We recently returned from Chain Store Age’s SPECS Show. SPECS is a show for the design, construction management, project management and facilities management departments within retail organizations, and focuses on what’s next and what’s shaping the future of retail as it relates to those departments.
A recent article in Retail Wire entitled “Is omnichannel cannibalization retail’s biggest challenge?”, quotes a report by eMarketer, where they conclude: “Despite efforts to increase their online sales and beef up their omnichannel strategy to meet the needs of smartphone-toting and social-media addicted consumers, these retailers are burdened by their physical stores, which still represent a majority of their sales.”
Franchises continue to be a hot opportunity for aspiring entrepreneurs, and a recent article in QSR Magazine confirmed this, indicating that millennials’ next frontier is franchising. The same characteristics that may have annoyed parents and traditional workplaces are well suited for this group who seek “authentic brands that fit their lifestyle”.
When I turned 40, I decided I wanted to run a marathon. Kind of interesting given I had never run anything more than a mile in my life, and that was over 20 years ago. I was intrigued by the magnitude of the accomplishment and thought I would give it a try – and it changed the way I feel about planning.
We all know that access to key data is critical to understanding shifting trade areas, cannibalization and competitive influences. In recent months, Paul Thompson has shared how the method of capturing data has moved from inefficient and expensive surveying, to capturing customers through mobile GPS, a quicker, and considerably more cost effective, approach. You can read Paul's two part blog here and here.
In this two-part blog, I will share some insights on how retailers are moving from the dark days of surveying to innovative and more accurate ways of capturing critical information about their customers.
OK, we’ve all been there. Can’t find any information on which intestore design was used for a location that was built 6 years ago? Don’t know the brand or number of tons of HVAC on the location built 15 years ago? What are the current prototypes and layouts across the 150 remodels you are planning to rollout this year? You may find some information in one system, but then will likely need to reference multiple other systems to hopefully find the remaining data.
The discipline of Quality Assurance started with the Industrial Revolution, and sometimes it feels like it hasn’t changed much since then. While software development has evolved over the years, QA took some time to catch up. The reality is that software quality is not a functional department anymore, but rather a culture change to an organization. Quality Assurance is, in fact, made of many components and many different aspects of testing. At Tango, we understand delivering high quality products is mission critical for us and our customers. As such, we have created and implemented a quality assurance structure which accounts for all of these components and have processes to address each one.
Just over a week ago we welcomed some of Canada’s best-known retailers to our Tango Leadership Series Roadshow. We launched the Tango Leadership Series last year as a way for real estate and store development executives to get together and discuss topics and trends that are dominating the industry.
The dust has finally settled on ICSC RECon 2016, and now that I’ve had a chance to catch my breath, I can honestly say in the sixteen years I’ve been attending, this year’s show was the most successful of my tenure. The next logical question is “why?” Why was this year’s show so great? Why did we have more meetings than any other previous ICSC? Why did those meetings have more substance than the usual “drive-by” appointments we’ve all experienced before?
In this post, I will discuss the importance of customer intelligence and cover a few strategies to make the most of your customer data. I’d like to start by sharing a brief story of what happens when you get this wrong.
Lease administration has always made me think of that famous fable, Goldilocks and the Three Bears. I’m sure you remember the story – and how Goldilocks was looking for an outcome that is “just right”. I think it’s a great analogy for how companies are evolving their thinking, learning from the missteps of the past and expecting more, and rightfully so, of their technology. Lease administration is not immune from that thought process.
Today’s most successful omni-channel retailers know that a customer’s interaction with their brand doesn’t begin and end with a visit to a brick and mortar location. They also know that not all omni-channel customers are created equally, and its more than just access (or lack of access) that fuels Ecommerce business. While traditional stores continue to account for the majority of most retailers’ transactions, Ecommerce continues to grow in double digits. Although the pace of growth slows for many retailers on a year-over-year basis, many retailers want to know what affect a new brick and mortar store location will have on Ecommerce sales. That question will be explored in this post.
Empty store fronts or an incorrect tenant mix hamper a retailer’s ability to maximize their investments. Retailers who want to attract new customers to increase sales growth and who are mall or strip center based and rely on heavy foot traffic to attract new clientele, are directly affected by a center’s occupancy. As such, it is critically important for these retailers to negotiate advantageous lease language surrounding co-tenancy.
Last week I had the pleasure of presenting at the 52nd Annual SPECS event. Hosted by Chain Store Age, the retail and restaurant show focuses on store design and construction. My session, Tablets Unlocked, centered on the increased use of mobile technologies in store development (see coverage here). This post recaps the highlights of my presentation.
Steve Wartecker’s recent blog about bringing back the mandatory long form census in Canada was bang on. Canada has long been a source of inspiration to other countries when it comes to gathering robust data from which policy decisions are based. But the need for understanding the distribution of small ethnic minorities and low and high income groups is not only important to government policy, but is of utmost importance to retailers as well.
For US public companies, the day has finally arrived. After almost 10 years of deliberations, 200 meetings and over 1,700 comment letters, Accounting Standards Update, ASU 842 – Leases has been released. This is the most significant lease accounting change in decades and understanding the impact is critical for all companies with significant lease portfolios.
Justin Trudeau was officially sworn in as Canada’s 23rd Prime Minister on November 4, 2015. There’s no question the newly elected Liberals must address a number of very challenging issues; the steep drop in oil prices further threatening an already weak economy, Canada’s role in the coalition against ISIS and the ongoing threat of climate change to name a few.
In the fast-paced, ever changing world of development projects, access to current and accurate information is key to making the proper business decision, approving changes and communicating to team members associated with the project. And while many entrenched processes and ways of doing things stand in the way of this, the implications of not dealing with the information effectively will not only negatively impact the success of the project, but also result in increased frustration and job dissatisfaction for project managers and other team members.
“The future is uncertain but the end is always near.”― Jim Morrison
Many of us remember the doom and gloom of Y2K – the momentous event when all software would stop working because it wasn’t prepared for the transition to the 21st century. Companies spent billions assessing the impact and developing replacement systems that would not only address the 4-digit year issue, but also ensure a similar situation would not occur again.
After several years out of the country, I had the opportunity to attend ICSC Whistler last week. Having spent the last four years in the UK, it was great to reconnect with past clients and friends. It was also interesting to see that some of the challenges faced by UK and European retailers are also prevalent in the Canadian market – such as the role of ecommerce. But, it was also a reminder that each market is unique.
There has been a great deal of talk about the need for reinvention in the retail sector in light of ecommerce, millennials, the weather, the dollar – you name it! CNBC’s posted that “It may be time for the bricks-and-mortar retailers to try something new.” And, Fortune recently came out with an article entitled “How American Department Stores are Fighting Extinction”. So, it’s not really surprising that at this month's National Retail Federation show, retailers are being “implored to reinvent themselves”.
Over the holiday season, I had time to reflect on balance: eating vs. exercising, family vs. work, spending vs. saving. Taking the theme of balance further, I reflected on implementations in 2015 and some of the key drivers on project implementations that tip the balance positively and negatively.
Collaboration with external parties is an essential component of both your real estate strategy and store development execution activities. That said, with any given project involving a variety of third-party providers, the process to manage this can be cumbersome and inefficient. Whether you are interacting with brokers, vendors, landlords, or franchisees the ability to connect and share critical information within a specific context and timeframe, helps streamline activities thus speeding up the process while providing transparency.
Last week, Tango had the opportunity to journey to Cannes, France – famous for its annual film festival - to attend and exhibit at MAPIC 2015. MAPIC is an international retail real estate show focused primarily on the European market. More than 20 years old, the show hosts about 8,400 participants, including 2,400 retailers. In light of the horrific events in Paris, we had real concerns – but really wanted to show our support. As a testament to the French people’s resolve and spirit, and an unwillingness to give into fear or intimidation, the show went off without a hitch.
Integrated Workplace Management System solutions, typically implemented after an ERP as the next level of technology required to manage the corporate footprint, have generally been considered a tool for tenants. They use IWMS to manage leases, capital projects, operations and facilities maintenance. However, increasingly we are seeing a rising demand in the market from Landlords who are seeking to employ technology to actively manage their properties and lower expense cost while increasing revenue.
For the past 25 years, SMU Cox has annually ranked the top 100 Dallas entrepreneurial companies based on sales growth over a designated period. The ranking is based on the largest percent sales increase and absolute dollar growth for 2012 to 2014.
Sales Forecast Models provide incredible benefit, but it’s also important to understand how to use and interpret them. Much is done to validate inputs, but if the site you are measuring is materially different than the ones used to produce your model, the results will be of little use.
Working with a wide variety of clients definitely means we’ve come up against many different workplace cultures. While we could sit around and argue about which cultures are better aligned to project success, as consultants, our role is to get a deep understanding of your inherent culture and try to work within it – and affect change where we think it’s possible and where we believe it will be for the good of your organization going forward.
We recently released a white paper entitled Making Store Lifecycle Management Intelligent. The white paper illustrates the importance of setting your real estate and store development strategy and executing against it – and that the relationship between strategy and execution is mutually-dependent. You can set a plan and execute against it – but if you fail to take lessons-learned in the field and factor them into your strategy going forward, you are truly missing an opportunity to improve.
In our recently published White Paper – The 8 Myths of SLM & IWMS Implementations we explore the most common myths that many customers face when exploring SLM and IWMS implementations, and contrast them with the reality of the situation.
In my previous blog, Demographics in International Markets: Challenges and Opportunities, I examined the first of two important factors that affect the quality of demographics in international markets, the geographic unit. Another important factor in GIS analysis of retail analytics is the demographic variable. When sourcing demographic data, the first question all retailers ask is “how big is the geographic unit?” followed quickly by the second question “what variables are included in the data?”.
Managing Real Estate Data
Managing real estate data has never been more important, particularly in light of the looming FASB lease accounting changes. As highlighted in this article by Lisa Stanley, the active management of real estate data “…starts with a constructive collaboration between owner/occupiers, service providers, software developers, and others to identify needs and build a plan. Information management systems have often been cobbled together, with multiple platforms that don’t communicate and lack of consistency in data terms and definitions.”
In the 1950’s it was Sears. McDonald’s in the 60’s. In the 70’s it was Burger King, Wendy’s and 7-11. Toys ‘R’ Us, Costco, Starbucks and The Gap in the 80’s and Home Depot and Wal-Mart entered Canada for the very first time back in the mid 1990’s. These are some of the key American retailers that helped pave the road north of the border. With the exception of Sears, these retail pioneers are still relevant and thriving in Canada today.
Recently, Tango Analytics announced an exciting partnership with UberMedia. This partnership will provide retailers with information and analysis, using UberMedia’s mobile data points, to identify customers and their trip patterns centered on their visit to a store location.
Everyone that spends capital begins with making a case for the resources they need to deliver on their part of the growth plan. Their primary goal is to first get what they need and then to execute their programs within budget. The role and goal of most of the departments involved in real estate and store development that require capital is generally clear and understood:
I’ve recently returned from my 15th ICSC RECon show. Last year was the first year since the 2008 downturn that I started to witness a positive shift in attendance and energy, and I’m pleased to report that the momentum continued in 2015. ICSC estimates 35,000 real estate professionals attended this year’s show, the highest since 2008 - and from our perspective, it was the best year ever.
In my first post entitled “Before you go after low hanging fruit, pick up the ones already on the ground…”, I made the case for tracking the ways your company uses your real estate, as well as the status of any and all activities that affect it, in a central location. As discussed, centralization is helpful to organizations because any department’s action on real estate often indirectly affects many others.
In just over two weeks we’ll be at ICSC RECon asking retailers to assess their Store Lifecycle Management IQ. While on the surface this may seem like a peculiar exercise, its foundations are based on some real issues that retailers are facing.
Recently, I came across a paper by Todd Little entitled, 'Schedule Estimation and Uncertainty Surrounding the Cone of Uncertainty' and was intrigued by the findings. As an expert in agile software development and a member of the board of directors of the Agile Alliance, Mr. Little provides extensive mathematical analysis of projects completed while working at Landmark Graphics, and concludes that even seasoned project leaders provide estimates which typically fall significantly below actual results. He attributes this to a Cone of Uncertainty - a variety of unknown factors at the start of the project, including resource availability, unanticipated requirements and corporate cultures.
When deciding what markets to enter and where to select sites, retailers cannot ignore the importance and influence of demographic analysis -- and that’s relatively easy in the US. Retailers can turn to the Census Survey, the American Community Survey, as well as offerings from well-established private companies to secure quality demographic data at relatively low cost. However, this is simply not always the case in other markets. In fact, as they start to look beyond the US for growth opportunities, retailers start to run up against significant challenges related both to the quality and accessibility of the demographic data – and this is particularly true in emerging markets.
Focusing on technology will not help you unleash the full potential of Store Lifecycle Management (SLM) and Integrated Workplace Management (IWMS) solutions. You need to understand how to strategically apply technology, in order to quickly achieve operational improvements and ROI. This only comes with experience and a fundamental understanding of the underlying business.
The project manager at a major retailer was tracking a significant list of items that had to be completed before the store could be turned over to Operations. Once turned over the Operations, the planned opening was one week later. Since obtaining the business license is a responsibility of the Operations department and not of Project Management, it didn’t appear on the project manager’s checklist. While the store was turned over to Operations on schedule, there was no business license in place – a process that takes 90 days to complete. The store sat dormant for 90 days – and not only was there the issue of lost revenue, but the retailer had to hire a security guard to ensure that the over $300,000 worth of equipment sitting within the store was safe.
STI Pop Stats Research Conference in Austin has grown into a premier event for retail location researchers who really want to get “into the weeds” and discuss best practices, techniques, and processes to provide actionable research to their respective companies. I had the opportunity to speak once again at their 10th annual conference on the topic: Beyond the Sales Forecast: Other Ways to Enhance the Store Portfolio.
It is hard believe that simply moving a location from one end of a strip center to another would increase sales by 50 percent, but that is exactly what happened to Dunkin’ Brands as reported in the Boston Globe. Dunkin’s experience is just one example of how real estate and store development is moving beyond the execution-focused functionality of traditional IWMS and SLM systems to one driven by location strategy, GIS and predictive analytics.
As highlighted in FSR Magazine, Del Frisco’s Restaurant Group recently reported strong quarterly revenue growth and sees robust future expansion opportunities for Del Frisco’s Grille based on predictive customer and location modeling done by Tango Analytics.
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