, ethical practices and transparency as well as supply chain resilience and last-mile fulfillment. Similarly, talent is a really pressing issue for retail right now. Many companies are

struggling to fill positions that are open today. At the same time, they’re having to think about the skills and roles they need tomorrow as the retail workplace becomes more digitally enabled, data-driven and automated. With these challenges in mind, retailers told Accenture that they are taking a different approach to recruitment this year. Nearly half said they have altered or enhanced hiring processes to onboard new recruits faster, 38% said they have altered or enhanced training processes to make it faster and easier for recruits to become work-ready and 34% said they are changing role descriptions to target and attract different types of candidates. Talent strategies will also likely need a reset for the years ahead. What about data and digital capabilities? Most brands and retailers already recognize how fundamental these are. But many are still struggling to scale up their plans into tangible business outcomes. Consequently, this is another area that needs a reset if they’re to be able to deliver capabilities like channel-less shopping, hyper-personalization, and intelligent and granular consumer insights. It seems highly likely that 2022 will see a return to some of the behaviors that haven’t been possible over the past year — in the way people work, socialize and shop. But for retailers it’s not as simple as going back to the way things were. There’s no doubt the pandemic has accelerated digital shopping behaviors. And these aren’t going away. The challenge for retail is to tap into changing habits and reset their businesses in a responsible way. So, it’s not a return to normal in 2022. It’s a chance to create something new, something more profitable — and something more closely aligned with consumer needs in the post-pandemic world. — Jill Standish is senior managing director and global retail industry lead at Accenture.



11/11/21 2:42 PM



Resale Is Booming Multiple factors driving growth of secondhand market – with no end in sight By Dan Berthiaume There are multiple factors driving resale growth — and they will extend into 2022, according to one of the nation’s leading retail experts. Neil Saunders, managing director of research firm GlobalData, discussed the latest trends in the U.S. secondhand market with Chain Store Age. He discussed resale in context of Mercari’s first-ever “Reuse Report” (see sidebar), which details the growth of the resale economy and forecasts that by 2030, American consumers will spend $353.9 billion on secondhand items. This represents 153.5% growth over 2020, which is 3.2 times that of the 36.7% growth anticipated for the retail sector. “There is not one factor driving resale growth,” said Saunders. “There are a lot of factors. One is value for money. Resale allows consumers to buy products much more cheaply, especially branded items. They can find things they can’t find elsewhere, with the ‘treasure hunt’ experience they get from offprice retailers. People like to explore, and resale also leads to a lot of impulse purchases.” According to Saunders, online resale enables shoppers to have the experience of searching for unexpected, valuable items without having to visit a physical secondhand store. Saunders also said resale satisfies the growing consumer desire for sustainability in the products they buy. “Consumers are considering the environment,” he explained. “They like circular e-commerce. It also lets them sell and get rid of their own unneeded items. It’s a nice ecosystem.” Supply Chain: Ongoing disruptions in the global supply chain are also driving increased customer interest in purchasing products on the resale market, especially as the holidays approach, according to Saunders. “There are significant delays in the supply chain, and consumers are concerned they won’t be able to get what they want for the holidays,” he said. With resale, products don’t have to be shipped from overseas. They’re

already manufactured. I’ve never seen the supply chain be such an issue ever before.” Saunders cited Mercari data which indicated close to 20 million U.S. consumers will spend roughly $7 billion during the 2021 holiday season due to supply chain concerns. “These sales will be cannibalized from traditional retailers,” he noted. “Will retailers notice? No, because the whole market is going up. But it’s something to celebrate. The whole retail market is growing, but resale is growing faster.” Beyond the holidays, Saunders sees a confluence of factors coming together to produce another strong year for resale in 2022. The Mercari Reuse Report predicts that resale retail will grow 11.7% year-overyear in 2022, compared to 2.5% annual growth in traditional retail. “The supply chain will drive more money into the resale market, as will consumers tightening their finances,” Saunders said. “With inflation, prices will go up tremendously on essentials like gasoline and heating, which will create more compression on disposable income. Also, customers receive enjoyment shopping secondhand platforms, all of which will make 2022 a good year for resale.” During the past year, a host of mainstream retailers — from Neiman Marcus to J.C. Penney to, most recently, Ikea — have entered the resale space in some fashion. Saunders believes the growing success of resale will draw more retailers into the space. Traditional retailers that want to enter the resale market should consider partnering with an established third-party platform that can provide them the necessary infrastructure and other support to succeed, Saunders advised. “Everyone wants a slice of the resale pie,” he added. “But it’s a complicated business. You need the appropriate logistics and the platform. Selling in the secondhand


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On the heels of a successful pilot, Ikea recently rolled out its furniture buy-back and resale program at 33 U.S. stores.

market and sorting what is available at scale is complex. The demand is there, but you may not have the supply. Retailers will struggle with limited supplies.”

Fast Facts The U.S. secondhand market is expected to generate $160.1 billion in revenue this year, up 14.6% from the $139.6 billion spent last year, according to Mercari’s first-ever “Reuse Report.” Other eye-catching statistics from the report include: • During the past 12 months, 74.9% of American adults polled bought at least one secondhand item — equating to 196.6 million people participating in the reuse economy. • Nearly 52% of sellers resell items as a side hustle to make some cash, and 12.3% say selling used items is now their primary income stream. • American households are currently sitting on an estimated $580 billion worth of products they’re no longer using (the equivalent of $4,517 per household). In volume terms this equates to 23.6 billion items (184 items per household). • Last year, some 1.6 billion functional, saleable items were thrown into the trash.



S f t i a



11/11/21 2:44 PM



MARCH 20-22, 2022

Gaylord Texan Resort & Convention Center | Grapevine, TX SPECS is the premiere event for store planning and facilities professionals that brings together leaders from the nation’s top retailers and suppliers to learn, share ideas, develop business partnerships and solve problems across the physical retail space.

Learn more at www.SPECSshow.com

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Exclusively produced by:


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New Concepts Petco, Pacsun spin-off new formats By Marianne Wilson

Reddy Petco Health and Wellness Company has opened its first-ever store devoted to (and named after) one of its exclusive brands. Reddy is dedicated to Petco’s premium brand for dogs. Located in Manhattan’s Soho district, the store has an urban boutique feel, with an industrial design enhanced Petco’s new Reddy store format, dedicated to the company’s premium brand for dogs, features an array of custom services.

by the brand’s signature bold color palette, patterns and textures. In addition to a broad assortment of Reddy merchandise across apparel, accessories and supplies, the store provides several interactive experiences and amenities, including: • A fitting station where customers can get “the perfect look and fit” for their pet, as well as custom services such as personalized pet tags and on-site product monogramming; • Complimentary amenities for pets, including water stations, a “treatery” and whipped cream cups for pups; • A “JustFoodForDogs” fresh nutrition station offering a range of high-quality dog foods and treats formulated to meet specific, critical nutritional needs, as well as a variety of supplements to help boost pets’ health; and • Instagram-ready walls, a “Bark Board” for community updates and a pet photo wall. Other features include a lounge area with free Wi-Fi and, in the coming months, an “adventure concierge” for customers to plan activities with their pets, along with a calendar of recommended monthly activities in and around the city. Pacsun Kids Pacsun is reaching out to a new audience with a freestanding retail concept exclusively for kids. Pacsun Kids — a new Pacsun brand — made its retail debut at Mall of America,


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It’s been a good year for store openings. The pandemic year of 2020 took a heavy toll on physical retail, with the number of closings far outpacing openings. But so far this year (as of late October), store opening announcements have been nearly double that of store closures. Many of this year’s openings have come from retailers known for their aggressive expansion, including Five Below, Dollar General and Dollar Tree. And a good number have come from digitally native brands such as Allbirds, Warby Parker and Vuori, all which have ambitious plans to grow their physical footprints. Others are spin-offs from well-established retailers that are expanding their brick-andmortar footprint by opening spaces dedicated to a specific line or sub-brand. Here’s a look at two of them.

Pacsun Kids make its retail debut at Mall of America. More stores are on tap for 2022.

Bloomington, Minn. (The space is connected to the retailer’s main store.) The line, introduced in July, is designed entirely without gender and features clothing in an age range from 4- to 14-years-old. Looking to 2022, Pacsun plans to open an additional 5 Pacsun Kids stores. With a California-inspired palette of light woods and colorful graphics, the 1,435-sq.-ft. Pacsun Kids store has no specific “girl or boy” styles or fits. The merchandise assortment ranges from graphic tees and fleece sweats to outerwear and bottoms of every type. The clothing has been created with a heavy emphasis on sustainability, self-expression and comfortable fabrics that kids actually want to wear, according to Pacsun. “At Pacsun, we want our consumers to be free to express themselves and choose what they want to wear without boundaries, which was the driving factor behind introducing our Pacsun Kids label, completely without gender,” said Brie Olson, president, Pacsun. In addition to Pacsun’s own kids line, the store features a curated selection of other brands, including Vans, Champion, Santa Cruz and others, that “embody the ethos of gender-free dressing,” the company said.



11/11/21 2:49 PM


Smarter Lighting Three ways connected lighting can help reimagine retail By Addy Oluyemi In today’s competitive landscape, retailers don’t have the luxury of waiting for change to subside or evolve into some sense of normalcy before re-evaluating their store operations. In the blink of an eye, we saw shopper behaviors change from discovery and impulse buying to basic and bulk purchasing. In addition, demand drastically increased for omnichannel experiences and alternative fulfillment methods that prioritize comfort and convenience. While the function of store lighting was previously limited to illuminating spaces, lighting has evolved as a convenient enabler of Internet of Things (IoT) technology. It can help retailers unlock opportunities to propel customer loyalty and sales, strengthen brand differentiation and operational efficiencies — and gain the flexibility needed to navigate rapid change. Now retailers don’t have to guess about shopper behavior between point of entry and point of sale. CONNECTED SYSTEM An end-to-end connected lighting system consists of fixtures or light sources embedded with visible light communications (VLC) technology and Bluetooth beacons. These sensors form an indoor positioning system throughout a store space. They can communicate with: • Cloud-based software, allowing users to remotely monitor, manage and control all those light sources in the store or across multiple stores via a single dashboard; • Other IoT-enabled devices like barcode scanners; • And even a retail company’s app on shoppers’ mobile phones if location services are enabled. Uniting lighting with software and the IoT allows retailers to bring together real-time data across every corner of their retail operations. Here are three ways to leverage the technology and data-driven insights to drive success. • 1/Gain ground with shoppers: It’s well known that most consumers use their mobile device while shopping, so why not leverage this to create a better experience and increase sales? The lighting-based indoor positioning system can communicate with the enabled retailer app on shoppers’ mobile device, allowing it to act as a personal assistant. The app can guide shoppers through the store based on their shopping list, helping them find items efficiently and autonomously and preventing lost sales due to shoppers not finding the products they want. In addition to assisting shoppers through wayfinding, the connected lighting system can be used to support marketing efforts, lengthen dwell time at displays and increase basket size. It can trigger appbased messages with targeted product suggestions based on shoppers’ lists or notify them of sales, coupon opportunities and loyalty incentives. It’s a simple way to delight customers while helping your brand stand apart from the competition. CHAINSTOREAGE.COM

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• 2/Optimize employee productivity: Connected lighting systems enable retailers to tap their greatest asset – their employees – more effectively. A retail manager can rely on insights and alerts from real-time analytics in the connected lighting system dashboard to optimize staff schedules and have them support when and where it’s needed the most – checking out customers at a busy time in the day or restocking certain aisles. Similar to shopper wayfinding, the indoor positioning system can help employees find the most efficient route through a store when picking orders intended for delivery or buy online, pick up in-store/ at the curb. Not only does this reduce shopping time and allow for more order picking cycles, it can also help decrease the frequency of errors that lead to returns or unhappy order recipients. And if customers do request live assistance in the store, indoor navigation can connect employees and shoppers quickly. In a tight labor market and to protect profits, retailers should look to connected lighting as an alternative method to help boost employee and overall workplace productivity. • 3/Reduce costs and waste: Connected LED lighting systems make it easy to find savings in fixed overhead costs such as energy consumption. Savings start immediately upon making the switch to LED luminaires and retrofits, as these consume much less energy than conventional light sources. When smart controls and sensors are added to the fixtures, retailers can gain even greater efficiency, reducing energy consumption 25% to 30% in front-of-house. Beyond energy savings, connected lighting with scheduled dimming can help extend the shelf life of perishable items, such as fresh meats, cheese and fruits/vegetables to reduce waste. A store’s lighting can be preconfigured with specific settings to ensure that food is illuminated in the most appealing way during peak hours. During non-peak hours, less light should be used to help preserve the items and limit discoloration or oxidation to extend the selling period. Connected lighting can bring value with sustainability and cost-savings to retail facilities without compromising other operational efforts or the customer experience. As retail continues to evolve at a rapid pace, yesterday’s ways of operating stores may no longer be viable. It’s imperative to explore new avenues of innovation to transform. Lighting, enabled by the IoT, can help forward-thinking retailers redefine the role of their stores and streamline operations, to support customers, sales and profits today while developing the path forward to a bright and successful tomorrow. — Addy Oluyemi is retail & hospitality end-user marketeer at North America Systems & Services, Signify (signify.com).



11/11/21 2:50 PM


X/SPECS: Spotlight on Physical Retail By Marianne Wilson The future of brick-and-mortar retail took center stage at Chain Store Age’s 19th annual X/SPECS, the exclusive event for executives involved in the planning/design, construction and facilities management of retail stores and restaurants. Held at the Waldorf Astoria in Orlando, Fla., Nov. 3 – Nov. 5, X/SPECS brought together retailers from all sectors of the retail and restaurant industry. Non-traditional retail, including the financial sector, was also represented. The event was sponsored by top suppliers and service providers in brick-andmortar development and maintenance. • Keynote: The program officially kicked off with a dynamic — and thought-provoking — keynote by one of the industry’s most prominent creative leaders, Christian Davies, who currently serves as design practice leader at Bergmeyer. “The one thing we should not fear is the future of retail,” he told attendees. “Retail is a fundamental part of our DNA … it’s part of what makes us human.” Davies, whose message was themed around “Retail’s New Horizon,” spoke about the challenges and opportunities facing today’s retailers. “I see these times as a huge opportunity to undergo a reboot…a complete shift,” he said. Noting that “we are retailers and growth is what we do,” Davies said it’s time to grow “in new and different ways.” In fact, he added, it is already happening Christian Davies, design practice leader at Bergmeyer, kicked off X/SPECS with a keynote on “Retail’s New Horizon.” 20

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through adaptive reuse of existing spaces and smaller, more innovative formats, such as Nordstrom Local and Bloomingdale’s new, small-store concept, Bloomie’s. Davies called for retail to adapt a more sustainable mind set, to think more along the terms of rebuilds than new builds. “The greenest building is one that is already standing,” he said. Davies pointed to UK retailer Marks & Spencer, which has put sustainability at the heart of its business through its “Plan A” program to help combat climate change, use sustainable materials, trade ethically, reduce waste and help shoppers lead healthier lifestyles. Launched In 2007, the program resulted in M&S achieving carbon neutral status in 2012. The retailer recently updated the plan, with a goal of reaching net zero status by 2040. “Today, Marks & Spencer is the number one sustainable retailer globally,” Davies said. “The company’s Plan A is a roadmap on how to deliver and run a massive fleet of sustainable stores.” • Panel: In another program highlight, Korn Ferry senior client partner Craig Rowley led a discussion among retailers on the challenges caused by a limited skilled workforce and a materials shortage. Panel members included Mike Guinan, VP of operations and services, White Castle; Aaron Harris, VP of real estate and construction, Dutch Bros; and Danielle Mosley, facility manager, Aaron’s. The panelists noted that it’s not only retailers who are experiencing shortages. Many vendors are having trouble

Retailers and suppliers talked business in the one-onone information exchanges that are part of X/SPECS.

meeting deadlines because they don’t have the staff and/or the materials. Consequently, the retailers have had to be more accommodating, to “make do” and, in some cases, let things go a little bit longer to be repaired. “If there is one word that describes how we have to be today it is agile,” Rowley said. Here are five key-takeaways from the panel. • Be Agile. With labor and materials shortages on the rise, companies have to be flexible in how they approach projects. Dutch Bros, for example, has upped its reliance on prefabricated construction. • Plan Ahead. White Castle and Dutch Bros pre-ordered material and equipment that they put in storage — when the projects come up, they just need to line up labor and timelines. • Improve Vendor Relationships. A way to make it easier to navigate services amid a labor shortage is to keep up relationships with vendors and become a “customer of choice.” This includes things such as paying bills on time and keeping lines of communication open. • Utilize support desks and automation to streamline and prioritize repairs. X/SPECS also provided retailers the opportunity to network with colleagues and business partners. Retailers also were able discuss specific business needs with suppliers at one-on-one information exchanges that provided an ideal opportunity for business strategizing and partnering. Also, suppliers and service providers had the opportunity to share solutions with retailers in a wider setting via theatre-styled presentations.



11/11/21 2:50 PM


Public Lands

TRENDING STORES: Dick’s Sporting Goods continues to roll out its new experiential store formats. The nation’s largest sporting goods retailer opened its second Public Lands store, in Columbus, Ohio. Focused on outdoor activities and land conservation, the format debuted in September, at Cranberry Square, in the Pittsburgh suburb of Cranberry Township. The 60,000-sq.-ft. Columbus Public Lands features a 30foot rock wall, an in-store gear repair and rental department, and specialized shops dedicated to various outdoor activities including biking, camping, fishing, paddling, climbing, running and hiking. One percent of all Public Lands sales will go back into local and national conservation efforts. In addition, Dick’s opened its second Golf Galaxy Performance Center, at Tamarack Village Shopping Center in Woodbury, Minn. The former Golf Galaxy store has been redesigned to offer golfers of all levels an immersive experience, with state-ofthe-art hitting bays, custom fittings and golf lessons from a PGA-certified professional. … RH’s (formerly Restoration Hardware) newest retail showplace is a 60,000-sq.-ft. “gallery” at Oakbrook Center, Oak Brook, Ill. The location continues RH’s expansion into hospitality, with a glass-encased rooftop restaurant and wine bar that open onto a landscaped park area. The luxury home furnishings retailer plans to open

a four-level, 80,000-sq.-ft. space at Fashion Island, Newport Beach, Calif., in spring 2024. The rooftop restaurant promises ocean views. … Pyscho Bunny continues its retail rollout. The menswear retailer, known for its vibrant colors and whose logo is an irreverent bunny and crossbones, opened a store at Mall of America. It’s one of 20 locations the company is opening this year. … Vuori, the Southern California-inspired, direct-to-consumer performance apparel brand for men and women, plans open more than 100 U.S. stores during the next five years as well as expand internationally in key markets throughout Europe and Asia Pacific next year. Vuori, which currently has some 11 stores, recently received a $400 million investment from SoftBank Vision Fund, valuing it at $4 billion. It is one of the largest investments in recent times for a private fashion company.

COMING ATTRACTIONS: Rhianna, the 33-year-old pop superstar and fashion and beauty mogul, is taking her billiondollar Savage X Fenty lingerie business to the brick-and-mortar space. The digitally native brand plans to open freestanding Savage X Fenty stores next year. … Allbirds, the digitally native sustainable footwear and, more recently, apparel brand has gone public. With some 35 stores currently open, the company says it is in the early phase of a ramp up towards “hundreds of potential locations” in the future.







1-800-295-5510 CHAINSTOREAGE.COM

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11/11/21 2:50 PM


Conversational Intelligence:

Making Connections Lee Barth is enterprise sales director at Marchex.

Call monitoring has evolved significantly during the past few years, with conversational intelligence solutions providing analysis and insights that can help a retailer improve its bottom line. Chain Store Age spoke with Lee Barth, enterprise sales director at AI-powered conversation intelligence company Marchex lbarth@marchex.com, about the evolution of call and text monitoring and how applied conversational intelligence can benefit retailers.

How has call monitoring evolved in recent years? The call quality has improved dramatically because of increased and enhanced carrier coverage along with the clarity of audio signal with wider usage of VoIP in landlines and cell phones connecting thought wi-fi. This lends itself to better call recordings and, ultimately, more accurate transcription that allows us to apply AI models against keywords and phrases that are spoken during the conversation. With this evolution, more conversational data than ever is flowing through the models for continual training and improvement, generating more accurate results. Instead of managers listening to a random set of recordings, through AI we can now determine the outcome of the call and apply labels. This enables managers to more effectively pinpoint the most critical calls and conversations, saving valuable time and resources. How can retail companies best leverage calls and texts? Our data shows that calls and text messages are the preferred communication channels for consumers when engaging with retail stores. In this era of new privacy protections, calls and texts can create some of the best first-party data a retailer can leverage because they represent a conversation directly between a consumer and your business — but you need a call tracking and conversation intelligence platform to extrapolate actionable first-party data. A conversation intelligence solution enables you to identify gaps in your customer journey, such as friction points in your ecommerce flow where the consumer decides to text or call instead. It also helps to identify missed connections and drop-off points when a customer is calling, and measure the performance of agent/sales reps in handling conversions. Having an AI-powered texting

platform enhances your omnichannel strategy and allows you to reach customers in the channels they prefer to communicate by providing them a call or text option. Texting, hands down, is one of the most effective engagement channels right now. Research has shown that open rates are as high as 98%, consumers are six times more likely to respond to a text than email and 54% of consumers want to receive text alerts and promotions. Tell us a little about Marchex. We provide solutions for both marketers and sales/operations to connect conversation outcomes to revenue. Marketers love us because we help them understand which channels and campaigns are driving calls and texts that lead to conversions. We connect that data with their CRM, analytics, and buying dashboards, enabling critical optimizations to deliver a better return on ad spend and help them get credit for marketing-driven sales. Once a call is connected, sales/operations leverage our conversational intelligence and AI to understand outcomes, identify revenue opportunities and take immediate actions to win more business. What sets Marchex apart from other companies in its sector? Experience! We are one of the longest tenured providers in the space, and are constantly innovating with market-leading and award-winning solutions. This year alone, we have won over eight product awards for our ability to innovate to help businesses. Most critically, we are invested in our partnerships with businesses through deep exploration of their goals, gaps, and opportunities. We are also the only provider in our space to offer a comprehensive and AI-powered solution for both calls and texts.


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How does a retail company benefit by partnering with Marchex? Experience is key and that begins with the first engagement where we take a very consultative approach to all our partners. We believe it is critical to have a knowledge of a retailer’s market and deep understanding of their business to determine where we can deliver the most substantial gains. Many of our retail partners see a meaningful impact to their business. We always recommend a phased approach to avoid overwhelming initial discovery of data insights — you gain more clarity by looking at one data source at time. Can Marchex help a retailer improve its marketing strategy and overall customer experience? Absolutely, this is the foundation of what we provide for our partners. Marketing strategies are built on budget-related performance. If you don’t know where calls and texts are coming from (and their outcomes), that creates a significant blind spot that can cause you to make the wrong decisions, squandering budget and compromising results. We care deeply about connection rates, hold times, response times, and call abandonment which are critical measurements in the customer journey that we can illuminate. We are passionate about helping retailers solve their pain points. Can Marchex help a retailer grow its bottom line? If your brand values calls and/or texts, then absolutely yes! This is exactly the impact we deliver for a multitude of our retail partners. Our core competency is helping retailers sell more by performing a forensic investigation on why calls/texts aren’t converting and shining a spotlight on which marketing channels drive the most efficient results to optimize business performance. NOVEMBER/DECEMBER 2021


11/11/21 2:51 PM


Statement of Ownership, Management, and Circulation 1 Publication Title: Chain Store Age 2 Publication Number: 0054-4100 3 Filing Date: 10/1/2021 4 Issue Frequency: Bi-monthly 5 Number of Issues Published Annually: 6 6 Annual Subscription Price: $80 7 Complete Mailing Address of Known Office of Publication: 8550 W Bryn Mawr Suite 300, Chicago, IL. 60631 8 Complete Mailing Address of Headquarters or General Business Office of Publisher: See No. 7 9 Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor: (Publisher) Gary Esposito, Publisher, see No. 7; (Editor) Marianne Wilson, Editor in Chief, see No. 7 10 Owner (Full Name and Complete Mailing Address): EnsembleIQ, see No. 7; 11 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages, or Other Securities: None

12 Tax Status (The Purpose, Function, and Nonprofit Status of this Organization and the Exempt Status for Federal Income Tax Purposes): Has Not Changed During Preceding 12 Months 13 Publication Name: Chain Store Age 14 Issue Date for Circulation Data Below: July/August 2021 15 See Chart Below 16 See Chart Below 17 Publication of Statement of Ownership for a Requester Publication is required and will be printed in the November/ December 2021 issue of this publication 18 Signature and Title of Editor, Publisher, Business Manager, or Owner: I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/ or civil sanctions (including civil penalties): Lina Trunina, Manager. Sept.29, 2021

Sections 15 and 16

Average No. No. Copies of Copies Each SIngle Issue Issue during Published Previous 12 Nearest to Months Filing Date

15 Extent and Nature of Circulation a Total Number of Copies (Net Press Run) b Legitimate Paid and/or Requested Distribution (1) Outside County Paid/Requested Mail Subscriptions (2) In-County Paid/Requested Mail Subscriptions (3) Sales Through Dealers and Carriers, Street Vendors, Counter Sales, and Other Paid or Requested Distribution Outside USPS (4) Requested Copies Distributed by Other Mail Classes Through the USPS (e.g., First-Class Mail) c Total Paid and/or Requested Circulation d Non-Requested Distribution (By Mail & Outside the Mail) (1) Outside County Non-Requested Copies (2) In-County Non-Requested Copies (3) Non-Requested Copies Distributed Through the USPS by Other Classes of Mail (4) Non-Requested Copies Distributed Outside the Mail e Total Non-Requested Distribution f Total Distribution g Copies Not Distributed h Total i Percent Paid and/or Requested Circulation









0 15,079

0 14,888

3,936 0

5,775 0



382 4,318 19,397 0 19,397 77.7%

1,236 7,011 21,899 0 21,899 68.0%









16 Electronic Copy Circulation a Requested and Paid Electronic Copies b Total Requested and Paid Print Copies (Line 15c) + Requested/Paid Electronic Copies (Line 16a) c Total Requested Copy Distribution (Line 15f) + Requested/Paid Electronic Copies (Line 16a) d Percent Paid and/or Requested Circulation (Both Print & Electronic Copies) (16b divided by 16c x 100)

I certify that 50% of all my distributed copies (electronic & print) are legitimate requests or paid copies.

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ADVANCE DOCK LIFTS ARE FAST, SAFE, EFFICIENT & VERSATILE DOCK LIFTS VERSUS NOTHING: Unloading trucks without any equipment is very slow and puts dock personnel at risk for shoulder, back and metatarsal injuries. Also, goods may be damaged. DOCK LIFTS VERSUS CONVEYOR UNLOADING: Conveyor unloading is 2 to 3 times slower than using a dock lift. It leaves personnel at risk of shoulder, back and metatarsal injuries and goods are at risk. DOCK LIFTS VERSUS TRUCK TAILGATES: Tailgates and their maintenance are more expensive than dock lifts. Tailgates reduce truck payload and increase vehicle wear. Tailgate platforms are smaller and do not offer handrail protection available on dock lifts, more risk for operators and cargo. DOCK LIFTS VERSUS DOCK LEVELERS: Dock levelers can only serve a limited range of truck heights (usually 8”) so they cannot serve all size trucks. An Advance dock lift can service any size truck without limitations.

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Thank God for the Reindeer Folks are back out in public, packing restaurants, stadiums, and stores. CBRE expects that holiday sales will be up more than 8% from last year, with the average American consumer spending $998. Most of those Americans are jonesing to get out to malls and shopping centers to hear the carols, shop, and get pix with Santa, and that will all be possible. What may not be possible is finding the gifts they want to buy--unless they started shopping on a Black Friday in September. A report released in October by the American Trucking Associations said that the driver shortage in the United States had risen to 80,000, an all-time high. Most of the shortage falls in the long-haul trucker category that national retail chains rely on for receiving merchandise. The director of the Port of Los Angeles, Gene Seroka, told the New York Times that 30% of the port’s postings for truckers went untaken every day, often because there is a shortage of truck chassis and warehouse workers, as well. President Biden said he might call out the National Guard to deliver goods and the Federal Motor Carrier Administration was trying to simplify the process of obtaining a commercial driver’s license after some states cut back licensing operations during the pandemic. Some large retail chains have resorted to acquiring their own container ships to move goods into the U.S. For local deliveries, they might want to take an example from some towns in the state of Massachusetts. In early November, Watertown offered drivers with commercial licenses and their own trucks $310 an hour


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to plow snow. Lowell was paying $155. Retailers will be paying lots more for additional store associates as well. Reports of signing bonuses and double the usual hourly wages are common. CBRE’s holiday report noted that the retail industry had more than 1.2 million job openings, a 20-year high. Another report from the University of Pennsylvania’s Wharton School said that more than half of retail executives they surveyed about the holiday season said they would be passing additional costs of labor and supply chain complications on to consumers. A third of those surveyed, however, filled with the holiday spirit, said they’d eat the extra costs. When will trucking return to normal? Sadly, it might not be until the day when self-driving trucks hit the highways. According to the American Trucking Associations… • The average age of truck drivers is high, so retirements, too, are high; • only 7% of truck drivers are women, far below their average representation in the workforce; • because long-haul drivers drive through a lot of states, and not all states have legalized cannabis, they fail a lot of drug tests, and • the federal age mandate of 21 for a commercial license excludes many younger drivers who’d like to drive trucks. Ah well, we’ve made it through the pandemic, we’ll make it through this. Still, wouldn’t it be great to just be able to yell, “On Dasher! On Dancer! Now Prancer and Vixen!”

Al Urbanski aurbanski@chainstoreage.com @AlUrbanski (Twitter)



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11/11/21 2:51 PM


The Rebound Of

Physical Retail

Top retail real estate executives tell how the perilous pandemic straightened the path for brick-and-mortar. By Al Urbanski


ollowing a torturous year of shutdown malls and reticent shoppers, Chain Store Age wanted to take the temperature of the retail real estate industry and learn how it foresaw a future that the press and social media have daubed with online consumer dominance and dying malls. Leading developers were eager to share their views. We interviewed 20 of them, and their responses were so varied, their insights so compelling, that we decided to deliver their direct thoughts to readers in the following condensed oral history.

“Landlords are forced to be 100% customer-obsessed post-pandemic. It’s no longer about showing a space and getting the highest rent possible.” — Colin Shaughnessy, Unibail-Rodamco-Westfield


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DTC GOES PHYSICAL Online sales got its big chance. Sales went way up due to necessity, but then settled. Now the convergence of online and brick and mortar is real. Warby Parker is expanding. The number one online seller, Amazon, is opening different types of stores. They’re coming to our malls. They all want to be in real estate. There’s a new synergy between on- and offline. People shop online to look and learn and then say, “Hey, I can go into a store and try it on?” Our centers offer high density and high barrier for entry, so big DTC brands are finding so many different ways to use a store. It used to be just showrooming; now it’s curbside pick-up. We’re seeing double digit growth on sales compared to 2019. Consumers want an experience. I’ve been with Macerich for two decades and think it’s one of the most exciting times in retail. It’s now clear that the customer journey runs both online and offline. People still want to hear, see, taste and feel the products they’re buying. — Michael Guerin, executive VP of leasing at Macerich

If physical retail’s waning, why are Warby Parker and other native online sellers expanding in brick and mortar?

Generally speaking, the death of brick and mortar was greatly overstated. It’s fair to say the pandemic accelerated its evolution by at least five years. Large, publicly traded companies were allowed to make the decisions they needed to make. In that way, the pandemic revealed the consumer mindset in a way that accelerated strategic changes. In our case, we feel that outlets are now positioned better than any other retail class out there. When we re-opened, brands were able to control the message to consumers on discounts. That resonates with the consumer, especially in the outlet channel. We saw huge demand in the centers we’re involved with. Consumers were eager to shop favored brands. Nike, Coach, Kors — when the stores reopened their customers were lined up outside. We had to engage in some crowd control. It was not uncommon to have two-hour waits on weekends in a hot climate. — David Hinkle, principal of The Outlet Resource Group NEW TENANT/LANDLORD RELATIONSHIPS Landlords are forced to be 100% customer-obsessed post-pandemic. It’s no longer about showing a space and getting the highest rent NOVEMBER/DECEMBER 2021


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Not every enclosed center can have the world’s largest indoor pool like American Dream, but entertainment attractions are now de riguer in malls.

possible. Consumer spend is shifting so quickly that we have to be super-focused on everything the customer wants while being really patient with what we do with our space. It’s an interesting challenge in this industry in which people on the sales side are not so patient. But now we’ve got to go out and find the uses customers really want to see in our malls. When shopping centers started, the purpose was to bring the community together. We had lost that focus, because it became all about the retail. Now we have to be more artistic in the way we draw people to our malls. What if we focused on how many places shoppers visit when they come to our malls? If it’s just 1.5 and it turns to 2.5, how significant would that be? And what if we could push that to three or four? What the pandemic showed is that those retailers and center owners who have artistic ability to market themselves will bring more people to their space. A lot of retailers got old in their spaces. They now have to think about what they are going to bring to the community and widen the diversity of guests in the center. What can they do with their landlords to get away from selling only within four walls? Pre-pandemic, our partnership was different than it is now. The retailer was so focused on KPIs and the landlord was so focused on filling space and making money that we lost sight of what our relationship was meant to be. — Colin Shaughnessy, executive VP of leasing, Unibail-Rodamco-Westfield Over the last 15 years. E-commerce, Amazon, and market conditions have not been nice to the partnerships between landlords and CHAINSTOREAGE.COM

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“The pandemic altered physical retail but affected it in very positive ways. Physical stores proved to be essential.” —Bill Wright, CBRE

tenants. We need to get back to the old partnerships. Both have to stop looking at the other side as ATMs and work together as partners. What I’m hearing is that knowing who your landlord is really matters again. Retailers should care about how my company leads, how we pick our teams, how effectively we deploy them. I think it matters. I think tenants think that they can tell how a landlord’s going to treat them by how they treat their own teams, the people that the tenant works with most. If a landlord doesn’t treat their own team well, they’re probably not going to treat the tenant well. — Adam Ifshin, CEO, DLC Management Corp. Consumers changed. There’s a better connection between them and brands to be more meaningful and purposeful. I definitely think that, overall, the relationships between landlords and tenants have become less client-vendor and more like partnerships. We look at who they are and what they strive to be. Many of our tenants are luxury brands, and they’re not different



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from other types of retailers in that they want to connect physically with their audiences. They’ll do events to have customers visit at a special date and time for fashion shows and cocktail receptions. In November, Saks Fifth Avenue Ave stayed open later to kick off a new customer program, and at American Dream the Meadowlands Chamber of Commerce hosted their annual Breeder’s Cup gala and recognized the Ghermezian family for joining their circle. Triple Five’s founders are visionaries who anticipated what was coming way before anyone else. Forty years ago, when they opened West Edmonton Mall, they knew it had to be more than retail. — Jill Renslow, executive VP of marketing, Triple Five FULFILLMENT The pandemic altered physical retail but affected it in very positive ways. Physical stores proved to be essential. Things such as curbside pick-up and buy-online-pick-up-in-store turned retail centers into

COVID Changes that Petered Out Dotan Zuckerman, who was the VP of leasing at North American Properties’ Avalon center in suburban Atlanta, and who is currently filling that role for the retail component of Hines’s Fenton 92-acre mixeduse property going up in North Carolina’s Research Triangle, was one of the few executives interviewed for this piece who didn’t foresee many significant changes ahead due to the COVID-19 pandemic. “At the beginning, we all talked about all the things the pandemic was going to change, like bigger stores, touchless doors, improved HVAC systems, but I’ve got to tell you, nobody’s talking about it now,” Zuckerman said. “Lululemon, for instance, is building bigger stores and giving people more room to shop.” The Fenton property still is under construction, and the pandemic forced some changes to be made in designs (such as more enclosed offices in the office space), but otherwise it’s business as usual, Zuckerman said. “If there’s ever another government shutdown, we’ll defer rent and not abate it,” he noted. “We’re giving retailers and restaurants more spaces for curb-side pickup, but we were planning that before the pandemic.”


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“I think it’s one of the most exciting times in retail. It’s now clear that the customer journey runs both online and offline.” — Michael Guerin, Macerich

distribution hubs. The physical store proved to be a critical part of the ecosystem. There’s no such thing as free shipping — the increase in cost that retailers experienced in the front end of the pandemic was overwhelming. Consequently, retailers realized there was a lack of warehouse space and said, “Wait a minute, we’ve got a network of physical stores we can use to cut down on those shipping costs.” They helped service online shoppers. That ticked up dramatically. Physical stores were saving the day for fulfillment during the pandemic. It’s tempered over the last quarter, but I think physical stores are going to remain an essential part of the ecosystem for online shopping. The worlds of physical retail and omnichannel are all one and the same today; all part of the ecosystem that meets the needs of the consumer that has become channel-agnostic. It’s incredibly exciting, and the consumer is going to be the beneficiary. —Bill Wright, senior managing director of CBRE Retail Advisory Services in the Americas NEW TENANTS If you think about it, you want to have tenants in your mall that make people say, “I want to go back there for that.” Now, if you’re from New York, you’re not going to go back to our Moorestown Mall in New Jersey to go to Gap, because you can just go to one in New York. But you might go back to Moorestown Mall to eat at Joe Italiano’s Maplewood restaurant, which is a restaurant from the Jersey Shore that’s opened at the mall. Or you might drive to our Magnolia Mall in Florence, South Carolina, to shop for unique southern style clothing and gifts. We continue looking for that kind of tenant that is indigenous to the area the property’s in. We combed the streets of Philly looking for standout shops in African-American neighborhoods and brought them into Fashion District in Philadelphia. —Joseph Coradino, chairman & CEO of PREIT Our malls typically are larger than competing malls in the areas, so we’ve always been out there looking for nontraditional tenants. But that’s a greater effort now. Going back 10 to 15 years, we were 95% traditional mall tenants and 5% restaurants and cinemas. Today, we are 75% traditional and the rest non-retail, including lots of entertainment options. That’s a lot of space at our Destiny USA mall in Syracuse, which is 2.4 million square feet. We started doing this in the late nineties and the trend continues to grow. NOVEMBER/DECEMBER 2021


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Department stores don’t have the say they used to have and enclosed malls are actually turning back to their initial days. Back in the seventies, my father, Robert Congel, used to put post offices and doctor’s offices in malls. And now that’s happening again. —Stephen J. Congel, CEO of Pyramid Management Group

We manage over 130 malls throughout the country and it’s a huge advantage to be able to free up space for new uses. We are repurposing space previously occupied by department stores to add grocery, fitness, entertainment—the sky is truly the limit. We’re able to expand experiences in the communities we serve. What we have more of now is flexibility. It’s speed to market, it’s innovation, it’s closer connection with the consumers in all of our communities where we operate. — Josh Deckelbaum, VP of leasing, Brookfield Properties MALLS WILL SURVIVE With the malls we’ve acquired, the bottom line is that they’re still located at Main and Main. Is the physical plant somewhat obsolete….is it not in keeping with the times of the 21st Century? Maybe that’s the case. But the bottom line is they’re still at the prominent intersection in their markets. That property is always going to be desirable, and what we’re doing is re-tenanting them to make the malls a destination again. The anchors are still very important, and they might be medical centers instead of department stores. We’re in a holding pattern right now, but I know there will be a flood of retailers and new concepts. In the meantime, the pent-up demand for socialization has brought cooped-up consumers back to our malls, and it’s been interesting to track the sales of our tenants. We have one jeweler who’s up 50% over pre-COVID levels. Shoes are way up, too, and food and beverage.

“Over the last 15 years. E-commerce, Amazon, and market conditions have not been nice to the partnerships between landlords and tenants. We need to get back to the old partnerships.” — Adam Ifshin, DLC Management Corp.


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I think the most important thing with restaurants is, “Are they a good operator?” To do that, you have to know how to resonate with locals. If you’re a coffee shop owner, have an eye to create a sense of place. Establish aggressive delivery programs. When I look at where we are in retail, I think there’s never a better time to be an entrepreneur. There are lots of opportunities for hitting niches that went away because of COVID. —David Hinkle, principal of The Outlet Resource Group One of Westfield’s missions at the remade Century City was to introduce a sense of community and widen guest diversity

“It was said that people would start buying everything online and malls would die. If that were true, the pandemic would have been the event that ripped the Band-Aid off the mall.” — Carmen Spinoso, Spinoso Real Estate Group

We just signed a lease with M@C Discount. They buy overstock merchandise that they auction online and that is retrieved from their facility. You’re physically coming to the location, but it’s not a store experience. You go there to pick it up. The company does appliances, hot tubs, furniture, tools, you name it. It’s a concept that wouldn’t have existed five years ago. They sell about 3,000 items a week, have 60 employees, and are in a space of about 150,000 square feet. They can fit into most anchor boxes. —Ashley Thornburg, director of retail operations, Lionheart Capital When I started as a big box retailer, it was just coming into its own and it was predicted that was going to kill the mall. Then power centers came, then lifestyle centers, and each time repeated that narrative. What the pandemic has done, interestingly enough, is changed that narrative. It was said that people would all start buying everything online and malls would die. The pandemic would have been the event that ripped the Band-Aid off the mall. But that’s actually not what happened. We have cell phone data that tells us who visits, how long they stay and how often they visit and what we’ve seen is a real strong resurgence of customer traffic. The reality is that visits are exceeding 2019 levels. The pandemic has proven that people are social creatures and like going out with other people. And they still like going to malls. — Carmen Spinoso, Chairman & CEO, Spinoso Real Estate Group



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JOSEPH CORADINO on the mall’s future


s we look ahead one thing is crystal clear: What was previously known as the mall has evolved well beyond its traditional definition. Building upon the foundation laid by our retail core, we contend that we are now curators – creating customized, continuously evolving properties that generate success for our tenants and meaningful impact for the communities we serve. At PREIT, we see this focused around five core growth areas that we have identified: Multi-family & Hotels, Grocery & Essential Uses, Healthcare & Wellness, Experiential, and of course all varieties of Retail. Along these lines, in the past month, we welcomed our first Aldi grocery store and opened a 104,000-sq.-ft. Tilt Studio family entertainment center at Magnolia Mall. These additions have proven to attract a broader customer base with weekend mall traffic up 33% at Dartmouth Mall following the opening of Aldi. In Florence, S.C., consumers would have to drive over an hour to find a similar offering. In the coming months we will continue to open distinctive tenants. Turn 7 is opening at Moorestown in November. Turn 7 is a specialty liquidator that offers a wide array of brand name merchandise including housewares, ready-to-wear apparel, and accessories. In 2023, we will be opening a Cooper University Healthcare outpatient facility to Moorestown, where we also have approvals to bring over 1,000 apartment units and a hotel. This will be a truly game-changing mix of destinations for a property in a highly competitive retail market. In 2022, Tilt Studio will open an action-packed two-story 104,000-sq.-ft. Tilted 10 and Studio indoor family entertainment center at Willow Grove Park. The premier facility will feature a restaurant with chef-inspired menu; premier bowling lanes; multi-level laser tag; black light mini golf; bumper

cars; virtual reality; Pinball, and more than 200 games and attractions. In the first quarter of next year we will open our first self-storage facility in underutilized below grade space at Joseph Coradino Mall at Prince George’s. In this community, hundreds of apartment units have been developed in the last decade, so this use is a perfect addition to keep footsteps at our doors and ensure success for our existing tenants. What these projects have in mind is that there is no longer a cookie-cutter approach to retail. It’s about customizing the right program for your real estate.

How do we know our strategy will be effective or is the right path for the future? For starters, we can look at core metrics – traffic and sales. October traffic remained robust at over 90% of 2019 levels and with total visits up 3% over 2018. And sales have grown beyond that of 2019. For the 3rd quarter, sales for comparable tenants were up 14% in our core portfolio compared to the 2019 period. The consumer is back and is responding to our strategically curated portfolio in core markets with a differentiated tenant base that offers our communities purposeful places that enhance their daily lives. A proactive approach to continuously optimizing the portfolio has yielded success for our tenants--which is a cherished principle in any action we take. Joseph F. Coradino is chairman & CEO of PREIT, an owner-operator of 18 malls in the eastern United States.

“The consumer is back and is responding to a differentiated tenant that offers them ways to enhance their daily lives.” Residential units will ring the perimeter of PREIT's Moorestown Mall.


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the future of retail is here! visit preit.com to learn more about our distinctive opportunities.

coming soon O F F LI N E by Aerie

cherry hill Mall








2005 Market Street

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Suite 1000

Philadelphia, PA 19103



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A.T. TOROYAN on partnership


hen Diane Cullinan Oberhelman founded Cullinan Properties in the 1980s, she was unique. Yes, she was one of a very few female founders of a commercial real estate company, but that was not what was compelling about her concept. Her primary experience was in residential real estate, but her vision was to enhance communities, not just build developments. Her formula was to blend office buildings, apartments, and retail together in well-located but under-developed areas and she along with a team at Cullinan Properties expanded the communal living, working, and playing space in well-established towns in Central Illinois. Cullinan Properties projects like The Levee District in East Peoria and Streets of St. Charles outside of St. Louis helped forge the mold used by the developers of so many of the mixed-use town centers of today, what is commonly touted today as “Live-Work-Play”. The element that’s often missing in so many new mixed-use developments created today is true partnerships between the developers, municipal officials, and investors whose reputations, dreams, and livelihoods are weighed in the balance of the finished product. We at Cullinan believe that, from a project’s inception, these three parties all need to have aligned interests, so we sit together ideologically at what I call a “round table” and collaborate on all major decisions. Too many developers try to dictate their own needs and wants to a city or county. What we at Cullinan do first is actively listen to municipalities and find out what the real needs of their communities are. Of course, what we really want and what they really want is often governed by the ever present third party at the table--the investors or lenders. When the project’s finished and all is said and done, our first indication that we’ve succeeded is seeing the town officials the investors and most of all, the community at large beaming. Diane Cullinan instilled in her company a level of pride in completion and commitment that requires listening to all the important groups that have a stake in a project. It takes time. It takes abandoning some traditional ideas and understanding

”The pandemic has taught all of us— towns, developers, investors, and tenants—that we need to become lean, efficient, and collaborative.”


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future trends. It gets you to a point at which all parties say, “Great. We have a 2 million square-foot project with retail, restaurants, multi-family residential, office, and medical … A.T. Toroyan wouldn’t this be a cool place to live?” The challenge that the pandemic has presented to both real estate developers and retailers is to form these same kinds of lasting partnerships. To sit down at a table with the third-party consumer being top of mind and to continue to discuss and negotiate how to envision and construct a project that will keep that consumer coming back for years and years. Our projects are intended to be a long-lasting part of the fabric of a community and ones that all can be proud of. The pandemic has taught all of us--towns, developers, investors, and tenants—that we need to become lean, efficient, and collaborative. The time has come for us to engage in hyperpersonalization. Not to look at a new tenant at a signing and say, “Hey, that’s a good deal for us today as it meets our parameters,” but to look at a tenant throughout their stay on our property and ask, “How is this tenant doing? How are they handling omnichannel issues?” Our job is not simply to collect rent, but to help tenants prosper as valuable pieces of a larger puzzle. When retailers expand into new markets, they often tell their prospective landlords that they want to enter the property on terms that they’re confident will bring them success. Since the pandemic has been in place, retailers’ reliance on and adherence to proven models of their tenancy in centers has become much more important to them in deciding which deals to sign. They are taking longer looks at site plans, co-tenancy, development details, and demographics than ever before. So when retailers and their broker consultants ask for more detailed information or special considerations, we’re doing our best to say yes a lot more than no. In the old days, the pendulum of leverage swung between the landlord and the retailer and, more often than not, landed on the side of the landlord. Today, however, with a finite number of great opportunities and a fewer number of expanding concepts, our belief is that the pendulum needs to land in the middle. A.T. Toroyan, the vice president and director of real estate at Cullinan Properties, has spent 25 years in retail real estate working in various capacities for both landlords and tenants.



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CBRE’S BRANDON ISNER on retail’s beckoning future


etail has become quite the conundrum. We hear that retail has never been worse. Then retail has never been better. We eat up those headlines, because let’s face it – the general public has a bigger window into the state of retail than any other commercial real estate sector. We can walk by office buildings, or hotels, or apartment buildings and not know what’s going on inside those walls. But we can all take a walk through a retail center and see which shops have vacated or which restaurants have a line out the door. But it brings us to a point: extremes supply the averages. Because in reality, retail spaces are increasing their productivity on a per sq. ft. basis, quite steeply. In short, retailers are doing more with less. How is that possible? We always hear that the U.S. is over-retailed. That we’re headed for a retail apocalypse. Well, we’re not. Within commercial real estate, black swan events such as the COVID-19 pandemic can encourage very quick and sharp reaction. This is what we’ve seen in retail. Foot traffic was reduced to zero for nonessential retail. E-commerce share of total retail sales ballooned as consumers had few other choices. Grocery spending took back the higher position with its battle against restaurants on who rules food and beverage sales. But things began to recover. The foot traffic analytics company Placer.ai reports that traffic has surpassed 2019 levels even some of the super-regional malls which media have branded as “endangered.” E-commerce’s share of total sales has stabilized as of late. Spending at restaurants has once again topped grocery receipts. Again, extremes supply the averages. What are the averages? Retail availability remains is currently sitting near 10-year lows, as per CBRE’s Q3 2021 Retail Figures report. The turbulence of COVID-19 was nowhere near what we saw during the Great Financial Crisis. That was an extremely difficult combination, a boom of retail development followed by a two-year recession. In comparison, our current situation is much more manageable.

“We always hear that the U.S. is over-retailed. That we’re headed for a retail apocalypse. Well, we’re not.”


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Rent growth tells a similar story. According to CBRE’s Econometrics Advisors, retail rent growth went negative in 2008 and stayed there until 2012. Since then, rent growth has been Brandon Isner modest, but steady. Postpandemic rent growth has accelerated and is expected to continue. Rent growth for open-air retail centers is expected to average 2.3% annually from 2022 through 2025. All in all, brick and mortar retail spaces are elevating their productivity. The boom within retail supply early in the century did a number on the sales per sq. ft. of existing assets. However, the recession in 2008 almost immediately cut off the retail development pipeline, which never again has risen above long-term completion averages. This allowed retail sales to catch up with supply. On an indexed basis, sales per sq. ft. in retail have almost completely recovered to those early 2000’s levels, and I believe they could be surpassed in 2025. From 2010 until 2020, retail sales grew by 42%, while retail supply grew just 4%, as per a recent study by CBRE Research. Online sellers fueled much of that growth, but brick and mortar is now rapidly benefitting from omnichannel activity. M-commerce—buying on mobile phones—has accelerated buy-online-pick-up-in-store and eMarketer predicts an increase of 19% in m-commerce for the 2021 holiday season, totaling upwards of $97 billion. Retailers still face challenges this holiday season. They’re forced to offer inflated hourly wages and signing bonuses to entice seasonal workers. Supply chain issues abound. Retailers are attempting to negotiate the obstacle by inflating inventory or are attempting to spread the shopping season over a longer period of time. Some large retailers are even hiring their own cargo vessels in hopes of bypassing port congestion. Concerns aside, the 2021 holiday season is shaping up to be an exciting one. It is expected to generate record levels of sales volume and go a long way toward restoring retail confidence for 2022 and beyond. This December returns us all to the gift-giving, coffee dates, dinners, reunions, and camaraderie robbed from us in 2020. But, for this holiday season and beyond, retail is back and open for business. Brandon Isner is an associate research director at CBRE and its leading expert on Florida markets.



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on reshaping properties for a new era


early every company engaged in retail, be it a chain of stores or an operator of shopping centers like UnibailRodamco-Westfield (URW), has been challenged this past year to execute bold ideas and engage in some serious innovative planning for the years ahead. At URW, the lessons learned during 2020 and 2021 were eagerly applied to a very important project of ours which has been underway since 2019. That’s when we first began the modern upgrades at Westfield Topanga. The luxury enhancements included everything from fresh new tile floors, dark walnut paneling and finishes, a complete makeover of all restroom facilities and family lounges, to the integration of state-of-theart digital infrastructure. These upgrades came on the heels of the retail destination’s 2018 unveiling of its fully operational 15,000 solar panel array, the largest installation at any retail destination in California. Now we have embarked upon another ambitious project that will transform the space once occupied by Sears at Westfield Topanga into a 180,000-sq.ft. indoor and outdoor district featuring a chef-driven Food Hall with sit-down restaurants, sleek lounges and cocktail bars, unique

“Topanga is a true melting pot. Our remake of Westfield Topanga & The Village attempts to position it as the place to shop, dine, play, and relax for all the people who live or visit this one-ofa-kind place.”

interior and exterior boutiques, and landscaped indoor and outdoor public spaces. Sixty-plus new tenants will satisfy new public tastes and preferences in the district, among them a Kim Brewer 7,500-sq.-ft. Hermès boutique, a 20,734-sq.-ft. Arhaus showroom, a 12-screen new-format AMC Theatres, and a Pinstripes entertainment center. Slated to open in phases beginning in Summer 2022, Westfield Topanga will welcome guests with a grand triple-height entryway featuring floating panes of glass and transparent lattices alongside verdant outdoor spaces, giving the entire center a street facing focal point set back from the corner of Topanga Canyon Boulevard and Victory Boulevard. Located in the Santa Monica mountains, Topanga is a unique community in Los The Pearl Bar Angeles County and a special destination. Our guests reflect a melting pot of diverse backgrounds, and the reimagination of Westfield Topanga & The Village will make it the place to shop, dine, play, and relax for the community who reside in the San Fernando Valley or those that visit us from surrounding cities. The additions we are making to the new campus will instill the property with a more intense morning, noon, and night experience. At least five new restaurants—including the bowling-bocci-beerand-bruschetta Pinstripes bistro—are intended to capture increased dwell time. To the evening dinner crowd, we will be making a very large statement with valet parking, an array of culinary options, and plenty of entertainment for our guests to enjoy. As one of URW’s most prominent flagship shopping destinations in the US, we have focused a tremendous amount of effort to further establish Westfield Topanga & The Village as a vanguard of experience-driven retail experiences tailored to satisfy the desires and demands of 21st Century consumers.

The new triple-height entryway at Topanga features floating panes of glass and transparent lattices.

Kim Brewer is the senior VP of development for Unibail-Rodamco-Westfield.



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2022 EXPANSION T H E U LT I M AT E D E S T I N AT I O N D I N I N G • S H O P P I N G • LU X U R Y • E N T E R TA I N M E N T H E R M È S • A M C T H E AT E R S • A R H A U S • P I N S T R I P E S • A N D S O M U C H M O R E


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on seizing opportunities with teamwork


t’s an exciting time for retailers and for those of us who build and manage the centers in which they conduct their businesses. We who have been able to lead our organizations through the COVID-19 crisis are now able to go on offense and grow. For DLC, that includes buying assets, selling assets, redeveloping centers, and introducing both new retailers and non-retail tenants to our properties as we densify them. The big opportunity presenting itself as we move forward is developing stores as last-mile fulfillment operations. But while these opportunities present themselves to all of us, only those companies with educated, dedicated, and motivated teams will be able to capitalize on them amid the limitations posed by a debilitated supply chain. What has us feeling positive as we head into 2022 is not just that investors are clamoring to become part of our projects. Not just that, as I write this, we have half a hundred leases being negotiated with tenants who are migrating to our open-air centers from their traditional homes in enclosed malls and other obsolete retail venues. What’s really leading our charge is an inspired and informed team that can deliver for these new tenants, that can get their buildouts done on schedule, and that can nimbly negotiate around marketplace delays in a way that turns sudden opportunity into triumph, not regret. But while well-capitalized and well-organized retailers now find themselves in a business cycle with potential for tremendous growth, they are struggling to find enough people to get the job done. The best-laid plans are left lying on the table without a skillful team in place to enact them. It all comes down to, “Who is your team?” All through the pandemic, we at DLC focused on our team.

“The cheapest deal, Mr. Tenant, may not be your best deal because it may not be able to get you open on schedule. You, like me, should care about my team a lot. It’s the team that going to get you opened on time in a great-looking store.”


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Just as before, we were constantly looking to hire the people we could count on to move our business forward—as well as to keep the ones that were already doing it. We haven’t laid Adam Ifshin one employee off in the past year and we’ve hired a dozen people since Labor Day. We continued to invest in who we think are the best employees in the business because, without them and their experience, the complications before us can’t be overcome and prime opportunities will be squandered. In a time when retailers are struggling with staffing, we are here to say, let’s get back to the intrinsic partnership that once existed between landlords and tenants. Not all spaces are the same, and not all landlords are the same. The cheapest deal, Mr. Tenant, may not be your best deal because it may not be able to get you open on schedule. You, like me, should care about my team a lot. It’s the team that going to get you opened on time in a greatlooking store. A good team is one that communicates with you. A couple of months ago I had dinner with a retail tenant from a big national chain who said to me, “You know, one of your guys called me up and said, ‘We’re killing to deliver for you on time, but there are some things we just can’t get from your HVAC vendor.’ So I called the vendor and told him to ship you the HVAC system I had ordered for another store and we opened on time. Nobody else had ever thought to call and ask us to help in a situation like that.” Our team does what they need to do. They follow our playbook. If you’re a retailer who’s worked with developers where delayed openings, cost overruns, and poor workmanship have been the norm, stay away from them. If they’re bad at the beginning, they’re not likely to get good in the middle or in the end. For some time now, retail tenants have been expanding into the centers that were the cheapest, not necessarily into the centers where they might have the longest long run and form a long-term relationship. We’d often hear, “Sorry, we found a cheaper deal over there.” But we’re not hearing that anymore from the well-financed and well-managed retailers that survived or thrived or were contrived during the pandemic. It’s time for retail center landlords and tenants to team up again. Adam Ifshin is the CEO of DLC Management Corp.



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STEPHEN J. CONGEL on post-pandemic consumers


hen Chain Store Age asked me to write a piece about what I thought 2022 would look like, they suggested that I write about what pandemic-influenced changes would endure once the virus had receded. But as the owneroperator of one of the 10 largest shopping destinations in the United States — Destiny USA in Syracuse—we at Pyramid felt that the biggest impact COVID-19 had on our business was the acceleration of a process that was already well underway at our properties. For the last 50 years we have been transforming enclosed spaces that, at their inception, were all about shopping into destinations that drew people from hundreds of miles away to traverse the world’s largest suspended rope course, to dine at 40-plus restaurants like P.F. Changs to the Cheesecake Factory and, yes, to shop at 250 stores ranging from Apple to Zumiez. We have long labored to create the centers that would be the first stops for people on back-to-school or Christmas runs in a retail center business that had been far over-built. However, I do believe the pandemic effected a profound change—not on us, the center owners; not on you, the retailers— but on the audience we both strive to attract and satisfy: consumers. The pandemic truly changed the shopper. How could it not have? People were afraid to leave their homes. In fact, they were told not to leave their homes if they didn’t absolutely need to by the Surgeon General, by their local governments, and by their employers who encouraged them to conduct all their business on their phones and PCs, turning Zoom into America’s conference room. And in the process, it made the shopper more highly educated. More educated about pricing, about quality, about alternative

“Brands like Amazon, Warby Parker, and Untuckit are doing nationwide expansions into physical retail. If online sellers are out to kill brick-and-mortar retail, why are they moving into our malls?”


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brands and alternative buying options. What we’ve observed is that the retailers that most successfully embraced an omnichannel platform during the past Stephen J. Congel year (and previously) were the ones that won the most business during the pandemic and the ones that best positioned themselves for success in 2022 and beyond. Today, whatever the consumer wants, retailers have to provide. They need to do a better job on choices for pricing and availability. They have to provide new options for how people research and make a purchase, employing both physical and digital options. Both Target and Kohl’s have done an excellent job of swiftly embracing omnichannel, setting up package pick-up zones inside their stores and curbside pickups in their parking lots. There has been a big mind change in the general public about shopping brick-and-mortar and shopping online. Look at the some of the most successful direct-to-consumer brands like Amazon, Warby Parker, and Untuckit and they’re doing nationwide expansions into physical retail. And it’s not brought about so much by COVID-influenced changes. It’s been amplified by supply chain issues that the pandemic shined a spotlight on. Industrial real estate is in very short supply and physical stores now play a crucial role as local distribution centers for high-volume online brands. Not long ago I saw a story on Chain Store Age’s website called, “If you own a mall, you also own a warehouse.” It’s so true. If online sellers are out to kill brick-and-mortar retail, why are they moving into our malls? Truth is, the formula for Pyramid’s success is relatively simple. It’s to put a few hundred of the highest quality sellers of goods and services together with the best entertainment options, the widest selection of restaurants — hotels in our larger properties—and provide them excellent service and amenities. Not all enclosed shopping centers will survive, but the best ones, the ones that are paying attention will—especially those that find exciting new retailers, redefine the shopping experience, and adapt to changing consumer preferences. Stephen J. Congel is the CEO of Syracuse-based Pyramid Management Company, owner-operate of 13 malls and shopping centers in the Northeast.



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Every Tuesday

Retailers Eye Tech Platform Transition

The premier newsletter showcasing technology and multi-channel, seamless retailing.

More retailers are attempting to transform themselves into full-fledged technology platforms — and with good justification. Retail enterprises that include iWalmart, Target, Kroger and Instacart want to join major technology providers such as Amazon, Apple, Google and Facebook by evolving into broadly-based tech platforms. Here are three underlying reasons driving these (and other) retailers’ ambitions to become developers and providers, as well as end users, of innovative technology solutions and services.

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

Sign up TODAY! www.chainstoreage.com/register

Competitive Advantage Imitation is the sincerest form of flattery. As an example of this axiom in action, when a retailer obtains an edge over its rivals by using a third-party solution, they attract attention, often followed by attempts to duplicate their technology success. As a longtime retail technology journalist, I can attest to retailers’ frequent reticence to publicly share the details of their IT deployments for this very reason. Even when a retailer leverages a heavily customized version of a technology solution, or employs a “best of breed” strategy involving disparate modules from multiple vendors, inevitably their competitors will take notice of successful rollouts and either copy them outright or use them as a building block for a more advanced version. However, retailers with a sophisticated proprietary technology lab can develop solutions that provide them with a competitive advantage that is much harder for their peers to duplicate or iterate. Earlier this year, Target publicized a pilot of a new, in-house-developed sortation center model in its home city of Minneapolis that streamlines the process of fulfilling digital orders from stores, which fulfill more than 95% of the discount giant’s online orders. The pilot uses store associates to pick and pack digital orders. A Target-controlled truck then collects the packages and brings them to the center, where they are automatically sorted with proprietary technology for individual routes and immediate delivery at the neighborhood level.

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The Vendor Life While retailers that become technology platforms have the opportunity to keep the advantages provided by their proprietary solutions to themselves, they also have the option of sharing those advantages – for a price. If an in-house-developed solution is good enough, retailers can turn around and sell it (or a version that doesn’t betray any company secrets) to their competitors. Amazon, the most prominent example of a retailer which successfully made the transition to tech provider, spun off its proprietary cloud computing platform into the separate Amazon Web Services (AWS) unit in 2006. AWS now serves as a significant profit driver for Amazon. More recently, Amazon began licensing its “Just Walk Out” autonomous checkout system to retailers including Hudson Travel. Custom Fit Even the most “vanilla” enterprise technology implementations, which utilize solutions from a single vendor to manage a large number of workflows, involve a fair amount of customization. The customization process typically involves one or several third-party specialists and can consume valuable money and time. Retailers that operate as technology platforms sidestep the need to bring in consultants, integrators, or value-added resellers. They can develop the exact features and functions they need, while minimizing or eliminating any integration that might be required with existing infrastructure. For example, since 2018, Kroger has been developing an automated “customer fulfillment center” (CFC) model with global online grocery retailer Ocado. Two CFCs are currently operational in Florida and Ohio, and Kroger plans to open 20 across the country in the next few years. The in-house-developed CFC model leverages proprietary technology solutions focused on artificial intelligence (AI) and advanced robotics and automation to create more seamless and efficient fulfillment, picking and delivery capabilities for enhanced digital commerce capabilities across the U.S. CFC also represents one of the models engineered for the grocer’s flexible, vertically integrated Kroger Delivery network, which will also include smaller automated facilities and spoke locations.

Dan Berthiaume dberthiaume@chainstoreage.com NOVEMBER/DECEMBER 2021


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Gap’s Supply Chain Transformation Retailer in five-year plan to build out fulfillment capacity By Dan Berthiaume Gap Inc. is leveraging a variety of automated solutions to ensure its supply chain can meet holiday demand and overcome pandemicrelated strains and delays. Chain Store Age recently spoke with Kevin Kuntz, senior VP, global fulfillment and contact centers at Gap Inc., about the apparel retailer’s application of automation and robotics across its supply chain. Kuntz also discussed how automated systems play a key role in state-of-the-art distribution facilities the retailer is building and retrofitting. “We are preparing for a robust holiday season,” stated Kuntz. “There is pent-up consumer demand. We were seeing explosive online growth even pre-COVID-19. And then like most retailers, through the pandemic we have had explosive online growth. From the customer viewpoint, we are better positioned than ever to meet our online promise.” According to Kuntz, Gap experienced a steady increase in buyonline-pickup-in-store and curbside pickup orders during the COVID-19 pandemic. “BOPIS has a place in our supply chain, but omnichannel business will level off post-pandemic,” said Kuntz. “BOPIS and curbside will continue to be an option convenient when you pass the store on the way home, or need to pick up an outfit the same day to wear that evening.” Gap is in the midst of a five-year supply chain transition aimed at building out fulfillment capacity. In 2020, the company built out fulfillment capacity at a new supply chain facility in Ohio to 1 million units per day from 650,000 units per day. On the heels of this expansion, Gap is undertaking three major supply chain facility projects in 2021. The initiatives include retrofitting a Canadian distribution center with current robotic automation technology, as well as boosting the fulfillment capacity at two distribution centers in the U.S. “At a distribution center in Phoenix, we are in the middle of a ramp-up from processing 175,000 pieces per day manually to 350,000 pieces per day,” Kuntz said. “And at a parallel development project in Gallatin, Tennessee, we are increasing capacity from 300,000 units per day this year to 500,000 units per day in 2022.” Kuntz said that the updates are enabling Gap to cut days out of its distribution centers and stock the facilities quicker. Although the pandemic hasn’t caused “significant” inventory delays, according to Kuntz, he acknowledged the retailer is fortunate to have long-term supplier contracts in place. “I wouldn’t want to be on the spot market right now,” he said. “There are port delays you have to adapt to. We changed transit planners. In addition, we use technology tools. Our control towers have capabilities from proprietary internal software that allow us to model inventory delays and adjust accordingly.” CHAINSTOREAGE.COM

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Gap's supply chain transformation strategy includes the use of robotic technology in its distribution centers.

Automation Kuntz also reviewed some specific automated solutions Gap is using in its distribution facilities. “There is a lot of automation in our distribution centers,” said Kuntz. “For automated store retrieval, we installed a robotic arm that scans goods and places them into a cubby. Then the cubby is lit green when it contains an item that needs to be retrieved.” Kuntz said Gap obtains significant labor benefits from this system, as the retailer now needs only four employees to work four shifts each, instead of the 16 that were previously required. “It mitigates labor risks, and we’re still hiring for jobs in other areas, such as maintenance technicians for the machines,” commented Kuntz. He also described how Gap utilizes the Exotec Skypod smart robotic solution to streamline returns processing at its Gallatin, Tenn. facility. “Today, returns are a manual process at most of our facilities,” said Kuntz. “We credit the customer and refurbish and resell the product. There is manual putaway and pull, with a random mix of up to 10 units per single box.” However, with the automated Exotec Skypod system, Gap places returned items in totes separated by dividers. For outbound pulls, Skypod automatically tells warehouse associates what cubby in a tote contains the needed product. “This results in a significant reduction in time to service and labor to service,” said Kuntz. Looking ahead, Kuntz said Gap will launch three additional distribution center projects in 2022. These include building a new greenfield campus in Longview, Texas, as well as adding capacity to existing facilities in Fishkill, N.Y. and Fresno, Calif. “The Greenfield site will have optional flow for the online channel and improve our service in the Southwest,” said Kuntz. “It will process an additional 1 million units per day. We’re adding 500,000 units of capacity each at Fishkill and Fresno, for a total of 2 million new daily units in the supply chain. We will also roll out the Exotec Skypod system to focus on returns in Fishkill and Fresno.”



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Supply Chain Resilience How to be a supply chain leader Supply chain problems have been much in the news as global disruptions cast a shadow on the upcoming holiday season and beyond. Peter Bolstorff, executive VP of corporate development for the Association for Supply Chain Management (ASCM), spoke with Chain Store Age about the many supply chain challenges retailers must overcome in order to succeed in the current market. What are the major supply chain challenges are retailers? Retailers, both traditional and e-commerce, are experiencing at least seven pressure points as we head into the 2021 holiday season. First is the competitive pressure of fast, free delivery. The big players have invested in owning their supply chain network and transportation routes and, as a result, can set the consumer expectation at the point of checkout, especially for those consumers that have joined their loyalty program. Next is the quality and position of inventory in Peter Bolstorff is executive VP the distribution of corporate development for network given the Association for Supply Chain the sustained Management. increase in consumers shopping online vs. in-store. There is also increased omnichannel pressure to innovate order, delivery and return models, such as curbside, home delivery, recyclereclaim and app-based order status. Retailers also face challenges with supply capacity, risk visibility, increasing costs, and delivery reliability – especially international sources of supply. In addition, there are are unpredictable delays with ocean freight, including container capacity, port congestion, weather disruption and the overall effect of stacked backlog stemming

from previous disruptions. Finally, retailers have to deal with labor constraints, including recruiting, developing and retaining employees, as well as with operationalizing corporate social responsibility and environment, social and governance commitments made by the corporation. How would you define supply chain resilience? We look at resilience in two dimensions: operational and strategic. Operational resilience is the supply chain’s ability to bounce back and recover to a normal state of affairs. Strategic resilience is the supply chain’s ability to bounce forward and adapt to a new normal. More than half of the retail industry has no formal playbook to deal with disruption. How can retailers become more resilient and leaders in their supply chain operations? Retailers that are leaders in the supply chain — as opposed to laggards — are the most connected to their customers and understand the level of sensitivity to delivery lead time and the price associated with it. Product availability will be the competitive differentiator. Loyalty programs will encourage preordering that come with substantial savings, such as ‘everyday Black Friday price.’ In addition, leaders do the following. • Sense demand patterns across channels and dynamically position inventory supporting e-commerce and store re-supply. At the same time, category managers have identified locally-sourced product substitution options for categories deemed a stock-out risk. • Leverage COVID-19 guidelines to introduce touchless delivery options, such as carside delivery and curbside pickup, and have accelerated innovations and digital investments in ‘self-service’ tools that are both app-based and POS. Leaders are innovating how to optimize returns and reverse logistics that support


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both the customer experience as well as help achieve sustainability goals. • Identify high-risk suppliers and have instituted dual — or more — sourcing strategies that prioritize agility over cost. Leaders invest in collaborative tools that help assess supply capacity, order status and/or delivery status. They develop tighter strategic relationships with select suppliers to assist with the entire product life cycle. And they utilize digital tools and risk playbooks to assess and mitigate both operation and strategic disruptive risks. • Change the line in the sand on what and how much to outsource. The idea of owning more of the supply chain puts retailers in more control over their short-term destiny. Recent examples include chartering a ship, adding your own private label, locally sourced products to the assortment, adding to your own transportation fleet and hiring your own drivers. • Keep pace with recruiting and retention trends, including signing bonuses, work hours flexibility and the promise of continuing education. Also, today’s consumers, especially Gen Z, are very concerned about how the products they used are made and sourced. Combine that with big corporate commitments for net zero by 2050, and leaders are focusing on how and where to operationalize sustainability in their end-to-end supply chain. The list includes prioritizing products and packaging that are more circular, investing in emission reductions that both reduce cost and save the planet and transitioning store footprints to carbon neutral. But what really sets leaders apart is the intentional effort to transform their culture from analog to digital. Investment in robotics, artificial intelligence, autonomous material movement, drones, smart devices and exoskeletal applications help associates use technology to make their jobs easier, safer and more productive.



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