Retail Merchandiser July~Aug 2016

EDITOR’S LETTER

Face to a Name

I was fortunate enough to attend the 36th Licensing Expo this past June in Las Vegas, along with more than 16,200 other attendees from all over the world. I walked the expansive exhibit hall to see all the big-name brands with their vibrant, gigantic booths from Hasbro and Mattel to DreamWorks and Nickelodeon. I met celebrities such as Shaq, who is even taller in person, and Grumpy Cat, who is even cuter in person. Costumed characters paraded through the exhibit hall, such as the Teletubbies, the Hungry Caterpillar and some Ghostbusters, but the velociraptor mascot was the most thrilling to encounter in the exhibit hall; it was so lifelike that it was almost scary (in a good way)!

The most exciting thing was putting a face to the names of some of the companies we’ve featured in past and current issues, such as Beat Bugs, ScottsMiracle-Gro and Steve Jackson Games. We gave Facebook Live a whirl for the first time, but with so many people around, we decided to just film videos instead. If you check our social media pages, you can see some of them – and you, too, can put a face to the names of some of our featured companies from this and past issues.

And last but not least, I got to meet and spend time with the folks behind our cover story this issue: Retail Monster. Michael Connolly, founder of Retail Monster, introduced Retail Merchandiser to his team and shared some of the plans the company has in store for licensing, retail and marketing for a variety of big brands. But you can read all about those plans in this issue, as well as what Retail Monster’s new partners are planning. A+E Networks – known for providing breakthrough television programming such as “Wahlburgers,” “Bring It!” and “Ancient Aliens” – is breaking into live entertainment licensing, while Entertainment Retail Enterprises offers one-stop shop

“Whatever your industry focus, you won’t want to miss out on this issue.”

retail solutions to brings brands to life.

Coupled with its partners, Retail Monster is a company poised to do great things for the industry.

But that’s not all in store for this issue.

With both MAGIC/FN PLATFORM and NACDS Total Store Expo on the horizon for later this summer, this issue is chock full of fashion, pharmacy and supplier company profiles. Readers will find Paul Frederick, Tom James and Great Clips in the MAGIC section and Smith Drug, HomeTown Pharmacy and Benzer Pharmacy in the NACDS Total Store Expo section. In addition, this issue features an enormous retail-focused section with companies such as 7-Eleven, Marsh Supermarkets and Waters True Value.

Whatever your industry interest and focus, you won’t want to miss out on this issue. Whether you’re kicking back and perusing the issue at home on a relaxing summer day or picking your copy up at a tradeshow, the RM team hopes you enjoy this month’s issue. And, as always, don’t forget to follow us on Facebook, Twitter, LinkedIn and Instagram for additional industry news and live coverage of tradeshows and other events.

Stephanie Crets Editor-in-Chief

EDITORIAL -------------------------------------------------------------------EDITORIAL DIRECTOR John Krukowski john.krukowski@retail-merchandiser.com (312) 676-1125 EDITOR-IN-CHIEF stephanie.crets@retail-merchandiser.com

Stephanie Crets (312) 676-1264

EDITORS Staci Davidson, Alan Dorich, Russ Gager, Jim Harris, Janice Hoppe, Tim O’Connor, Chris Petersen, Eric Slack DESIGN ----------------------------------------------------------------------ART DIRECTOR Erin Hein erin.hein@knighthousemedia.com (312) 676-1136 DESIGNERS Joshua Beaudry, Jonathan Lyzun, Vida Soriano PRODUCTION ---------------------------------------------------------------PRODUCTION COORDINATOR Michelle DeCeault michelle.deceault@knighthousemedia.com (312) 676-1178 SALES ------------------------------------------------------------------------PROJECT COORDINATOR John Conroy john.conroy@retail-merchandiser.com (978) 299-9814 PROJECT COORDINATOR stephen.pastorello@retail-merchandiser.com

Stephen Pastorello (978) 299-9811

PROJECT COORDINATOR tony.pelonzi@retail-merchandiser.com

Tony Pelonzi (978) 299-9815

PROJECT COORDINATOR rocky.pisa@retail-merchandiser.com

Rocky Pisa (978) 299-9810

PROJECT COORDINATOR jay.purcell@retail-merchandiser.com

Jay Purcell (978) 299-9873

EDITORIAL RESEARCH -----------------------------------------------------PRESIDENT Joy Francesconi joy.francesconi@retail-merchandiser.com (978) 299-9870 VP EDITORIAL RESEARCH amy.ingoldsby@retail-merchandiser.com EDITORIAL RESEARCHER michelle.fontaine@retail-merchandiser.com

Amy Ingoldsby (978) 299-9862 Michelle Fontaine (978) 299-9875

EDITORIAL RESEARCHER anne.gray@retail-merchandiser.com

Anne Gray (978) 299-9872

EDITORIAL RESEARCHER judy.kushner@retail-merchandiser.com

Judy Kushner (978) 299-9866

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@RMmagazine Knighthouse Publishing 100 Cummings Center, Suite 250C Beverly, MA 01915 July/August Volume 56, No. 4 is published by Knighthouse Publishing, 79 W. Monroe, Suite 400, Chicago, IL, 60603. POST MASTER: Send address changes to Retail Merchandiser 79 W. Monroe, Suite 400, Chicago, IL, 60603. CANADA POST: Return undeliverable Canadian addresses to Knighthouse Publishing, 7496 Bath Road #2, Mississauga, ON L4T 1L3.

July/August 2016

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CONTENTS | July/August 2016 COVER STORY

5 CATEGORY INSIGHT

Millennials are a key market for fashion retailers.

6 THE AGE OF MARTECH Marketing technology can offer several solutions for retailers, but the hardest part is determining the best way to use and integrate it.

8 MEETING RETAILER

AND CONSUMER PRODUCT DETAIL EXPECTATIONS Detailed product information can make or break a sale in today’s online and mobile commercedominated retail world.

10 THE REAL VALUE OF

KICKSTARTER Crowdfunding matters to modern commerce and, especially, to the millennial generation.

19 FN PLATFORM

PREVIEW FN PLATFORM gears up for a landmark show this August.

14 Retail Monster works closely with its partners, A+E Networks and Entertainment Retail Enterprises, to meet licensing, retail, sales and marketing needs for brands and franchises across a variety of categories.

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UPFRONT 12 KATHY DAVIS STUDIOS Kathy Davis Studios designs greeting cards and gift products that feature hand-painted art and inspirational messages to connect with the end-user.

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REPORTS 20 Paul Frederick

38 NetElixir

42 Forever Companies

For 30 years, Paul Fredrick has designed, manufactured and directly distributed every item in its collection, which helps to grow its base of satisfied customers.

NetElixir develops digital marketing solutions that account for the human factor above everything else.

Forever Companies focuses on building a solid foundation to handle further growth as awareness of man-made stones increases.

40 Hanky Panky

44 Great Clips

Hanky Panky’s intimate apparel for women is known as much for its comfort as for its fashionable designs.

Leveraging technology and providing support to franchisees help Great Clips provide hair care services across North America.

24 Advance Packaging Advance Packaging’s Build A Bag™ Program gives formalwear boutiques and national retailers the opportunity to make their garment bags truly stand out.

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26 Tom James Founded in 1966, Tom James manufactures custom suits from high-quality materials and comes to its customers to find the perfect fit while providing excellent customer service.

29 Tradehome Shoes After more than 95 years, Tradehome Shoes strives to provide ‘the most enjoyable footwear shopping experience’ and ‘the right style with the perfect fit’ for its customers.

32 Shiekh Shoes With more than 130 stores throughout the West Coast and Southwest, Shiekh Shoes is focused on knowing the minds of its target customers and putting the assets in place to reach them.

36 Rally House Rally House offers an array of sports merchandise and carries local novelties and regional-inspired apparel, gifts and food in its stores in cities where fans live, work and cheer.

48 Smith Drug

52 HomeTown Pharmacy

56 Benzer Pharmacy

Smith Drug Co. is transitioning from wholesaler to a complete provider for independent pharmacists through investments in cloud-based inventory management systems.

Family owned and managed HomeTown Pharmacy is growing its number of locations with a variety of services including specialty prescriptions and pharmacies.

Benzer Pharmacy offers independent pharmacies the opportunity to become franchises, giving them the support of a larger organization and access to a wider market presence.

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REPORTS

Retail 60 Victoria Fine Foods

94 Waters True Value

Victoria Fine Foods creates premium pasta sauces that meet the lifestyle needs of its consumers.

Waters True Value does not let its history or family ownership keep it from innovating with new products, methods and layouts.

63 Weigel’s Weigel’s is updating its stores for millennials while holding onto the old-fashioned service and community involvement that customers expect.

66 7-Eleven 7-Eleven is teaching its franchisees how ordering impacts distribution and cost.

70 Bolla Oil Bolla strives for perfection in its stores.

74 Marsh Supermarkets Marsh Supermarkets is poised to build off a strong legacy.

85 Altmeyer’s Bed,

100 Carter’s Supermarket Strong personal belief, as well as a philosophy of customer service and employee satisfaction, guides Carter’s Supermarket’s owners.

102 Tobacco Superstores Tobacco Superstore has become one of the largest cigarette and tobacco retailers in the United States.

104 The Great American

Home Store

The Great American Home Store goes to great lengths to ensure its customers are happy, including going beyond manufacturers’ warranties.

106 Kenyan Enterprises

Bath & Home

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SOLUTION PROVIDER DIRECTORY 122 IBM IBM offers streamlined solutions personalized to help retailers transform their businesses and deliver a superior shopping experience.

Altmeyer’s Bed, Bath & Home has grown to serve the greater Pittsburgh market.

Kenyan Enterprises, operator of 17 Piggly Wiggly and Save-A-Lot locations, is upgrading and remodeling them to drive more customers inside.

88 Brother’s Food Mart

108 Tommie Copper

Brother’s Food Mart has won rave reviews for its famous fried chicken.

The Tommie Copper brand of compression garments is creating a new category for wellness.

Linear Retail Properties accelerates its acquisition rate over the past year with a dozen new retail property purchases.

91 The Hartley Co.

110 America’s Food Basket

128 FMH Conveyors

Ohio-based convenience store operator and supplier The Hartley Co. remains strong after 140 years with 40 locations.

America’s Food Basket is growing on the foundation its CEO Dan Cabassa laid for the company in 2012.

FMH Conveyors is centralizing its three U.S. manufacturing operations into one new location in Jonesboro, Ark., to gain synergies in manufacturing and engineering.

Supplier 114 MEGA Group USA

116 Innocor

MEGA Group USA helps retailers buy better, increase traffic and strengthen profits through its membership services.

Innocor is using its supplier relationships and customer knowledge to drive innovation in the flexible foam mattress market.

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124 Linear Retail

Properties

130 Sedlak Management

Consultants

Sedlak listens to retailers’ supply chain needs and recommends effective methods without bias.

136 Solution Provider

Directory

CATEGORY INSIGHT

Millennial Purchasing Power

As the largest generation in the United States, millennials have the buying power and influence that retailers can’t ignore. BY STEPHANIE CRETS The millennial generation tends to have a negative reputation for being lazy and obsessed with social media. But retailers should not be underestimating them – especially their purchasing power. According to Advertising Age, millennials are expected to spend more than $200 billion come 2017 and $10 trillion in their lifetime. That’s not a small number by any means, especially considering they make up 25 percent of the U.S. population. Retailers should be taking a closer look at how to cater to such a large generation that has influence over trends, how to shop and where to shop.

Many retailers were shocked when a survey of 175,000 millennials found that millennials preferred shopping at big-box retailers Walmart and Target more than other niche stores. But this shouldn’t come as a surprise because this generation is buried in student loans and even working several jobs at a time, while some are starting families. They

may not have the means nor the time to shop at niche retailers.

“That kind of shocks a lot of people, including inside the company,” said Walmart Chief Marketing Officer Stephen Quinn in an AdAge article. “As millennials become time-crunched with relationships and kids coming along, it’s opening up a strong need for them to have a one-stop shop.”

Regardless of how much money millennials actually have to spend, the fact is they’re still constantly shopping, especially millennial women. They’re looking for deals, using their smartphones to compare prices and check reviews on social media and embracing loyalty programs to save money. Fashion is still one of the growing markets for this demographic, almost directly tied to the power of social media and online shopping.

The women’s clothing market is expected to increase by 14 percent through 2019, while 67 percent of millennial

women purchased clothing online, according to a report by Mintel. The same research also concluded that social media ad revenue is projected to hit $15 billion by 2018 – a large portion of that from women’s clothing retailers.

“The importance of social media must be underscored, especially as a way to connect with young women,” said Diana Smith, senior retail and apparel analyst at Mintel. “With one third of millennial women visiting sites like YouTube and Instagram on a daily basis, clothing retailers should harness the power of social media to further engage these impressionable, influential and savvy shoppers.”

It’s clear millennials’ buying power and influence in the retail world is only growing. Retailers should take note and embrace their habits through social media engagement, offering countless deals and rewards to entice these discerning shoppers and making it easier than ever to shop online in today’s busy world. O

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BEST PRACTICES FOR RETAILERS

The Age of Martech Marketing technology can offer several solutions for retailers, but the hardest part is determining the best way to use and integrate it. BY PEGGY CHEN

Having the right technology is mission critical to competing in today’s global retail market.

Scott Brinker’s 2016 marketing technology supergraphic cites 3,874 different martech solutions on the market. With so many options available, how can retail marketers determine where to focus? What’s most important: personalization or global content? Mobile or social? When it comes down to it, it’s all about what will encourage customers to complete the buying cycle. Here are some tips for how to make that happen.

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Create and Distribute Compelling Content Content marketing has grown in popularity for good reason – it works.

Websites, e-mail blasts, blogs and research all help retailers reach their audience more effectively and ensure they’re satisfied with their purchases and brand experience.

When it comes to publishing, drafting compelling content is the easy part. For this content to be impactful,

it’s essential to know how and when to push it out to customers.

Reaching shoppers where they are and at the right time often means the difference between a conversion and a click away to a competitor’s site. Marketers need to have easy-to-use publishing tools in place that can distribute content across channels and platforms to meet consumers at the right place and the right time, whether that’s on a mobile device, a company blog or through any other channel.

Encourage Completed Buying Cycles for Customers Research shows that consumers are willing to share personal data as long as companies use it to tailor their offerings based on individual preferences. For example, consumers are more likely to agree to having their past purchase data aggregated and analyzed if it means retailers will use it to offer more personalized product recommendations. If customers feel that a brand understands them and their personal preferences, they are more inclined to complete a purchase, especially online.

By offering personalized communications and recommendations, organizations can step up customer experiences and will see the return in the form of more conversions and loyal customers.

Localize Global Content Even amidst a large international audience, it’s essential to take into account each customer’s specific location and language preferences. In fact, 32 percent of millennial consumers in English-speaking countries prefer a language other than English. And 46 percent of consumers are more likely to make a purchase if information is presented in their preferred languages.

This means that to connect with a majority of consumers, content must be translated into the appropriate languages and tweaked for cultural nuances.

Content that reflects things like local

“Marketers need to have easy-to-use publishing tools in place that can distribute content across channels and platforms. holidays, the end of a school year or local events all create a local connection – retailers who provide this are one step closer to earning loyal customers.

Marketers should make sure they can quickly and accurately translate and create local content in real-time so that no market feels left out.

Integrate Efforts It’s not just about having the right tools in place to create positive customer

experiences. It’s also about ensuring that all these tools work together in a way that helps to provide a seamless experience. Developing multilingual content ecosystems is a great way for marketers to create content, translate it and publish it on a global scale without significant extra time and effort.

It’s an exciting time for retailers with all the new tools available to them, but it’s important they know which ones will benefit them most. Without the right tools working together, content will not be leveraged to its full potential and certain markets and customers will miss out – which ultimately means retailers miss out.

Having the right technology to create, distribute, translate, personalize and localize content is mission critical to competing in an increasingly crowded global retail market. O Peggy Chen is VP of marketing at SDL. July/August 2016

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CONSUMER PRODUCT EXPECTATIONS

It’s in the Details Detailed product information can make or break a sale in today’s online and mobile commerce-dominated retail world. BY PETER ZABALLOS With the growth of mobile platforms, consumers have the ability to shop when, where and how they want.

That’s good news for retailers that understand how product details drive sales and build brand loyalty. There’s a wealth of research that confirms this, so if you still think less is more, think again.

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Today’s consumers expect product details that go beyond size and color, which is why retailers are now pushing suppliers to provide more item information. Details drive digital. Digital drives sales. According to a recent Think with Google article, $1 trillion of retail sales were influenced by product searches. No wonder the No. 1 priority for retailers in 2016 is improving item attributes from suppliers.

Here are seven tips for writing and delivering detailed digital product content that sells:

1. Know your audience.

Develop consumer personas. Instead of talking generally, give consumers names, families, ZIP codes, occupations, hopes

and dreams and even a few problems.

Hang this information and persona photos on your office walls. Create cardboard cutouts to attend meetings.

Address your personas directly, using words they use. Answer their common questions without waiting to be asked.

You can even go a step further by writing scenarios and short stories that paint a vivid picture of what your personas lives are like and how they are hoping you can help them. Think of these scenarios as conversation starters.

“I want to buy a new refrigerator, but it needs to fit into a small space.” “My child is allergic to peanuts. What ingredients are in this product?” “My mother turns 80 next month and is going to Eu-

Retailers need to not only be concise in their product descriptions, but also cover all the most important information.

benefits answer the question, “What’s in it for me?” “Two back-up alarms” is a feature. “Around-the-clock security and peace of mind” is a benefit.

3. Help the buying decision.

rope to celebrate. Which pair of walking shoes will be best for her?”

Also consider how your consumers want to receive information. Depending on the product, they may prefer written descriptions, detailed diagrams, in-depth videos or a combination of all three.

And remember: you’re not the only source of product information. Customer reviews are also important.

2. Talk benefits.

Don’t just rattle off your product’s features. Also use active, sensory language to describe the benefits consumers will experience. This two-prong approach engages both parts of the consumer brain: the logical, fact-focused left brain, as well as the emotional right brain.

When communicating benefits, I like to start by reminding myself of what marketing guru Theodore Levitt once said: “People don’t want to buy a quarter-inch drill. They want a quarter-inch hole.”

So what’s the difference between features and benefits? Features describe the physical nature of your products, while

Useful facts and stats, real-life stories and product awards all work wonders when it comes to making your products stand out from those of competitors. So do great product descriptions. When writing these descriptions, lead with your main point – the one most important to consumers, that is – then add supporting information in order of relevance.

Be sure to include all the information shoppers need: the loft of a golf club, the weight of a laptop or the dimensions of a refrigerator are all important factors that can sway a consumer’s purchase decision. Side-by-side comparisons that show how products compare to one another can be a big help as well. So can product reviews.

4. Be consistent.

Describe your products in roughly the same way and in the same order to make it easy for shoppers to compare. For instance, write an engaging headline, followed by a sentence or two that helps consumers picture, taste, touch, smell or even hear your product (even if what they hear is the silence of your “significantly quieter” blender). Then provide a bulleted list of product benefits, followed by product reviews.

By providing consistent information in a similar and scannable manner, you make it easy for shoppers to find the “chunks” that are meaningful to them.

Consistency is also the key to customer satisfaction. According to a McKinsey & Company study of 27,000 American consumers, a consistent customer experience – across the entire customer journey – builds trust and boosts loyalty.

5. Cover the details.

If there are questions shoppers ask when in your stores, make a point of

answering those questions online. Here are some of the most common product details shoppers have questions about: • Product specs • Technical specs • Available colors, sizes, flavors, etc.

• Ingredients and allergen information • Whether the product is manufactured domestically or imported • Care/usage/assembly instructions, including whether batteries are required and/or included • Environmental features

6. Be concise.

Twenty-seven seconds – that’s the average attention span of shoppers. So use simple words and short sentences.

Keep product descriptions under 150 words. Also think “grab n’ go” by using bulleted lists. In this digital age, product details truly are the secret to success. So do your bottom line a favor by amping up your product descriptions. Not sure where to start? Read your customers’ reviews. They’ll tell you what product details matter most.

7. Get serious about SEO. If you want your products to be found, you need to take key words seriously.

What are the words and phrases people type into search engines when looking for your product? Whatever they are (if you don’t know, ask your customers), be sure to keep them in mind when writing headlines, product descriptions, title tags, image alt tags and more.

Keeping these seven tips in mind will help ensure you meet – and even exceed – growing retailer and consumer expectations for product detail. O Peter Zaballos is chief marketing officer and senior vice president at SPS Commerce, which is helping retailers and their trading communities meet retail and consumer product detail expectations by using the industry’s most broadly adopted retail cloud services platform. Share your digital retail insight with Peter at @peterzaballos.

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THE REAL VALUE OF KICKSTARTER

The Best Is Yet to Come

Crowdfunding matters to modern commerce and, especially, for the millennial generation. BY STEPHANIE SCHOCH It’s hard to say in financial terms how much Kickstarter is worth based on all sorts of revenue projection.

Whether it’s the more conservative approximation of $200 or the more generous forecast of $1.5 million, one thing is certain: Kickstarter’s value to those who use it well can mean a whole new life and the realization of a dream. Of those who dare to take their ideas to potential Kickstarter backers, statistically, few ever “kick” off — but those who do often experience tremendous success.

Crowdfunding sites like Kickstarter are about the people and for the people, so when consumers see something they wish was more widely available, they have the option to gift a little to help out companies like Peak Design – which 10

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has 17,029 backers who have pledged $4,869,472 to Peak Design’s Everyday Messenger Bag campaign.

The essential factor here is that people rather than large retailers select what they like and support it, not unlike how they might vote for their favorite singer on a television show. The proof is in the numbers — and the tremendous growth of Peak Design is the perfect example of this: one guy went on a trip around the world and decided to fill a void where no large corporate entity saw one. This singular Kickstarter campaign by Peak shows that people support what they like, cost isn’t an issue when they know what they’re getting is a high-quality good and young consumers want to support small businesses by any means possible. Today, that channel is absolutely crowdfunding.

Those who understand crowdfunding know: it’s not about the size of an enterprise, but rather the promise they make and how valuable it is to them.

Big-box retailers and department stores can’t or won’t offer subscriptions like the ones Nice Laundry offers because it would mean a complete change of infrastructure for supply chain and product management, and would likely cost too much to implement in any efficient fashion. Two thousand backers have pledged $119,321 to Nice Laundry.

With new collections available from its Kickstarter page, founders Ricky Choi and Phil Moldavski are obtaining more

July/August 2016

backers and subscriptions regularly.

The promise of a delivery every few months — or with other crowdfunded companies, every few weeks, or whenever you like (such as Thrive Market or Chewy.com) — excites busy, double-income heads of household who don’t have time to drive around looking for what they need.

Earth-conscious folks like to dig around the Internet for what they want, but more frequently than ever before, they’re steering clear of sites like Amazon.com, Walmart.com and Target.com. com. Instead, these eco-savvy shoppers are looking for products in the form of causes they can get behind. This frequently leads them to crowdfunding sites like Kickstarter. And others of the same caliber can offer up fresh ideas,

Crowdfunding sites like Kickstarter can mean a new life and the realization of a dream for those who dare to offer their ideas to backers.

new technology and better ways of doing everyday things.

For example, 8,559 Kickstarter backers have pledged $3,126,114 to Nebia Shower, proving that saving water is a consumer priority. The Nebia Shower saves thousands of gallons of water per year, making it not only cool and relaxing, but a true asset to the management of our planet’s resources. By using 70 percent less water but counterintuitively covering 10 times the surface area of other shower heads, Nebia Shower means advantages in two places: your bathroom and your checkbook.

Beyond Bags, Socks and Showers Millennials and Gen Z (also known as the iGeneration), are famously and

infamously grassroots and supportive of local and small businesses, startups and entities that recycle, upcycle, repurpose and otherwise reuse materials to make their wares. Sites like Etsy and crowdfunded projects appeal to their innate desire to buy organic and protect local and global environments.

When millennials and iGeneration consumers buy, they search crowdfund sites like Kickstarter for two key reasons.

One, they want to be part of what will make the world a better, safer, easier place to live. Quality and not quantity are attractive to them. Buying a genuine article like Peak Design, Nice Laundry or Nebia, among others, is part of their core value system. And two, these young people want to buy outside the established economy and support enterprises

that show real promise for the future. In fact, millennials and some older iGeneration members are themselves the progenitors of a great many crowdfunded projects, including The Millennial Trains Project, BudStraps and the multiple products from 23-year-old Kickstarter superstar, Steven Elliot Ng. If it fights global warming, lowers the cost of living, makes a donation to underprivileged people in the United States or abroad and/or has an established, consistent social media presence (including regular updates on crowdfunding sites) to keep them informed, consumers under 30, and especially those under 24, will want to be a part of helping crowdfunded projects, especially those that add value to their lifestyle. O

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Upfront

Sarah Van Aken, president and COO www.kathydavis.com Horsham, Pa.

KATHY DAVIS STUDIOS

One of a Kind Kathy Davis Studios strives to help people ‘feel good every day.’ BY ALAN DORICH Kathy Davis Studios designs greeting cards and gift products, but it also makes connections to the end-user, President and COO Sarah Van Aken says. “There is something [in our products] that resonates with people in the idea of creating a life you love,” she says.

The company’s greeting cards are sold in 60,000 stores, and its lifestyle products are carried in 20,000 stores.

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Founder Kathy Davis started the Horsham, Pa.-based company 26 years ago out of her bedroom. “She was a divorced mom of two and she wanted to follow her dream of becoming an artist, and creating a life she loved,” Van Aken explains.

Over time, Davis grew her company into a lifestyle brand with home and wall décor, bedding, bath, and stationery and calendar products. “That was 400 million greeting cards ago,” Van Aken says, noting that Kathy Davis Studios now has 30 people at its location in Horsham.

The company’s greeting cards are carried in 60,000 stores, and its lifestyle products are sold in 20,000 retail locations.

“We have a unique place in the market,” she says. “We are very well known for the combination of expressive hand-painted art and inspirational messages.”

Davis is skilled at both and has developed a team that emulates the mission to inspire others to create a life they love, Van Aken says. “The culture here is one of a kind. I don’t know that I’ve ever worked in such a creative, inspired environment.”

The company also has a branded, four-foot greeting card section in 10,000 locations nationwide through its partnership with American Greetings.

“In that branded statement, there is a row of nine full-frontal facing greeting

KATHY DAVIS STUDIOS

cards where the entire profits – from American Greetings and Kathy Davis Studios – go to the National Guild for the Arts,” Van Aken says.

Shifting the Brand Van Aken joined Kathy Davis Studios two years ago, after working primarily in the fashion industry. “I really wanted to build brands and was introduced to Kathy,” she recalls. “I knew right away that I understood her aesthetic.”

The company has evolved under Van Aken’s leadership.

“Before my arrival, the focus was on developing licensing relationships,” she explains. “[Now we] are in the middle of shifting our focus to developing relationships with our consumers.”

This will benefit Kathy Davis Studios’ partners and retailers, Van Aken says. “It’s a comprehensive approach that includes everything from brand campaigns to social media PR,” she explains. “We want to get to know our customer in a personal way and help her create a life she loves.

[We’re] opening the dialogue about what she is looking for and offering her meaningful tools to achieve it.”

The firm also partners with those “who are lifestyle leaders in various different dimensions, whether it’s an interior designer or a yoga instructor,” Van Aken says. “We work with them to introduce Kathy Davis to the rest of the world, and that’s one small piece of where we’re taking it.

We have exciting stuff coming up.”

“

Upfront

I don’t know that I’ve ever worked in such a creative, inspired environment.

”

in the mission,” she says. “I believe in inspiring people to create a life they love every day. If we can help people feel good every day, that’s incredible.”

She also praises the staff, which includes a mix of young associates and veterans who have worked for the company for decades. “It’s a family of people,” Van Aken says, noting that employees take the time to celebrate birthdays or other events in each other’s lives. “It’s really a special place.”

Kathy Davis Studios plans to grow further as a lifestyle brand, Van Aken says. The company will keep helping “people create a life they love, and foster connections between people, whether it’s in their home, or for their wedding or for their baby,” she says. O

Streamlined Systems The greeting cards industry has changed drastically over the past 26 years, which has made Kathy Davis Studios’ partnership with American Greetings more essential. “When we went on board with them eight years ago, much of what we did was hand done,” Van Aken says. “It wasn’t integrated.

“American Greetings has helped support us in transitioning to a much more streamlined technology,” she continues. “Their product lifecycle management also has given us a knowledge base about our product, and why and what is selling.”

Although Kathy Davis Studios has updated many of its techniques, it prefers to rely on some tried-and-true methods. “We still paint images by hand and then scan them,” she says.

The company also plans to keep developing its e-store on its website. “We’re reformulating how it works,” Van Aken reports. “It’s becoming a much more central part in the year ahead.”

A Special Place Van Aken takes pride in her work at Kathy Davis Studios.

“The thing that gets me here every day is that I believe July/August 2016

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COVER STORY

One-Stop Shop for the Best in Class Retail Monster works closely with its partners including, A+E Networks and Entertainment Retail Enterprises to meet licensing, retail, sales and marketing needs for brands and franchises across a variety of categories. BY STEPHANIE CRETS

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RETAIL MONSTER

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ndless opportunities abound in the world of licensing, retail, marketing and sales – more than most brands can even imagine, in fact. But that’s where Retail Monster comes in to assist brands, retailers and licensors looking for solutions for brand extensions, licensing opportunities and preferred suppliers.

Launched this past March, Retail Monster operates out of strategic locations near big retailers in Los Angeles, New York City, Chicago, Orlando and Bentonville, Ark., with plans to expand to Minneapolis and internationally next year.

Retail Monster does more than licensing a brand before bringing it retailers. In fact, it does the reverse approach and brings brands to retailers as a pitch to generate excitement on the front-end, which makes licensing easier overall. It has also found that suppliers who sell intellectual property-based products are skilled at selling those products but struggle when pitching the brand behind them. Retail Monster, however, is more than comfortable helping a supplier pitch their products to retailers and linking brands with suppliers, licensors and retailers.

“We have a unique ability so sell brands to retailers and suppliers through brand ambassadorship,” CEO and founder Michael Connolly says. “What we offer in addition to that really rounds out our vortex. Our key differentiator comes in the sales and marketing services. The most important thing is we’ve decentralized our structure; we haven’t built one big infrastructure anywhere. We can be in front of retailers to pitch within the day and that’s the game-changer. Selling true products and licensing big brands give us a distinct advantage.”

Having worked with some of the biggest brands such as DreamWorks, Nickelodeon, Disney and VIACOM, coupled with retail relationships in the United States and around the world with Walmart, Toys “R” Us, ASDA and Carrefour, the Retail Monster team has vast experience spearheading licensing and retail programs for consumers ranging from infants to grandparents and everyone in between. It operates as a one-stop shop, wanting to make every brand it takes on the best in class in the industry.

“We’re a start-up and build-as-we grow model,” Connolly explains. “When we meet with new partners, we dedicate resources to those particular brands and programs. In some cases, it’s selling and licensing a brand, and then we come up with a game plan together. It requires us to devise a consumer-led strategy for the business to make it

happen. Some brands might not be biggest, but as long as they have the drive and skill to be successful, we can fuel their fire and help them reach their sales and licensing goals. We pride ourselves on the unique model we’ve developed and it ensures we are working with the right companies.”

Beyond the Screen One of Retail Monster’s key partnerships is with A+E Networks, the global entertainment media content company with nine networks including, original brands: A&E®, HISTORY®, H2®, Lifetime®, LMN®, FYITM and VICELANDSM,and Crime + Investigation™. These networks reach more than 335 million households worldwide, along with 500 million digital subscribers, through popular programs such as “Ancient Aliens,” “Pawn Stars,” “Duck Dynasty,” “UnReal,” “Bates Motel,” “Wahlburgers” and many more. As part of A+E Networks Brand Licensing growth strategy, they are working with specialized partners, such as Retail Monster to give its fans more creative and unique ways to engage with their favorite shows and talent beyond the screen.

“The holistic, 360 approach Mike is taking with Retail Monster, encompassing traditional licensee/ licensor relationship, plus strategic sales, marketing and franchise development, is an appealing onestop-shop solution for A+E Networks as we look to identify new licensing and retail opportunities for our expanding portfolio,” says Jill Tully, vice president of A+E Networks Brand Licensing.

“By leveraging our in-house expertise with the successful track record of the Retail Monster team, we are able to efficiently scale our brand licensing business and be front and center with the key retail decision makers.”

Building on the growth and momentum of the A+E Networks’ content pipeline, A+E Networks’ Brand Licensing team is focusing on three key areas to maximize its portfolio of merchandising and retail opportunities. It’s taking a look at how it can keep its core franchises fresh, such as “Duck Dynasty” and July/August 2016

Michael Connolly, CEO and founder of Retail Monster www.retailmonster.com Los Angeles

Jill Tully, vice president of A+E Networks Brand Licensing www.aenetworks.com

Tina Calvo, CEO of Entertainment Retail Enterprises www.ere-sri.com

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COVER STORY “American Pickers,” through creative fan engagement; expanding its current brands in the coming years through new categories such as recreation, publishing and immersive experiences; and delving into newer franchises – “SIX,” “Knightfall,” “The Curse of Oak Island,” “UnReal” and “Bring It!” – as they represent major growth potential.

“A+E Networks has proven brands that span an array of demos that translate well to a multitude of licensing deals such as outdoor enthusiasts for ‘Alone’ and ‘Duck Dynasty,’ and games and illustrated books for ‘Ancient Alien’s’ sci-fi buffs,” Tully notes.

Some franchises lend themselves easily to fan engagement. “Ancient Aliens” has a niche, engaged audience that Tully describes as some of her “favorite fans.” Because of the fierce fan loyalty with this program, A+E Networks Brand Licensing has launched a fan convention – Alien Con – occurring Oct. 28-30 at the Santa Clara Convention Center in California, with leading event developer, Cosmic Con. The alien enthusiast community will get to attend panels, engage with on-air talent from “Ancient Aliens” and meet stars from shows like “Battlestar Galactica,” “Farscape” and “Lost in Space.”

“We’re really excited about the chance to expand ‘Ancient Aliens’ into the emerging immersive experience space,” Tully says. “We are off to a great start, with ticket sales trending high, and VIP tickets are sold out.”

Another exciting fan event launched by the A+E Networks Brand Licensing team and Mills Entertainment is the “Bring It!” Live tour with Miss D and the Dancing Dolls, based on the popular Lifetime® series “Bring It!” that shines a light on the world of majorette dance competitions. Launched in July, the tour will travel to 30 cities with 31 performances.

“For a first run live event, ‘Bring It!’ Live is blowing our expectations out of the water,” Tully adds. “We have 14 sold-out shows and there are more than 70 percent of tickets sold so far. The fans are amazing; their energy at the show is palpable and we are thrilled to have the chance to connect them directly with the stars they clearly love.

“We’ll continue to build on this success, expanding into other live events and experiential in 2017,” she continues.

“Today, fan engagement is integral, and the huge appeal of A+E Networks’ franchises on-air provides a strong base to create enhanced off-screen promotions and sponsorships.”

These brand extension opportunities come to life through exclusive representation partnerships A+E Networks has signed with companies like Mills Entertainment, Cosmic Con, ScreenLand on the publishing side and SC Group, who develop gaming and gambling programs.

Retail Monster is A+E Networks’ lead partner for licensing and retail activities. “These specialized partnerships enable 16

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A+E Networks is growing new franchises, like A&E®’s hit series “Wahlburgers.”

us to meet consumers where they are and have the right presence in the right licensing verticals,” Tully explains.

After attending Licensing Expo this past June in Las Vegas, A+E Networks Brand Licensing noticed a renewed interest in many properties, like “Wahlburgers” and “The Curse of Oak Island” and growing excitement about newer properties. Tully notes a lot of buzz for the upcoming HISTORY® series “SIX,” a drama inspired by real missions of the Navy SEAL Team, and “Knightfall,” a scripted series based on true accounts of the Knights Templar – also premiering soon on HISTORY®.

In addition, many people were aware of “UnReal,” a Peabody Award-winning Lifetime® series that gives a behind-the-scenes look at the world of Bachelor-style reality television, but it’s now gaining even more traction and interest from both an audience and licensing standpoint as it airs its second season. “We’ve had a lot of positive feedback from the licensing community,” Tully says.

Whether scripted like “UnReal” or reality-based like

RETAIL MONSTER A+E Networks is expanding the successful HISTORY® franchise, “Ancient Aliens,” into an immersive fan event called “Alien Con,” landing Fall 2016.

“Wahlburgers,” Tully says they are focusing on the DNA of their shows to shape category and product development. “For example, we are partnering with Abrams Books on illustrated books spotlighting the extreme downsizing lifestyle celebrated on FYI’s ‘Tiny House Nation’ that will feature tiny homes across the country, DIY projects, decluttering advice and tips for downsizing.”

Coupled with new partners like Retail Monster, A+E Networks is looking forward to more opportunities in the industry than ever before. “Our goal is to position our franchises for sustainable, long-term growth by opening new retail distribution channels, including mass and specialty, innovative product development shaped by property DNA and, above all, deliver singular experiences and brand extensions our viewers demand and deserve,” Tully says.

Retail Solutions Another crucial partnership for Retail Monster is with Entertainment Retail Enterprises (ERE), an innovator in

creating custom retail solutions for brands and licensors.

ERE has focused on the development and execution of turn-key retail programs for more than 20 years and offers a one-stop shop for top brands. “Our unique approach and cross-category expertise provides retailers with cohesive programs that deliver incremental sales,” says Tina Calvo, CEO of ERE. “We want retailers to see us as a 360º solution to their merchandise program needs.”

Developing destination and experiential merchandise programs is the foundation of ERE’s success. The business model evolved to meet the changing needs of retailers in a constantly shifting marketplace. “We saw how impactful our cross-category programs were for theme parks and other destination retail partners and knew there was an opportunity to create a ‘mini destination’ in traditional retail stores,” adds Calvo.

ERE’s solution of bringing together development and manufacturing of multiple categories into one unified, shoppable display was quickly embraced by retailers and July/August 2016

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COVER STORY consumers. ERE’s displays now encompass a full array of offerings, including promotional pallets, end caps, sidewings, in-line programs and other configurations.

Connolly sought out ERE for its innovative solutions and capabilities, knowing the company would be a great partner moving forward for Retail Monster. “ERE can successfully deliver a program on a pallet or other format with a consistent and relevant brand message,” he says. “ERE can deliver that expertise. We are certain ERE has such a unique capability that we’ve had them in front of every retailer. ERE’s amazing merchandising ability, coupled with Retail Monster’s ability to identify gaps in the marketplace, makes a potent combination.”

“We have built our partnership with Retail Monster based on each other’s areas of expertise, relationships with brands and the retailers we serve,” Calvo adds.

The beauty of the programs is that Retail Monster only needs to work with one licensee in ERE to offer a variety of different categories of merchandise. Other suppliers focus on a single or limited category, but ERE brings collections and programs to retail across all categories.

“I’d use the analogy ‘what makes a great car is great parts’ to describe ERE’s advantage,” Connolly explains. “ERE’s car is the ‘pallet’ but each individual item featured in the pallet will stand up to any item you can find on the shelves.

We love that unique differentiator.”

ERE and Retail Monster plan to expand the business to additional retailers by working strategically to identify opportunities and capitalize on them in a significant way.

“We have the product knowledge and execution knowhow to bring something new and different to the market,” Calvo says. “Together, we’ve built a vertical infrastructure to deliver innovation that is brand relevant, retailer focused and consumer friendly.”

In addition to offering retail solutions, ERE owns and operates a U.S.-based manufacturing facility at its corporate headquarters in Apopka, Fla., and Product Development and Quality Assurance offices in China. This gives ERE an even greater advantage because they understand what goes into making a variety of products and can directly manage the entire process from design to delivery.

Although the company has entered a very crowded marketplace, Calvo sees ERE fulfilling a white space for brands and retailers. “We want to expand our turn-key platform and become known as the brand statement partner for retail and consumer solutions,” she says.

Coming Together Connolly describes Retail Monster as “an organization of empowerment,” with more than 70 years of combined licensing, retail, sales and marketing experience among its 18

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team members. “The culture is deeply collaborative as everyone has individual levels and areas of expertise that we bring together to ink deals and shape customized strategies for our brand and retail partners,” he says.

Connolly notes two strengths found in every member of the Retail Monster team: Everyone is a retail connoisseur and everyone is bringing in a specific expertise, brand management to direct sales or marketing. “We are able to bring each team member’s core skill sets into play to meet client needs,” he adds.

“We are fortunate to have industry expert Kelli Corbett as a partner and our chief client officer. She is an accomplished sales and retail marketing leader, and I always learn something new from her,” Connolly says. “She can walk the floor of any retailer and immediately identify white space and, together with ERE, conceive and manufacture wow-factor products to fill it, fast. In addition to Kelli is Colin McLaughlin, partner and vice president of licensing, who for years has the proven ability to license brands from small-to-large.

“Our amazing partners share our goal to provide extraordinary consumer experiences,” Connolly continues. “From forecasting trends and delivering best-in-class solutions to retailers and helping bring brands to life in dynamic new ways, I’m excited to have the talent and know-how in place to take their businesses to a whole new level.” O

PAUL FREDERICK 20 | ADVANCE PACKAGING 24 | TOM JAMES 26 | TRADEHOME SHOES 29 | SHIEKH SHOES 32 | RALLY HOUSE 36 | NETELIXER 38 | HANKY PANKY 40 | FOREVER COMPANIES 42 | GREAT CLIPS 44

FN PLATFORM returns to Las Vegas this August, bringing more than 1,600 footwear brands across a variety of categories.

Coming in Hot

FN PLATFORM is gearing up for a landmark show this August in Las Vegas.

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ith more than 1,600 men’s, women’s, juniors’ and children’s footwear brands from more than 20 countries expected on the show floor, August 2016 is anticipated to be the best market yet for the show. Known as the global showcase for branded footwear, FN PLATFORM’s international presence has grown to represent 250 exhibitors from more than 20 countries, including top brands from Italy, France, Britain, Spain, Brazil and Portugal.

FN PLATFORM also draws prominent domestic exhibitors, and this season is no exception, with names like Sam Edelman, Vince Camuto, Cole Haan

and Rebecca Minkoff gearing up to have a huge presence on the show floor. The show continues to bring in fresh talent as well – 20 percent of February 2016 exhibitors were new to the show, and August 2016’s lineup lists fresh faces across every footwear category.

While many retailers come for the brand selection, the show is also known for its expertly curated layout. FN PLATFORM is divided into six conveniently merchandised environments showcasing the best luxury, casual, comfort and fashion footwear.

Each environment has a unique look and feel that’s representative of its fashion category, and there are five lounges

across the show floor for buyers to relax and enjoy a drink or meal.

The show’s star-studded networking events continue to be a draw as well. This season’s much-talked about FN Platform Opening Night Concert boasts a performance from female pop sensation Wilson Phillips. Show floor marketing initiatives and advertising opportunities are also on the rise with partners like Marie Claire, NSRA, FDRA and Footwear News covering the show and hosting complementary seminars and events.

FN PLATFORM’S next edition is Aug. 15–17, 2016, at the Las Vegas Convention Center. For more information, visit magiconline.com/fn-platform. O

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Paul Frederick caters to its core base of successful professionals who want high-quality, reasonably priced attire that sets them apart.

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Paul Fredrick

PAUL FREDRICK

The Perfect Fit

Paul Fredrick designs, manufactures and directly distributes every item in its collection, helping it grow its base of satisfied customers. BY ERIC SLACK

C

elebrating its 30th anniversary in 2016, Paul Fredrick is a small company based in Fleetwood, Pa. Started as a shirt-only manufacturer and producing shirts for many of the country’s preeminent men’s retailers, the company has long since taken its products and their exceptional introductory prices directly to customers.

“Over the years, we have remained true to our original proposition while adding complementary product categories,” President Lyle Croft says. “We started with dress shirts, and these remain the base of our business today. We still offer what we feel is the best off-the-shelf dress shirt available in the men’s arena for a very compelling price. As we have added new categories, we have worked very hard to take the guesswork of coordinating for our customers.”

we’ve left him behind. Something that is part of our DNA is a very broad size offering. We are unique in offering more than 60 exact sleeve length dress shirt sizes.”

To be sure, the business understands how to evolve. Paul Fredrick started with a white, pinpoint dress shirt advertised in the Wall Street Journal. It added catalogs, the original base of Lyle Croft, president www.paulfredrick.com its marketing. Over the years, the company has Fleetwood, Pa. become less reliant on print and shifted the majority of its marketing online.

“We have been fortunate in making this move that we have still been able to very successfully acquire new digitally oriented customers while maintaining a strong base of cat-

Satisfying Customers Paul Fredrick employs roughly 125 people who support all facets of its business, including shipping, customer service, merchandising, marketing, creative and IT. As for its merchandise, every piece is designed to coordinate as part of a collection. The company’s buyers spend a great deal of time collaborating on how to dress the Paul Fredrick customer from head to toe.

“The Paul Fredrick customer is a successful, mature professional,” Croft says. “He enjoys wearing high-quality, reasonably priced apparel that sets him apart from others.

The terms ‘polished’ and ‘distinctive’ would help describe our customer.”

The company aims to put together four collections a year that provide style that its target customer cannot get any other place at Paul Fredrick’s prices. Customers might find color combinations and styling that are similar, but they would have to pay prices that are two to three times higher.

“Our customers have a strong point of view and can be a little resistant to change,” Croft says. “Being 30 years old, we have customers who have been with us for a decade or more.

We have to stay sensitive to this as we make styling changes. We make tweaks, not wholesale changes. If we changed the fit of our collection to slim or ultra-slim and went with darker, monochromatic colors and patterns, we would leave our customer behind. We walk a fine line between moving our customer forward, while not making him feel like July/August 2016

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Paul Fredrick

alog-loving customers,” Croft says. “While the experience is obviously different for a catalog-in-hand vs. paulfredrick. com customer, the merchandise offering and pricing is the same for both. We work hard to provide this seamless experience. We have a team of 30 customer service experts that help both our online and print customers. This group plays a pivotal role in this seamless experience.”

Looking to Improve Being a small company, Paul Fredrick thinks long and hard about the kind of investments it makes to move the business forward and keep its shopping experience competitive and relevant. Last year, to respond to the shift in online shopping toward mobile devices, the company changed its website to be able to determine the kind of devices its customers were using. This new, responsive design has enhanced its mobile shopping experience.

As a direct-to-consumer business, Paul Fredrick knows it must stay in front of its target audience. It has invested in taking its customer acquisition efforts to a new level while it also continues to focus on offering something unique that is not readily available at countless other retailers.

Additionally, Paul Fredrick has built strong partnerships with a limited number of suppliers. Many of its suppliers have been with the company for the majority of its time in 22

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business. It may be a relatively small player, but the company has worked hard to be a great partner regardless of its size.

The company is able to be a great partner thanks to consistent, timely product development. It delivers every piece of what it orders and has always paid in a very timely manner. Paul Fredrick treats its suppliers as the experts in their arena, and it supports them by providing a clear understanding of who the Paul Fredrick customer is and what he wants to buy. This approach to partnership minimizes merchandising missteps.

Having achieved so much in its 30 years of business, Paul Fredrick knows the world of men’s apparel will continue to present challenges in the future. Fortunately, the company is aware of the challenges it faces as it seeks continued success.

“The major challenges we face in the future are not too different than those we have faced in the past,” Croft says.

“Operationally we are small and our location is a challenge for both human resources and logistics. Our size allows us to remain nimble, but it presents problems for us with scale. We are always challenged to creatively overcome these issues.

“Our customers will continue to expect a great shopping experience and the highest-quality merchandise. The big online players have raised the bar quite high, and we must creatively compete.” O

ADVANCE PACKAGING

It’s All In The Bag

Advance Packaging’s Build A Bag™ Program gives formalwear boutiques and national retailers the opportunity to make their garment bags truly stand out. BY JIM HARRIS

Advance Packaging displays garment bags from its Build A Bag Program at World of Prom – AmericasMart Atlanta.

T Mark Blum, director of production and sales www.advancebags.com Brooklyn, N.Y.

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he garment bag is the unsung hero of the formalwear world; simple in concept, yet brilliant in performance. Without it, dresses, suits and tuxedoes would be more difficult to organize, transport and keep wrinkle free and undamaged.

While many mistakenly attribute the sole purpose of a garment bag to its functionality, for Advance Packaging’s many customers, garment bags are an exciting, creative and vital part of a much broader merchandising and marketing strategy. Major fashion retailers understand that the garment bag is meant to communicate the purpose of what the brand stands for and how it should be perceived.

In 2009, aware that there was a large segment of its customer base who was in need of more than just

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the basic vinyl bag, Advance Packaging, located in the hip, and densely populated borough of Brooklyn, NY, launched the Build A Bag™ Program. The program seeks to push the edge in retail packaging, by offering custom garment bags in a host of fabrics, prints, sizes, and vibrant colors.

“We initially offered customization solely to the prom market,” says Mark Blum, director of production and sales for the Brooklyn, N.Y. based company.

“Prom is all about color and fun. We wanted to give our customers the opportunity to design a bag to reflect their particular style. With a customized bag, you have something different. Everyone wants to be unique to the market.”

Advance Packaging’s overseas factories mass produce for larger retailers, but are also capable of

Advance Packaging producing smaller runs for the many boutique-type bridal, prom, and apparel shops who do not need to order on a such a large scale. This allows everyone to take advantage of the Build A Bag™ Program. “Our ability to cater to and accommodate boutique shops is a big advantage and part of what sets us apart from other companies,” Blum says.

For customers needing even smaller amounts or quicker turnaround time, Advance Packaging has in-house “Private Stock” available in various sizes, colors and materials, including clear vinyl, non-woven and PEVA. Highly professional silk screening and hot stamping are done on premises in order to better service dress, bridal and menswear shops.

‘Tremendous Loyalty’ While the Build A Bag™ Program is a newer and creative division of Advance Packaging, the company has been a leader in the retail packaging business for over 25 years and includes many major retailers such as Macy’s, Bloomingdales, Saks and Hudson’s Bay of Canada, among others.

Over a decade ago, Advance Packaging began its relationship with the Tom James Company, the largest national custom clothier, and has been producing branded and custom bags for Tom James stores ever since. “Tom James is a company I admire tremendously,” Blum says. “As large as they are, their loyalty and the way they interact with their vendors is just incredible.”

In addition to zippered garment bags, Advance Packaging provides tote bags and custom branded wooden hangers to Tom James. “We provide all of their packaging needs,” Blum says. “Tom James has been a pleasure to work with on a personal and professional level. They are a solid, smart and well-run company.”

ABOVE: High-end wooden hangers by Advance Packaging.

BELOW: Many colors are offered in the Private Stock Domestic Program for men’s suits bags and more.

Generating Interest Advance Packaging is continuously expanding its Build A Bag™ Program throughout the menswear market. “We are accomplishing in the menswear market what we’ve done in the prom, bridal and formalwear markets,” Blum says.

The company actively promotes the program at industry events. “We promote ourselves by exhibiting at specialty shows, and our best advertisement is through satisfied customer recommendation,” he adds. “Shows give us the opportunity to interact personally with customers and show them what we have to offer. We generate a tremendous amount of walkthrough and interest at our booth.”

Success Factors Advance Packaging attributes its success to three important qualities. “Our focus is on creativity, quality and personalized customer service,” according to Blum. “We prefer not to compare ourselves to competitors, but in terms of style

and quality nobody does what we do or offers the services we offer.”

Blum credits the company’s success to its extraordinary staff, led by founder and CEO Mr. Lazer Braunstein and art and design director Michelle Baxter. The majority of Advance Packaging’s employees have been with the company for over a decade, giving it an edge when it comes to product and customer familiarity.

The environment within the company is one of true camaraderie. “We have a very comfortable atmosphere where everyone truly feels like they’re an integral part of the business,” Blum says. Coupled with loyalty, integrity and an ethic of hard work, Advance Packaging is well on its way to a bright future. While the company has found its niche in the market, Blum recognizes that, “ultimately success is not in our hands, but by the grace of G-d alone.” O July/August 2016

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Tom James has been manufacturing suits for more than 50 years, and says it thrives by creating relationships with its customers.

TOM JAMES

Made to Measure

Tom James fits and manufactures custom high-quality suits by coming to its clients and providing excellent customer service. BY STEPHANIE CRETS

F Todd Browne, CEO www.tomjames.com Nashville, Tenn.

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inding the perfect suit can be a daunting task with so many different types of fits, brands and stores to visit. And shopping in of itself can be an exhausting chore that takes too much time and effort. But Tom Jamesmakes it easier than ever by offering high-quality, made-to-measure suits. And the best part? “We come to you,” CEO Todd Browne says. “When we offer the best-quality product for your price range and service at a high level, a mutual respect develops.”

The 50-year-old company founded in 1966 wants to eliminate the part of the process where the cus-

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tomers feel like they’re fending for themselves in a retail store. “It’s a constantly revolving door with sales professionals in the retail environment, but 50 percent of our salesforce has been here for seven-plus years,” Browne says. “When you can develop a relationship with someone, someone you’re going to invest a lot of money in clothing with over the years, you can trust their guidance and perspective and focus on what you do best. We come to you, save you a lot of time and it’s a trusting relationship.”

Tom James has doubled its size in the last five years, and Browne, who has been part of the com-

pany for 26 years, says it’s on track for continued consistent growth. While the company is known for bringing custom suits, slacks and shirts to the marketplace, Tom James is also expanding its ready-made line of casual wear and its custom jeans program. “People have just loved our custom programs because a lot of people don’t fit into a regular medium, large or extra-large – whatever a given size scale is,” Browne notes. “So we’re customizing our accessories and casual-wear as well.”

Advance Packaging For over a decade, Advance Packaging has been designing high end, custom bags for leading clothier Tom James. Take your own retail packaging to the next level with our Build-A-Bag Program. Choose your color, print, and style for a garment or tote bag that truly represents your brand.

The company’s biggest challenge has been creating infrastructure to support its current and ongoing growth – a good problem to have. Since its growth, Tom James has opened more facilities, hired more people and upgraded its processes to handle demand.

“Doubling every five years is a daunting challenge and we’ve had to address every single facet of our company from our customer service with our clients to our product to our systems and processes,” Browne explains. “We’re consistently looking for more to support what we’re providing our clients so we can maintain our quality and the integrity of how we do business and service.”

Owning It Tom James has offered custom products and service for 50 years and covers every facet of the process, including creatJuly/August 2016

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Tom James

ing a custom pattern for every single garment. The company owns its own mills, weaves its own cloth and owns its manufacturing facilities so it can control production, quality and all production schedules.

“When you own your manufacturing facilities, it gives you

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the flexibility to adjust with the times – not just in terms with fashion trends, but also with economic times,” Browne explains. “We can respond to what our customers need and it gives us a tremendous edge where we can control our cloth and manufacturing process. That’s why I’ll go headto-head with any garment at any price point and you’ll find the finest one with us in terms of quality and cloth. And it’ll be custom compared to the marketplace, which is what our customers want.”

With 106 offices and more than 4,000 employees worldwide, Tom James credits its success to its people, who take an ownership mentality with the company. Tom James focuses on building up its people while the people build the business.

“We are committed to molding and shaping the lives of the people who work here,” Browne says. “If we build and develop people, they’ll take good care of our clients and build a successful business. But the great credit belongs to our founder, Spencer Hays. He established Tom James on a set of principles and those have guided us in the way we treat our employees and customers for 50 years. When you run a company by principles, it helps you keep your priorities straight.”

Browne says he doesn’t take this responsibility lightly. “I hear from so many customers, such as the CEO of a Fortune 500 company in London, ‘I don’t think I’d be CEO if it weren’t for the clothier who takes care of me,’” he says.

“You’d never imagine some of the most successful individuals would give so much credit to their dress, but that’s the way many of us are judged immediately.

“What I’m most proud of is how we change lives outside of Tom James with our customers and how we change lives inside of Tom James,” Browne continues. “Our slogan this year for our 50th anniversary: Tom James – celebrating 50 years of changing lives.” O

TRADEHOME SHOES

A Good Fit

The 100 percent employee-owned Tradehome Shoes strives to provide customers with ‘the most enjoyable footwear shopping experience anywhere.’

Tradehome Shoes says it strives to find ‘the right style with the perfect fit’ for its customers.

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fter nearly 100 years, Tradehome Shoes prides itself on going to great lengths to offer a great footwear-buying experience to customers. “Customer service has always been our No. 1 priority,” the company says.

“For over 95 years, our focus has been providing the most enjoyable footwear shopping experience anywhere,” Tradehome Shoes says. “Our knowledgeable staff will greet [customers] with a smile, listen to [their] wants and needs, measure [their] feet and exhaust all options to find the right style with the perfect fit.”

Based in Cottage Grove, Minn., the company is a 100 percent employee-owned footwear retailer.

“With locations throughout the heartland of the United States, we have become a fixture in the communities in which we serve,” Tradehome Shoes says.

Founder Alex Mains started the company in 1921,

when he bought two shoe stores in Duluth, Minn., and Superior, Wis. Since then, Tradehome Shoes’ focus “has always been on providing individualized service to our customers,” it says.

The company initially sold private-label footwear in downtown areas. “We’ve since expanded to 109 mall-based locations across 21 states, and proudly carry over 150 brands,” Tradehome Shoes says. “We continue to differentiate ourselves from our competition with our desirable product offering and unexpected level of customer service.”

However, “At the end of the day, we’re just people who love shoes, and enjoy helping others,” the company says. “Whatever [our client’s] footwear need [is], [they can] stop into any of our Tradehome Shoes locations, and one of our employee-owners will pull out all the stops to make sure [they and their feet] leave happy.”

July/August 2016

Tradehome Shoes www.tradehome.com Cottage Grove, Minn.

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For over 95 years, our focus has been providing the most enjoyable footware shopping experience.

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Tradehome Shoes offers a customer reward program. “We like to think our program is a shoe-in for the best rewards program in the footwear industry,” it says, noting that it makes it simple and hassle-free.

“With Tradehome Rewards, [customers] earn a point for every dollar spent at Tradehome Shoes, [and] those points then accumulate towards earning [them] $50 bonus coupons to be used on any merchandise in any Tradehome Shoes location,” the company says.

“We know [our clients’] lives are busy and complicated enough as it is, so [they can] let us do all the work for [them],” the company says. “The Tradehome Shoes Rewards Program is a fully automated, hassle-free program that is available to all of our customers.”

The company’s clients also will earn access to special promotions, which are just for its Rewards Members. “As a 100 percent employee-owned company, our main focus is providing an outstanding experience every time [the client sets] foot in one of our stores, and the Tradehome Rewards Program is part of that experience,” it says.

Affordable Luxury Tradehome Shoes offers multiple footwear brands in its stores, including Hunter Boots. The company started operations in 1856 and is a British heritage brand. “The brand has a rich history of innovation and continues to forge designs that shield pioneers from the elements and bleakest of landscapes,” it says.

The stores also offer products from ECCO, which says its products are relevant for the current market. “Our customers look for quality, reliability and stylish comfort, and they get all this from ECCO,” the brand says, crediting its staff as the heart of its business.

“We are aware that without skilled, loyal and hardworking employees, ECCO could not deliver and we do our very best to ensure we never become a business where people are just numbers,” it says. “Wherever possible, we believe in creating a sense of family, a feeling of belonging. We strive to provide lifelong education, good career prospects and interesting challenges in order to maintain a high level of job satisfaction.

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Tradehome Shoes “Nor do we ever forget we are shoemakers striving to make first-class products,” ECCO continues. “We want our customers to rely on ECCO to deliver the highest quality standards, a great fit and good-looking shoes at a sensible price. ECCO will always stand for affordable luxury.”

Bringing Harmony Tradehome Shoes also sells products from ASICS, which has developed its name from an acronym of “the Latin phrase, Anima Sana In Corpore Sano – a sound mind in a sound body,” it says. “Staying true to the philosophy by which it was founded, every ASICS innovation, every concept, every idea is intended to create the best product.

“Our mission is to become the No. 1 brand for the sports enthusiast,” ASICS says. “To accomplish this, we pledge to continue to make the best product, striving to build upon our technological advances and pushing the limits on what we can learn from the body and its needs in athletic gear.

“We pledge to bring harmony to the body and soul,” the company continues, noting that it opened its Research Institute of Sports Science in Kobe, Japan, in 1990. “Since then, many remarkable technological innovations in sports shoes

and apparel have stemmed from this unique site where scientists, athletes and coaches work together.”

The center features an all-weather running track, a hall for basketball and volleyball, and several test rooms. “Studying and analyzing the movements of the human body and testing all kinds of materials are the main activities of the 200 people who work at the institute,” ASICS says.

“Obviously, all this work is being done with only one goal: to enable professional and recreational athletes all over the world to perform better, to reach a higher level and to enjoy themselves,” the company says, noting that observing and analyzing physical movements is the basis of its products.

“The researchers in Kobe have high-speed cameras, hitech measuring equipment and sophisticated Alegria by PG Lite® computer software at their disposal,” ASICS Happy Anniversary TRADEHOME SHOES. Congratulations on achieving 95 years of says. “Several test rooms quality business and customer service within have been set up to be the footwear industry. This level of achievement able to translate the find- has only been accomplished by a few ® ings of the fundamental companies in the US. Alegria by PG Lite is thankful and proud to be a part of the research into new materiTRADEHOME SHOES past, present and future. als and products.” O

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SHIEKH SHOES

Defining Cool

Shiekh Shoes is focused on knowing the minds of its target customers and putting the physical and virtual assets in place to reach them. BY ERIC SLACK

Shiekh Shoes attributes its strength to building ties to it loyal consumer base.

B Matt Fine, president www.shiekhshoes.com Ontario, Calif.

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ased in Ontario, Calif., Shiekh Shoes has carved out a strong niche for itself as a footwear and apparel retailer. Founded by Shiekh Ellahi in 1991, the company now operates more than 130 stores throughout the West Coast and Southwest. Currently, Shiekh Shoes is working on ways to make the most of its brick-andmortar and e-commerce footprint.

“The company has created a strong business by building ties to loyal consumers,” President Matt Fine says. “Now we are working on redefining the business and building the infrastructure to support future growth.”

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Target Acquired Shiekh Shows features a product selection that is aimed at young adults. It carries athletic footwear and apparel from brands such as Nike, Jordan, Adidas, Reebok, Converse, Timberland and Puma. Its product selection includes offerings for men, women and children. The company offers a number of exclusive products that cannot be found at other retailers, and it also manufactures and sells its own footwear brand through its stores and website.

As the company has grown, it has not lost focus on its efforts to create a shopping environment that would appeal to its targeted 17- to 22-year-old con-

Shiekh Shoes

sumer base. Its stores are located mainly in shopping malls, modernly designed with wood, brick, concrete and metal with a top-shelf sound system. Additionally, Shiekh Shoes has put as much effort into building an attractive e-commerce portfolio to serve its customers.

“We focus on learning about what inspires our consumer, like music, sport, street culture and fashion,” Fine says. “That is where our consumer exists and we look to reflect the style values of those consumers. Digging down, the 17- to 22-year-old is the target demographic, but we serve younger and older and have a fairly even male and female split. From there, it is about meeting their expectations from a product standpoint and providing them with engagement and service. Today’s consumers are so much smarter and adidas have higher expectations, “Shiekh Shoes is one of adidas’ strongest so you have to deliver.” partners in North America. Matt Fine has esThrough the efforts of tablished a progressive team that has elevated the company’s leaders, Shiekhs Shoes’ retail presentation, increased product buyers, marketing their dedication to community grassroots events, and ultimately created a ‘best in class’ department and individuconsumer experience.” – Todd Eichelberger, al stores, Shiekh Shoes adidas, Sales Director, Fashion Channel has been able to create an 34

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enhanced buying experience for consumers. The company has established the right product mix in all of its locations, and it has built an efficient product distribution operation to support its retail locations and e-commerce business.

All of this has helped Shiekh Shoes build equally strong ties with brands. Fine says Nike and Jordan have long led this space in the athletic footwear and apparel industry, and Shiekh Shoes has a strong product mix there as a result. At the same time, other brands such as Adidas and Puma have been able to grow their presence as consumers have opened themselves up to a wider array of choices.

“We want to evolve in ways that allow us to introduce consumers to new things because they trust our selections,” Fine says. “It is important to know the relevant brands, why they are relevant, and what brands want from a retailer. We understand what our partners want and are looking for from distribution points, and we continue to look for ways we can expand what we offer to our current brands while looking for opportunities to bring in new brands.”

Balancing Act As the company looks to the future, it is focused on finding the right mix between traditional brick-and-mortar stores and

“

Shiekh Shoes

We want to evolve in ways that allow us to introduce consumers to new things.

”

the modern online environment. Shiekh Shoes has worked to understand how consumers approach both environments.

“The purpose of retail stores is changing, but the stores are not going away,” Fine says. “People still want to touch and feel products, so you need to know what you stand for in both spaces. In either space, you must remove barriers between consumers and the products they want.”

In its stores, Shiekh Shoes has been redefining its environments to be sure it is giving consumers access to the cool spaces they are looking for. It has also invested in messaging and how it speaks to consumers. This is all because Shiekh Shoes knows it has to maintain relevance with consumers at all times while making sure it is giving them the expe-

rience they want everywhere. And while the company has been investing in improving is physical locations, many of its other investments have focused on e-commerce and logistics. “The stores help to expand your reach and presence as a brand, but we see e-commerce as a place where we can impact growth,” Fine says.

One big move for Shiekh Shoes came earlier this year when it announced the acquisition of the well-known e-commerce retailer Karmaloop. Over the past 15 years, Karmaloop had built a reputation online for its focus on urban style and streetwear products. Karmaloop’s rich history and strong brand was attractive to Shiekh Shoes, as the company felt it could leverage Karmaloop’s assets to grow its existing businesses in both the brick-and-mortar and e-commerce channels.

“When I look at the Karmaloop acquisition and the reaction its generated, it shows us that biggest growth opportunity is in the e-commerce space,” Fine says. “That is Reebok a big piece of the puzzle, and we are eager to show Congratulations Matt Fine on all of your the kind of impact we can accomplishments! Best wishes on continued success in the future! have with that brand.” O

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RALLY HOUSE

Show Your Colors

Rally House carries local novelties and regional-inspired apparel, gifts and food in its stores in cities where fans live, work and cheer.

Rally House operates stores throughout Kansas, Missouri, Texas, Philadelphia and Cincinnati.

Rally House www.rallyhouse.com Lenexa, Kan.

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ally House offers an array of sports merchandise so fans can truly “show their colors” for their favorite teams. As a specialty sports boutique, Rally House offers a large selection of apparel, gifts and home décor representing local NCAA, NFL, MLB, NBA, NHL and MLS teams. The company’s stores also carry local novelties and regional-inspired apparel, gifts and food. With locations in the Midwest, South and Northeast, Rally House brings stylish sports apparel and unique team gifts to its customers.

“At Rally House, we sport our colors by carrying

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an unrivaled selection of local products and the best variety of sports team merchandise,” the company says. “Find unique brands like '47 Brand, Retro Brand, Game day Couture and Junk Food Clothing, or show homage to tried-and-true favorites such as Nike, Adidas, Majestic and Under Armour.”

Founded in 1989 as a mail-order company by Peg and Tim Liebert, Rally House used to be known as the Kansas Sampler. The catalog featured apparel and gifts related to the state of Kansas and local teams such as Kansas Jayhawks, K-State Wildcats, Kansas City Chiefs and Kansas City Royals.

In the 1990s, the Lieberts opened five Kansas Sampler stores in the Kansas City metro area. Their son, Aaron Liebert, joined the company as CEO in the late 2000s, and in 2009, Kansas Sampler expanded into Texas and Missouri under the Rally House name. Rally House continues to operate stores in Kansas under the name Kansas Sampler.

Rally House operates stores throughout Kansas, Missouri, Texas, Philadelphia and Cincinnati. It plans to expand with more stores in the Midwest in 2014. The company stays true to its roots by offering a great selection of team-related apparel and gifts, including exclusive designs found only at Rally House.

The company’s niche is to have a deep inventory with every type of product branded with the names of an area’s local professional and college teams.

Its stores range in size from 3,000 to 36,000 square feet, with 8,000 to 10,000 square feet being the average.

Rally House carries approximately 30,000 SKUs from 200 vendors, compared with a sporting goods store, which might carry 2,000 SKUs. A sporting goods store might carry a few branded key chains and shot glasses, whereas Rally House stocks 25 key chains or eight to 10 shot glasses. It also fulfills custom orders for names on jerseys and other products.

In 2015, Rally House expanded its distribution center at its headquarters in Lenexa, Kan., from approximately 50,000 square feet to 120,000 square feet. The company processes up to 150,000 units weekly.

KC Store Fixtures KC Store Fixtures credits its 22-year success to relationships with merchandising visionaries like Rally House and the ability to fulfill a large, last minute order for them after the K.C. Royals clinched the World Series in 2015. KC Store Fixtures offers an extensive selection of in-stock inventory and a manufacturing facility that creates custom solutions for retailers across the country.

To Delight Customers To provide customers with the best shopping experience possible, Rally House hires associates who share the same passion for sports as the company’s patrons.

Rally House encourages its associates to show their own team spirit, so customers feel at ease when striking up a conversation about their favorite team, the latest game or even their favorite sports rivalry.

Rally House stores offer their customers a friendly environment and comfortable shopping experience, with associates dedicated to helping customers find the perfect new item to represent their favorite team. Rally House is committed to truly connecting with patrons to offer exceptional service from the moment they step into one of its local stores.

“At Rally House, we don't believe there's just one way to show your colors,” the company says. “We're fans of being bold. We love face tattoos, the latest, innovative trends for game day, vintage-looking gear and just about anything to show your passion, loyalty and spirit for your favorite sports team.

Every store is unique to the city in which it is located, with a selection of merchandise customized to the specific professional and college teams in that area. Customers can also shop 24/7 online at www.rallyhouse.com, where the company offers the same selection of merchandise it carries in its stores.

With its connection to local sports teams, Rally House also offers exclusive autograph sessions with local sports stars, ticket giveaways and events with local celebrities “We don't believe there's such a thing as being too obnoxious on game day when faced by your biggest team rival,” the company says. “Show your favorite team from head to toe. We believe in local. Show your hometown pride and shop at Rally House. For us, the magic happens on game day.” O July/August 2016

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NetElixir’s suite of digital marketing serves help its clients reach consumers.

NETELIXIR

Seeing Beyond the Click Working closely with clients, NetElixir develops digital marketing solutions that account for the human factor above everything else. BY CHRIS PETERSEN

I Udayan Bose, CEO www.netelixir.com Princeton, N.J.

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n the digital world of ecommerce, it can be easy for retailers and manufacturers to simply see their online marketing efforts as click drivers.

Generally, the more clicks a website receives, the more likely their business will succeed. Just because these transactions take place in the digital realm, it doesn’t mean there aren’t people behind those clicks.

That’s the philosophy that’s helped NetElixir, a leading provider of digital marketing, provide solutions for clients worldwide.

As Udayan Bose, CEO of NetElixir explains, NetElixir helps its clients succeed in their online marketing efforts by humanizing every click and providing them with a more complete picture of their customers than a purely numbers-driven approach.

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With three offices serving customers worldwide, NetElixir provides a complete suite of digital marketing services that help companies reach consumers. Among these services are paid search advertising, website analytics, search engine optimization (SEO), and social media marketing. Across all of these services, Bose says, NetElixir’s international team of highly motivated and enthusiastic technology experts help clients grow their opportunities through their global perspective and technology savvy.

Bose started the company in 2004, after realizing that even though his prior employer was one of the largest advertisers on Google, the advertising agency it used didn’t meet their needs due to its one-sizefit-all search marketing program. Inspired to devel-

NetElixir op digital marketing services from the customer’s perspective, Bose launched NetElixir in India.

Because the need for digital marketing was much stronger in the United States and Europe at the time, NetElixir immediately established an international presence and today the company serves customers in over 140 countries. With its advanced analytics capabilities, NetElixir embodies the convergence point of the future of the ecommerce world. Bose says the company stands ready to help its customers reach more consumers with effective and up-to-date solutions.

Providing a Global Perspective Bose attributes the largest factors of NetElixir’s success over the years to its advanced analytical model, tailored solutions, and global perspective. All of these elements have been critical in helping the company’s clients develop strategies for global expansion.

For example, in 2010, the company began working with Toys ‘‘R’’ Us on a major expansion of its global ecommerce plan. Beginning with France, NetElixir helped Toys ‘‘R’’ Us gain a greater understanding of the market through data collected about French consumers.

More than just gathering information about what global consumers purchase and when, NetElixir’s advanced models help clients understand their results to see the psychological reasons why consumers interact with brands as they do.

NetElixir helps clients build tailored, all-encompassing digital marketing campaigns geared specifically to an international market, determining everything relevant for success including the selection of the most effective keywords for online searches.

Bose says many large companies seem daunted by the globalizing market, unsure of how to adapt their digital marketing messages for different markets and cultures. Thanks to NetElixir’s concentration on humanizing data and academic rigor, the company has been able to help numerous clients expand globally. For example, Bose says, the company recently helped Lenovo increase its ecommerce presence in Latin America by nearly 300 percent.

Building Networks Although NetElixir’s client base includes some of the largest manufacturers and retailers in the world, that doesn’t mean the company serves only large companies. Bose says helping small businesses is one of the company’s many passions, and it established LXRMarketplace to accomplish that goal. Used by more than 100,000 small companies worldwide, LXRMarketplace provides free SEO tools for their websites as well as access to NetElixir’s database of global business intel.

NetElixir’s expertise has been highly sought-after over

the last several years, and Bose says the company’s recent partnership with UPS demonstrates how valuable the company’s services and insights have become. As Bose explains, NetElixir helps UPS’ mid-tier customers as they encounter challenges while growing their online presence, especially in the face of competition from Amazon and other large e-retailers. Recently, NetElixir joined the UPS family of Customer Technology Partners (CTP) and over the last 18 months, the company has helped numerous UPS customers develop and execute new strategies for ecommerce growth.

This includes hosting over 30 learning workshops to date.

Staying Focused As NetElixir’s presence and influence on the world of ecommerce continues to expand, Bose says the company’s biggest focus is on ensuring it doesn’t lose sight of its original values and core principles.

“Our whole purpose is to help customers grow online, and we absolutely cannot lose sight of that,” he says. “The level of dependency they have on us – it’s a big responsibility and we take that responsibility very seriously.”

In the near future, Bose says NetElixir will remain focused on expanding its retail knowledge base, providing accessible innovative products, and sharing with its customers the latest research on consumer behavior. He says the partnership with UPS is significant in allowing NetElixir to help as many businesses as possible. As long as the company continues to hold true to its principles of humanizing every click and putting the growth of their client’s business first, Bose believes that success for both their company and their clients will follow.

“I think one of the things we can definitely guarantee is that we will remain dedicated to our core values,” he says. O July/August 2016

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HANKY PANKY

Perfect Fit

As “fit purists,” the founders of Hanky Panky strive to come up with designs that are comfortable and look good.

Hanky Panky’s intimate apparel is known as much for its comfort as for its fashion. BY CHRIS PETERSEN

I Gale Epstein, co-founder www.hankypanky.com New York City

Lida Orzeck, co-founder

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t’s said that a Hanky Panky thong is sold every 10 seconds, and for good reason. The New York City-based lingerie and sleepwear company’s unique thong panty design has been recognized far and wide as the most comfortable in the world, and that has helped solidify the company’s status as one of the leading designers and producers of women’s intimate apparel in the country. What’s even more incredible is that the company’s rise to success started with a simple gesture of friendship.

Co-founder Gale Epstein was working as a fashion designer in 1977 supplying unique designs to small boutiques while working for larger companies.

While playing around with embroidered handkerchiefs, she got the idea to use them to create a handmade set of lingerie as a birthday gift for her friend, Lida Orzeck. “She loved it, and we realized that maybe other women would like something like that, too,” Epstein says.

Epstein and Orzeck began showing their designs to small boutiques and the reception was so enthusiastic that they formed Hanky Panky shortly thereafter.

From their original lingerie designs, the co-founders have expanded the company’s apparel offerings to include full lines of panties, thongs, bras, lingerie and sleepwear. The company also collaborates with other brands to create apparel that appeals to all women, including the many loyal customers who are sure to collect each season’s latest designs for their wardrobes.

Even as Hanky Panky gears up for the future and the changing landscape of the retail world, Epstein and Orzeck say the qualities and principles that have made the company successful for nearly 40 years will continue to serve as the foundation for its future.

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Fit and Fashion Perhaps the biggest catalyst for Hanky Panky’s success was the introduction of its signature thong panty in 1986. Orzeck says the one-size-fits-all design became a sensation at a time when similar garments were all about look and comfort was an afterthought. “All thong underwear heretofore was very uncomfortable, but because we’re really fit purists, Gale worked hard to come up with a design that not only looks good, but is very comfortable,” Orzeck says.

Hanky Panky remains a fashion-focused company, and Orzeck says the company works to ensure that its seasonal collections are at the forefront of fashion four times a year. “We are always paying attention to that so that we are ahead of the curve,” she says.

One example of how Hanky Panky has been ahead of the curve is in its collection of soft bras, which has been a staple of its product line for years. Now that fashion is trending away from underwire bras, Epstein says the company anticipates its bras will become even more popular in the near future. The company also has been on the cutting edge when it comes to designing intimates for plus-sized and

petite customers, two market segments that have been underserved traditionally by many of the major brands. “We try to give all women that attention,” Epstein says.

Made in the U.S.A. Although the company has become renowned for the fit, feel and look of its products, the co-founders say no less important to the success of Hanky Panky is the fact that all of its apparel is made in the United States. It’s not a surprise that as a company dedicated to making intimate apparel, quality control is extremely important to Hanky Panky, and its co-founders believe strongly that manufacturing its products domestically is the only way to guarantee a high level of quality. “Lida and I are still very involved in the company today, and the fact that we’re domestic gives us even more control,” Epstein says.

Although keeping its manufacturing in the United States creates some

challenges, Orzeck says being made in the U.S.A. is essential to Hanky Panky’s brand and its long-term success. “We have no desire to go overseas, so we’ve built the company around being made in the U.S.A.,” she says.

Challenges abound as the retail landscape rapidly shifts from brick and mortar to Internet shopping. In response, Hanky Panky has been working on increasing its online presence, and Orzeck says the company has made great strides in recent years to bolster its ecommerce platform to reach customers directly.

As the company looks ahead to the future, Orzeck says Hanky Panky continues to inject excitement into its product lines through enticing new designs such as its racy Hanky Panky After Midnight® collection and special offerings for the bride. No matter what, Epstein and Orzeck’s dedication to fit and fashion will continue to keep Hanky Panky at the top of the industry. O July/August 2016

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FOREVER COMPANIES

Creating a Difference

Forever Companies focuses on building a solid foundation to handle further growth as awareness of man-made stones increases. BY JANICE HOPPE

Forever Companies sets itself apart in the industry because it does not sell any stone that comes out of the ground.

“A Gary LaCourt, CEO www.forevercompanies.com Franklin, Wis.

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diamond is forever” is the most touted yet inaccurate phrase in the jewelry business. Because of this, Forever Companies founder and CEO Gary LaCourt set out more than a decade ago to change the industry using breakthrough technology to develop man-made diamonds that are exactly the same as those that come out of the ground.

“We sat down and asked ourselves, ‘If you were starting out in the engagement ring business, what would be the best company? What would it look like?’” LaCourt says. “And that’s what we did. It is demonstrably, provably better for the consumer and better for the world in general.”

Diamond Nexus launched in 2005 when the technology for creating larger carat diamonds in a lab setting was just starting. At that time, there were a couple companies on the brink of isolating the factor that allowed them to create a larger stone. “Based on that, we really started the company with a mind towards being revolutionary in the created diamond space,” LaCourt says.

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At the same time, Diamond Nexus moved forward with patented stones that look and act exactly like a diamond, called Contemporary Nexus Diamonds.

“A diamond is pure carbon and made out of that one element,” LaCourt explains. “Diamond Nexus is a different crystal, but a jeweler can’t tell the difference, it lasts forever, is very hard and can cut glass. From a consumer standpoint, it’s a good replica.”

In 2014, Forever Companies broke the one-carat barrier for its real diamond, pure carbon product, which it calls True Grown Diamonds, and has been scaling up ever since. The company has been able to consistently achieve up to three carats and expects the size to keep growing.

In fall 2014, Forever Companies launched 1215 Engagement, selling exclusively True Grown Diamonds made of pure carbon. Because the company is able to design and manufacture custom engagement rings and jewelry, it launched Forever Artisans last fall. “We have this design capability and we are always selling custom rings and jewelry to clients, so we split that off into another brand, Forever Artisans,” LaCourt says.

Consumer and Social Advantages Forever Companies sets itself apart in the industry because it does not sell any stone that comes out of the ground. Everything sold by the three brands is grown in “gem greenhouses” above ground, including its true grown diamonds. “Whenever you introduce mining there is some amount of evil that comes with it,” LaCourt explains. “We know about blood diamonds and the mining of emeralds in South America that is causing an environmental disaster. Virtually all precious gemstones are mined in third-world countries where there is no oversight for environmental concerns or human rights.”

The consumer advantage to lab-created stones is that they are less expensive. “The cost of diamonds are heavily altered by the diamond cartels who manipulate the price and create artificial scarcity, which creates artificial concerns,” LaCourt says. “We offer

Forever Companies a superior stone at a better price because there is no mining involved, and it’s ethically and environmentally beneficial.”

Because diamonds are not truly forever as people often have problems with the stone falling out of the setting, Forever Companies offers an “Everything’s Covered Plan” warranty. “That means you can literally throw it down a garbage disposal, fish out all the pieces, send it back to us and we will give you a new one for free for life,” LaCourt says.

In addition to getting the same product at a more affordable price, Forever Companies jewelry is bespoke to the customer. “We don’t stamp out 20 of the same ring, and the ring does not exist until you order it,” LaCourt explains.

Homegrown Stones Forever Companies made its jewelry in China up until three years ago when it brought manufacturing back to its headquarters in Franklin, Wis., building one of the first new jewelry manufacturing plants in the Midwest in many years, according to LaCourt. The company’s focus is on bespoke, direct-to-consumer jewelry, and it had to get closer to the consumer for faster delivery.

Bringing manufacturing home allowed Forever Companies to determine right away if the item is not up to its quality standards and recast immediately. Customer service representatives can also walk into the plant and talk to the person who is melting the gold that will become the customer’s ring to immediately get answers to any question.

Forever Companies manufactures gemstones exclusively in the United States. The stones are made in quantity, and the settings are made to order or unique to each customer.

Growth by Education LaCourt compares man-made and natural pure carbon diamonds to icicles outside during the winter and the ice in the freezer. “Outside is nature-made ice and in your freezer is man-made ice, but it’s the same thing,” he explains. “No one but you knows it’s not a mined diamond and you know it didn’t come out of the ground and no one suffered for this. The problem that we have more than anything is unawareness.”

Forever Companies is targeting millennials by trying to capture their hearts and minds. By emphasizing its product at a lower cost and eco-friendliness, the company is seeing increased growth every year.

“We are seeing significant growth,” LaCourt says. “We are up 20 percent from last year and will be up 25 percent this year.”

Moving forward, the company is focused on establishing a solid foundation to meet increased demand while maintaining its levels of speed, service and reliability.

“That’s our big goal this year; our foundation,” LaCourt says. “We want to have the foundation in place to scale the company, and next year we are hoping to open up new marketing channels with large-scale advertising.” O

E-Commerce Model Forever Companies is committed to being 100 percent e-commerce and closed all of its brick-and-mortar stores.

LaCourt says moving forward, retail will have two kinds of companies: automators and humanizers.

Automators are companies that drive out the inefficiencies in the journey of a product, like Amazon. Humanizer companies are the ones that try to build a bond and relationship of trust between themselves and the consumer. “Humanizer companies look at retail stores as a huge cost center,” LaCourt says. “We have turned away from that model and are completely online to be more controllable, cost-efficient and capital-efficient. E-commerce is getting so good. There are so many revolutionary things that are happening. For us, being a humanizer company means pure e-commerce.”

As an online-only company, Forever Companies knew it needed to make it easier for the consumer to shop. The company offers free shipping both ways and risk-free purchases as the customer can exchange their purchases to find the perfect item.

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GREAT CLIPS

Looking Sharp

Leveraging technology and providing support to franchisees help Great Clips provide hair care services across North America. BY ERIC SLACK

Believing that customer growth drives sales growth, Great Clips is focused on delivering a simple, consistent message.

H Rhoda Olsen, CEO www.greatclips.com Minneapolis

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eadquartered in Minneapolis and approaching 4,000 locations across the United States and Canada, Great Clips is the world’s leading hair salon brand. The company’s growth has come about thanks to its ability to provide consumers with high-quality/low-cost hair care while providing a low-cost/high-growth opportunity to franchisees.

“Our franchising program is a strength that helped us to grow, and we’ve seen very consistent growth,” CEO Rhoda Olsen says. “We’ve averaged an addition of around 200 salons each year over the last 10 to 12 years. This year, we will reach our 47th

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consecutive quarter of same-salon sales increases after having hit our 43rd consecutive quarter of same-salon customer growth.”

Platform for Success Providing quality, no-appointment hair care services for adults and children, Great Clips is founded on a belief that customer growth drives sales growth. The company has remained privately owned and franchise-based since its beginnings, which Great Clips feels have provided it with a great deal of flexibility.

As part of its approach to franchising, Great Clips

Great Clips has tried to simplify its brand message as well as the KPIs that it measures. By creating a simple, consistent message that resonates with consumers across the country – as well as collecting and analyzing data on its customers – Great Clips has been able to create a transparent operating model that allows each franchisee to see how they are performing and to measure themselves against other franchisees in the system.

“That creates competition and visibility into the most important pieces of data,” Olsen says. “The feedback we can get from that data helps us to drive growth.”

Great Clips spends a lot of time supporting new franchisees to help establish strong performance as soon as possible. Staff members from the home office spend a lot of time in new salons early on, and they will return if needed.

“We have shifted our new franchisee focus to be more hands-on and work side by side with them to improve the results of our new franchisees,” Olsen says.

Operations staff also visits regularly with existing franchisees in person and via technology. Great Clips has been working to build greater attendance whenever it holds franchise meetings and conventions, and it has invested in digital communication tools to facilitate interaction outside of physical get-togethers.

Ways to Improve Great Clips has worked hard to understand the differences in – and preferences of – its customer base from market to market. Generally, its core customer is a 20- to 40-year-old male, although the company has built ties to senior, children and female customers as well. It’s focus is to serve all of these groups in a quality manner.

In order to meet the needs of its customer groups, it has focused on making sure it is able to communicate with the customer according to the customer’s preferences.

“The younger customer wants everything electronically, and the senior wants everything in person,” Olsen explains.

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Great Clips “The hair care service isn’t that different among consumers, as the differences come into play more in communication, messaging and offers.”

Business intelligence systems allow the company to determine things such as which customers should receive direct mail, which customers would rather receive push notifications through the Great Clips app, or which customers would prefer communication via Facebook or email.

“Customers have different communication preferences, and they all react to messaging differently,” Olsen says. “You need to be able to have different messages for different customers, and technology and data have really helped us there.”

Indeed, most of the company’s enhancements are focused on the operational side of its business. However, while it isn’t overly reliant on product sales in its salons, there are some new men’s product lines that Great Clips has launched.

“We are working with manufacturers on the men’s product side and tying in with their promotions and veterans initiatives to respond to the male customer and find products that match the core audience,” Olsen says.

Where the company is primarily focused is on finding that sweet spot between face-to-face communication and leveraging technology with customers. Access to data and analytics is important, but so it personal interaction. Additionally, technology is helping with Great Clips training programs. The company is using a blended format so franchisees can enhance training for their stylists. “We want to limit classroom time and give the franchisees the training resources they need when they need it,” Olsen says.

Beyond technology, Great Clips is looking at making enhancements to salon décor packages and updating the company’s in-store aesthetic and functional elements.

“Right now, we are looking to transition into new design and functional aspects of the salons over time,” Olsen says.

“We are looking at things like having iPads in the salons, determining the future of the front desk, and finding ways to freshen up our look.”

As Great Clips moves forward, it knows that collaborative relationships with franchisees will continue to be critical to company success. The franchisees operate the individual locations, and Great Clips needs compliance and support as it seeks to have changes implemented as quickly and efficiently as possible.

“It is important that we are smart about where we make our investments and make sure we are putting them in the right spots,” says. “Our customers and providing franchisees the support they need to find and hire great stylists are top priorities. We want it to be easier for stylists to serve customers. As we determine where we make our investment decisions, we must help our franchisees to value their stylists and build great organizations that can achieve growth.” O 46

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SMITH DRUG 48 | HOMETOWN PHARMACY 52 | BENZER PHARMACY 56

Evolving Marketplace

The 2016 National Association of Chain Drug Store (NACDS) Total Store Expo allows retailers and suppliers to gain new insights into their businesses and companies.

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etailers and exhibitors alike will benefit from the 2016 National Association of Chain Drug Stores (NACDS) Total Store Expo, occurring Aug. 6-9 at the Boston Convention & Exhibition Center. NACDS Total Store Expo is a one-of-akind opportunity to gather and network to create a new dialogue that will drive not only the top line, but also operational efficiencies. The show allows attendees to come together across multiple functions and gain new insights into their businesses and companies. NACDS Total Store Expo provides a unique opportunity to delve into today’s evolving marketplace and set a course for the future.

NACDS’ Total Store Expo attracts more than 5,600 retailer and supplier attendees and is the industry’s largest gathering of its most influential leaders.

The show combines strategic and tactical business meetings between existing and new trading partners and is attended by industry decision-makers. As as tradeshow and senior-level conference blended into a powerful appointment-based show, retailers and suppliers will find innovative and cutting-edge programming designed to promote strategic and tactical collaboration across departments within their companies.

In addition to the connections made, attendees have the opportunity to hear

insights from panels of experts. The most notable being the keynote address, given

by Joe Scarborough and Mika Brzezinski of MSNBC’s “Morning Joe.” They’ll offer the latest election insights and a snapshot of the current political landscape, which will complement the insights delivered by other noted experts at recent NACDS events “NACDS Total Store Expo attendees are going to really enjoy getting an exclusive ‘weekend edition’ in Boston this year,” says NACDS President and CEO Steven C. Anderson, IOM, CAE in a statement. “It’s going to be fascinating to hear what they have to say from the stage about the way this presidential election is shaping up and about all of the related

political dynamics across the nation.”

A new attraction at NACDS Total Store Expo this year is the forward-thinking Vision 2027 exhibit. This exhibit will provide insights into the future of retailing and trading-partner collaboration, with a unique blend of technology and interactivity.

“Vision 2027 will be a must-see destination for retailers and suppliers in the NACDS Total Store Expo Exhibit Hall,” Anderson says. “The NACDS Total Store Expo presents a remarkable transaction of ideas, and Vision 2027 will be a tremendous part of that forwardthinking at this year’s event.”

For more information about the show, head to tse.nacds.org. O

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SMITH DRUG CO.

Building Solutions

Smith Drug Co. is transitioning from wholesaler to a complete provider for independent pharmacists through investments in new systems and solutions. BY TIM O’CONNOR

Smith Drug Co. is working to enhance independent pharmacies and make them a healthcare destination for consumers.

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Brian Purscell, senior vice president pharmacy solutions www.smithdrug.com Spartanburg, S.C.

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t prescription and over-the-counter drug wholesaler Smith Drug Co. the focus is on not only supplying its customers, but truly understanding how it can improve the pharmacy business. The company values people who have seen the industry from its buyers’ perspectives. Many on the leadership team, including President Jeff Foreman Rph, previously worked as pharmacists and former apothecaries lead many of the company’s initiatives. “I think it provides a unique advantage because we all have been where our customers are,” Foreman explains.

Smith Drug Co. wants to wield its leaders’ phar-

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macy backgrounds to provide consulting on the back end and help its customers move their businesses forward. “It’s not just about providing drugs at a good price but helping them create success in this new world we’re in now,” Foreman says. “If done right, independent [pharmacists] can absolutely win in the marketplace. Our goal is to give them the tools and guidance to make that happen.”

For more than 70 years Smith Drug Co. has operated as a traditional pharmaceutical wholesaler. The company’s three distribution centers in Paragould, Ark., Valdosta, Ga., and Spartanburg, S.C., stock and ship drugs, general merchandise and sundries to

Smith Drug Co. independent pharmacists throughout the South and Midwest. “We’ve always been known for customer service that is unsurpassed in the industry,” Foreman says.

The passing of the Affordable Care Act in 2010 signaled the beginning of a transition for the entire healthcare industry including the pharmacists on the front line of providing health care to patients. “Pharmacy right now is moving from ‘prescription drug is the product’ to ‘patient outcomes is the product,’” Senior Vice President of Pharmacy Solutions Brian Purscell, RPh says. “What we’re doing at Smith Drug is providing solutions to let independent pharmacists be part of that movement.

‘We’re focusing on making independent pharmacies better and making the independent a healthcare destination,” Purscell adds. Smith Drug Co. recently expanded its human resources and solutions programs to position itself to improve on the practice and business of pharmacy. The company’s goals are to support its pharmacists so they can practice at the top of their medical license, become the pharmacy of choice for customers and drive better patient outcomes.

The result of those efforts will be a different Smith Drug Co., one that offers a far more complete set of services for independent pharmacists. “We will be known more so in

the years ahead for being a solutions provider who also happens to have a very competitive pricing structure and broad assortment of pharmaceutical and over-the-counter products,” Foreman says.

Adding Capabilities To make that change, Smith Drug Co. is expanding on its distribution capabilities. “We are investing in technology to better drive solutions for us as a wholesale distributor,” Foreman says. Those technologies are aimed at making downstream customers more efficient.

One of the largest investments the company has made is in P4 Technologies cloud-based inventory-management system, which was fully rolled out in April. P4 is a predictive inventory system that looks at historical data for multiple years to determine what demand will be for products on certain dates. The system then generates a suggested order based on that data that Smith Drug buyers can use to procure supplies for the company’s distribution centers.

The result is that Smith Drug is better able to control its inventory and ship products out to customers when they need them. Order fulfillment under the P4 system has reached over 99 percent. “If it’s available to wholesalers and

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the pharmacists are able to have it, we’ll provide it for them,” Purscell says. “P4 Technologies is a leading provider of cloud-based forecasting, replenishment and inventory optimization solutions.

Since our business depends on customer service, it was important to choose a vendor that enables us to provide the best possible customer service level.”

Predictive stocking means Smith Drug has an appropriate amount of stock a week in advance of the buying rush, avoiding seasonal issues and leading to fewer problems with expiring drugs that don’t end up selling. It also enables the company to carry a larger assortment of products because it does not need to overstock. “We’re flexing up and down based on what we anticipate our need to be, which allows us to have more warehouse space to stock other items,” Purscell says.

“P4 allows us to maintain a leaner inventory, lowering our working capital needs, while at the same time improving in-stock service level performance to our customers,” Foreman adds. Smith Drug’s early success with 50

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the P4 system is encouraging the company to consider implementing some of the predictive inventory features at the pharmacy management level.

Smith Drug is still looking at how that process would work and where the benefits would be, but the program would likely fall under the company’s HealthWise Pharmacy Consulting Solutions offering. “HealthWise Pharmacy is really our banner program,” Foreman explains. “It’s our name, our mark. Everything we do will have HealthWise Pharmacy branding.”

The company is constantly exploring ways to expand those services. Foreman says the company’s clinical solutions are aimed at helping pharmacists improve their quality measures and getting them into programs for specialty drugs. In May, Smith Drug announced a partnership with Diplomat Pharmacy to offer access to a specialty drug network. Through that network, Smith Drug’s independent pharmacists can now provide full service for patients with complex chronic diseases such as cancer, hepatitis, multiple sclerosis and long-term conditions.

Smith Drug Co. Retail Services Most pharmacists don’t take business courses while earning their degrees. By providing services that can fill in that gap, Smith Drug prepares its customers to operate a successful business. The company can help independent pharmacists not only be better behind the counter and at merchandising, but also teach them how to manage a profit and loss statement, optimize staff and provide guidance on leasing.

On the consulting side, Smith Drug has retail specialists who can conduct an in-depth review of a pharmacy frontend, which covers the customer experience from the pharmacy counter out to the parking lot. Those specialists help pharmacists determine whether products are placed in the best locations, whether the store is properly merchandised for the season, and how the product selection fits the demographics of the community.

Smith Drug is boosting those services through technology. Parent company J M Smith Corp. also owns RxMedic, a pharmacy robot and dispensing automation company, QS/1, a developer of pharmacy management systems and Integral Solutions Group, which has the patent for ScriptChek, a “smart” label. Through those automation and software packages, Smith Drug can provide its customers

with full pharmacy solutions. The company has also partnered with Legisym to introduce a cloud-based controlled substance ordering system that makes it easier for pharmacists to manage orders.

Smith Drug Co. continues to explore technologies and services offerings that will create healthcare destinations and allow independent pharmacists to grow their footprint while continuing to offer personalized care to their customers.

The company is looking to further expand its P4 Technologies, LLC offering to customers and P4 Technologies, LLC is a leading provider of will continue to mainCloud-Based Forecasting, Replenishment, tain its intimate knowl- and Inventory Optimization Solutions. Our edge of the industry by solutions help Wholesalers, Retailers, and having staff with phar- Pharmacies to: accurately forecast customer macy backgrounds who demand, provide the best possible customer service levels with the least total inventory are better equipped to investment, minimize spoilage, cube out support customers. “Our trucks, maximize profits, manage LIFO invenspecial niche is taking the tories, adhere to fee for service agreements, profession itself and of- and more. We are proud to partner with fering resources that can Smith Drug to help them provide their customers with the best possible service levels. help independent pharVisit www.p4tech.com. macists win,” he says. O

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HOMETOWN PHARMACY

Bringing It Home

Family owned and managed HomeTown Pharmacy is growing its number of locations with a variety of services including specialty prescriptions. BY RUSS GAGER

HomeTown Pharmacy has 39 retail locations in Michigan and Indiana, and it continues to expand.

I Jim Grice, vice president www.hometown pharmacy.com New Era, Mich.

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n retailing as in wrestling, sometimes you have to get bigger to defend yourself. This was the case for Fred Grice Jr. and his brother Tim, who as small-town pharmacists enjoyed helping people they knew. “The reason that my dad and Uncle Tim formed HomeTown Pharmacy in 1996 was the realization that they didn’t believe they could compete in the future without building more critical mass, to have more buying power with vendors,” says Vice President Jim Grice, son and nephew of the founders. “Our growth has definitely been something we enjoy doing. We like growing our employee base and the communities we serve, but it’s just as much about survival to continue to be a viable player.”

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HomeTown Pharmacy has 39 retail locations in Michigan and Indiana, as well as four long-termcare pharmacies, two durable medical equipment centers and four compounding labs. The company has been expanding mainly through acquisitions of existing pharmacies that are looking for those economies of scale or for a company that can relieve them of the healthcare industry’s ever-increasing administrative load.

“Owners want to just deal with filling prescriptions and taking care of people,” Grice declares. “It is a shame. It’s sad that today’s environment has become so complicated between the different fees and credentialing. If you’re a single-store operator, you’re spending 50 hours a week filling prescriptions, managing the floor, but you’ve got another 20 hours a week of paperwork and managing the changes of just surviving in pharmacy today.”

That paperwork and management responsibility is what HomeTown Pharmacy relieves a company of when it is acquired. “In the last few years, the trend has been that more owners are staying on,” Grice reports. “They want the freedom to shed that ownership burden, but they still want to work and serve their community as a pharmacist. Our hallmark and what we sell to owners is the flexibility. We are going to structure a deal that works well with their wants and desires and ensures their legacy remains intact, if that is what they want. A lot of pharmacists have spent decades building their businesses, and for them to sell them is not something they take lightly.”

Approximately two-thirds of HomeTown pharmacies retain the businesses’ original names. “Our branding or in some instances lack of branding is situation-specific, depending on an owner’s wishes, reputation and the goodwill he or she may still have in a town,” Grice says. Pharmacies whose owners want to make a clean break with their former businesses are branded immediately with the HomeTown name once the sale is completed.

Some owners are paid in full for the sale while others receive regular payments for a period of years.

HomeTown Pharmacy “We’ve done them both ways,” Grice says. “We have an entire finance committee that is involved in negotiations.”

HomeTown Pharmacy’s acquisition approach has been successful. “Having 41 stores, you could say we do have a good track record,” Grice concedes. “They chose us to sell their businesses to as opposed to anyone else.”

Specialty Pharmacies Every HomeTown Pharmacy location provides high-cost, specialty medications that usually are available only through mail order because they are so specialized. These intensive therapies require special instruction for dispensing and clinical monitoring afterwards. They include oncology drugs for cancer care, biologic injectable and oral drugs for autoimmune disorders.

To provide these medications, HomeTown Pharmacy has a dedicated team in its home office to assist the stores by working with prescribers and insurers to secure benefits for the patients. This allows patients to pick up their medication locally and still receive the specialty services that aren’t usually able to be provided at a retail pharmacy. “Our specialty model is unique,” Grice maintains. “It’s a different breed of specialty pharmacy than what has been traditionally in the

marketplace. Our central site provides the back-end services that enables our retail pharmacies to provide specialty pharmacy care in the communities they serve.”

Receiving specialty prescriptions from other pharmacies by mail order usually requires 14 to 21 days. “We are considerably more efficient at getting patients their therapy in a shorter amount of time,” Grice maintains. “Not only are we fast, but patients are getting the personal care they expect out of a HomeTown Pharmacy. They know the pharmacist and can talk with him or her about their complex disease state.”

HomeTown Pharmacy’s specialty division QS/1 has been growing quickly from less than 2 per- QS/1 proudly supplies HomeTown Pharmacy cent of the company’s with retail and long-term care management total revenue to nearly 9 systems. Our complete and flexible solutions help streamline workflow, ensure Medicare percent currently. Total compliance and maintain patient safety. For long-term-care revenue nearly four decades, QS/1 has helped retail, is approximately 30 to 33 LTC and outpatient pharmacies as well as percent of the company’s HME businesses remain efficient, compliant and competitive with industry-leading, total revenue, and the rest innovative technology solutions. is retail sales.

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“I attribute our growth in specialty medications to our strategic specialty partnership with KloudScript, and the effort of my brother, Jonathan Grice, a pharmacist with an MBA,” Grice says.

“He is our vice president of pharmacy and has done an outstanding job growing the specialty division.” All facets of the family owned and managed company are growing, Grice asserts.

Long-term Care HomeTown Pharmacy has four longterm care pharmacies that deliver medications to patients residing in skilled nursing or assisted-living facilities, hospices or adult foster care. They are located to serve patients in Michigan, northern Indiana and Ohio from Ann Arbor, Kalamazoo, Grand Rapids and Traverse City, Mich. “Our growth in long-term care has been through new contracts with new facilities,” Grice says. “We brought on over 2,000 beds last year of contracted business.”

HomeTown Pharmacy also operates two providers of durable medical equipment such as walkers, crutches and other types of intensive medical 54

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equipment. These locations in Monroe, Mich., and Traverse City perform nebulizer treatments and continuous positive airway pressure therapy. They are accredited by the National Association of Boards of Pharmacy and the Joint Commission on Accreditation of Health Care Organizations.

Monroe and Traverse City are two locations for HomeTown Pharmacies’ compounding labs, along with two in Indiana. The labs do no sterile compounding but instead provide medications such as capsules, creams and suppositories for uses such as at hospices and for procedures such as hormone replacement therapy. Compounding allows physicians to customize prescriptions for a particular individual.

Replenishing Stores HomeTown Pharmacy sends out its own box truck and several trucks and trailers once or twice a month to its stores – which average approximately 4,500 square feet in size – to replenish front-end merchandise, which is stored in the company’s 14,000-square-foot distribution center in Newaygo. McK-

HomeTown Pharmacy esson is Hometown Pharmacy’s primary wholesaler for a large majority of the approximately 2,000 prescription drugs each store carries.

“QS/1 is our pharmacy processing system that tells us what is on-hand at every store and generates our drug orders based on reorder points,” Grice explains. “SureCost helps analyze who’s using what and assists in making the best purchase for each product. QS/1 is the primary partner for helping us manage our inventory.”

HomeTown Pharmacy advertises most on television, then print with direct mailers, coupons and catalogs. It also markets over radio and social media. “We do quite a bit with Google, Yelp and the different search domains,” Grice says.

Grice foresees expansion within the Midwest. “Our greatest challenge will be personnel – making sure we have the proper management in place at those stores,” he says. “We’ve got a very strong HR department. We’ve been able to attract and maintain very strong people in our workforce.”

Grice also targets hitting an average of 5 percent to 7 percent growth every year. “Some years we hit 15 percent, some years we hit 4 percent,” he reports. “We simply strive to achieve continuous growth, based on opportunities that exist or are created.”

He attributes the success of HomeTown Pharmacy to the company’s culture and beliefs. “We are people-focused; No. 1 on our customer, but then as a corporate office, our customers are our people – our employees,” Grice insists. “We always put that first when evaluating decisions. What is going to be best for the patron that walks through our door and the employee?”

Grice also cites determination as key to the company’s ongoing success. “As I’ve sat back over the years and watched my dad, uncle and grandpa, Fred Grice Sr., it is a commitment to getting up and going after it every day – not getting down or not getting too up – just being determined to continue to McKesson Corporation grow the business,” Grice At McKesson, we empathize with our concludes. He also cred- customers. We’re here to help them navigate its the employees. “You the complexities of the current healthcare can’t do all these things landscape and face their challenges headon. We’re investing in the resources and without fantastic people, tools to level the playing field and flip those and I truly believe we are challenges upside-down into opportunities, blessed with some of the helping these important caregivers keep best people working for their independence, compete against the chains & realize the best possible futures. this company.” O

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BENZER PHARMACY

Rx for Success

Benzer Pharmacy supports independent pharmacies so they can compete successfully against the national chains. BY CHRIS PETERSEN Alpesh Patel, president www.benzerpharmacy.com Tampa, Fla.

Mani Patel, CEO 56

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or generations, the mom-and-pop drugstore was a fixture of American life, but over the years the pharmacy landscape has come to be dominated by the rise of chains. However, that dominance is somewhat misleading, as Benzer Pharmacy President Alpesh Patel explains.

Although large pharmacy chains like CVS and Walgreens certainly make up a large portion of the market, the independent pharmacy remains a sig-

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nificant force. “If you see the numbers, there are about 28,000 independent pharmacies, as opposed to 10,000 for CVS or Walgreens,” Patel says.

The advantage chains have over independent pharmacies isn’t a matter of sheer numbers, then, but organization. Patel says chains have the advantages of branding and buying power at their disposal, and these can be powerful tools for drawing customers away from independent pharmacies. That’s why

“

The way the trend is going, independent pharmacies will have an edge [with local ties].

Full Support

Benzer Pharmacy exists, he adds – to provide the mom-and-pop pharmacy with the resources they need through its franchising program to put them back on a level playing field with the large-scale chains.

Since 2009, Benzer Pharmacy has been offering independent pharmacies the opportunity to become franchises, giving them access to the support of a larger organization as well as the market presence that comes with it.

Patel says that by getting as many independents together under one banner as possible and working together, they stand a much better chance of competing against the large national chains and have better opportunities to secure their futures.

”

One of the most important things Benzer Pharmacy offers independent pharmacies is a brand that can provide them with an identity, Patel says. The company currently has more than 50 corporate-owned locations throughout the Southeast and expects to have nearly 100 by the end of the year, with numerous independent franchisees added to that number. Having the Benzer Pharmacy brand attached to their locations means independents can present customers with a recognizable reputation in the marketplace. Additionally, Patel also says the company provides its franchisees with access to its services including online prescription refills, free medication flavoring and its ExpressPay system, which allows customers to enter their billing information online securely so they can grab their prescription and go or have it delivered straight to their home.

Another significant advantage Benzer Pharmacy provides for its franchisees is the buying power that comes with being a part of a larger organization. By becoming part of the larger group, independent pharmacies could benefit from Benzer Pharmacy’s purchasing power and experience significant savings over purchasing alone.

Patel says the company also provides its franchisees with savings by giving them July/August 2016

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Benzer Pharmacy

Benzer Pharmacy says the most important thing it supplies to its franchisees is its teamwork and cooperation.

full administrative support, handling their back-office operations and helping them keep their overhead expenses low and manageable.

Ultimately, Patel says, the most important thing Benzer Pharmacy supplies to its franchisees is the teamwork and cooperation of the company and so many independent pharmacies. He says the large chains siphon customers away from the independents because they can provide a united front and can leverage their size to provide stronger customer service. Benzer Pharmacy operates in much the same way for its independent franchisees. “Teamwork is what actually got us here,” Patel says.

Prepared for the Future One trend that is working in the favor of independent pharmacies is the move toward adding more clinical and consultation services. Patel says many independents, including many of Benzer Pharmacy’s franchisees, have been offering those types of services for years, whereas the major chains have started to offer those services only within the last several years.

Because independent pharmacies have closer ties to the communities they serve, they have greater access to resources for clinical and consultative services, which puts them at an advantage as more pharmacy customers come to expect those types of services. “The way the trend is going, independent pharmacies will have an edge as far as that goes,” Patel says.

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The strengths that Benzer Pharmacy offers to its independent franchisees are fueling the growth of the company.

Patel says that the company continues to look for new ways to bring more independent pharmacies under its umbrella, and the company’s goal over the next few years is to bring in another 500 to 600 franchisees. The mom-and-pop pharmacy is far from extinct, but with the support of Benzer Pharmacy it won’t have to worry about the possibility. O

VICTORIA FINE FOODS 60 | WEIGEL’S 63 | 7-ELEVEN 66 | BOLLA 70 | MARSH SUPERMARKETS 74 | ALTMYERE’S BED BATH HOME 85 | BROTHER’S FOOD MART 88 | THE HARTLEY COMPANY 91 | WATERS TRUE VALUE 94 | CARTER’S SUPERMARKET 100 | TOBACCO SUPERSTORE 102 | THE GREAT AMERICAN HOME STORE 104 | KENYAN ENTERPRISES 106 | TOMMIE COPPER 108 | AMERICA’S FOOD BASKET 110

Retail

“We find the best distribution model for the market and slowly over time find ways to create the best value for the consumer.”

– Tim Shanley

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Retail

Victoria Fine Foods is dedicated to using verifiable, trustworthy partners for its ingredients to protect the integrity of the brand.

VICTORIA FINE FOODS

Setting Trends

Always looking to stay ahead of the curve, Victoria Fine Foods creates premium pasta sauces that meet the lifestyle needs of its consumers. BY ERIC SLACK Tim Shanley, CEO www.victoriafinefoods.com Brooklyn

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ounded in 1929, Victoria Fine Foods remains a Brooklyn-based company known as the leading slow kettle-cooked pasta sauce manufacturer in the United States. Victoria still uses only a handful of fresh ingredients for its specialty Italian sauces and condiments, and traditional slow kettle-cooking methods to ensure rich flavor and a homemade taste.

Committed to longstanding values of quality, honesty, authenticity and community, Victoria believes that ingredients come first. These values extend back to the company’s founding family, Italian

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immigrants who came to Brooklyn nearly a century ago. Although they sold the company to new ownership in 2011, the fundamental qualities that made Victoria Fine Foods remain intact.

“We have been professionalizing the company and taking this dominant Northeast-known brand across the country,” CEO Tim Shanley says. “The brand has a cult-like following in the Northeast because of its superior product and commitment to insightful innovation. Victoria has more than four times the Facebook following of our nearest premium pasta sauce-only brand, and we are only distrib-

“

Our cult-like following pulls products off the shelf so fast that it warrants direct distribution.

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uted in about 25 percent of the country at this point. We have maintained the authenticity of our recipes while instilling modern sensibilities into the business.”

Driven to Innovate

Victoria is focused on bringing new products and usage ideas to the pasta sauce category. The pasta sauce category has a low barrier to entry, so Victoria knows it is important to stand out.

“We have been innovative and ambitious trendsetters from the beginning,” Shanley says. “We were the first to bring restaurant designs (Vodka sauce) to the market in the 90’s, we created our first organic line in 2005 before it was trendy, the first vegan Alfredo sauce, and we were the first major premium brand to label non-GMO certified. People trust our brand to bring them relevant innovations. You can say we were Brooklyn. Before Brooklyn was Brooklyn.”

Several years ago, Victoria Fine Foods was focused on modernizing its plant and instilling quality controls to support its innovation efforts – implementing manufacturing as a science. This helped the company make sure all of its lines were ahead of the highest standards and the best in class.

Because Victoria Fine Foods’ products are artisanal and cooked in a slow and hands-on manner, the company has also invested in ensuring consistency. For example, it uses imported Italian tomatoes, and it has narrowed it partners down to three processors in Italy to ensure quality in the supply chain.

“We have verifiable, trustworthy partners for all of our ingredients,” Shanley says. “We may pay more for ingredients, but there is a reason: It protects the integrity of the brand.

Ingredients come first. It’s why we put them on the front of the label.”

Now, the focus is on innovative products that solve consumer problems. The company says it will soon launch products that will help it stand out in the sea of red pasta sauce.

“We want to keep ahead of the nutrition and lifestyle wave that is hitting the food industry,” Shanley says. “We are mining proprietary research and technical relationships which July/August 2016

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Victoria Fine Foods has led to our recent offerings – Avocado Oil Marinara and Chef ’s Collection Pasta Meals. Being innovative with the brand helps us to stay ahead and be trusted. We also need to make sure we stay innovative with our accounts. By addressing their needs with items like private-label and seasonal products as well as promotions using modern lifestyle technology, we are coming up with solutions which support them, because ultimately, that is what matters.”

The company has even done in-home studies and followed consumers in stores to help understand how its products are bought and used. Some of this insight will likely come out in its next wave of offers, in the form of both products and packaging. Thought the company is not prepared to share these ideas yet, it should address the lifestyle needs of consumers by making products that are health and easier to prepare.

On the Move Expanding the brand’s reach is a clear priority. Victoria is the second-best selling premium pasta sauce in the country with less than half the distribution of number one and three.

The company would like to at least double the size of the business in the next few years and get to 50 to 60 percent of

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the country. Just like Brooklyn, it plans to work as hard as it can to meet its goals.

Recently, Victoria Fine Foods implemented a major change in its route to the market to best service its accounts.

The company used to use its own DSD (direct store delivery) for most of its distribution. That method can be a great way to introduce the brand and get the products on shelves, helping the brand build its presence. Now, as the company develops a market, it has much more flexible options and will work with accounts to best meet their needs.

“For instance, our cult-like following in the Northeast has made direct shipment to some accounts feasible,” Shanley says. “Our cult-like following pulls products off the shelf so fast that it warrants this direct distribution. However, some accounts like the extra service that comes with a third-party distributor, so we happily accommodate that as well. We are no longer a one-size-fits-all. We find the best distribution model for the market and slowly over time find ways to create the best value for the consumer.”

Victoria may seem like a high-ticket item compared to the mass-produced brands, but the company is confident that more consumers are willing to pay for a quality product with a clean, simple ingredient deck made just like you would at home. The company believes it can continue to overcome barriers as it works on growing its brand.

“What makes us different is our combination of authentic and ambitious,” Shanley says. “Italy Born. Brooklyn Raised.

What could be better than that? The best of Italy and with the modern ambition of Brooklyn. We will help consumers meet their lifestyles with delicious products, traditionally made in designs that speak to their social and health-conscious needs. We will continue to lead the premium pasta sauce category.” O

Retail

Weigel’s strives to be a premium store, as well as customers’ neighborhood store.

WEIGEL’S

Value Driven

Weigel’s is updating its stores for millennials while holding onto the old-fashioned service and community involvement that customers expect. BY TIM O’CONNOR

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o be a manager of one of Weigel’s Tennessee convenience stores, one must first be a Weigel’s employee. The company does not hire outsiders to run its locations. That restriction is one of the ways Weigel’s ensures its stores adhere it its customer service standards and rewards employees who embody its culture.

Weigel’s operates with a servant leadership philosophy. “We’re nothing without the team members that work in the store,” President Ken McMullen says.

“They’re the heartbeat of the company.” Weigel’s executives see their job as to support the in-store employees. From the first day on the job, Weigel’s workers are instilled with the idea that they are one of the most important pieces of the company. If they come to Weigel’s with the mindset of making customers happy then they are in the right place, McMullen

adds. “We really believe in our team members and they have a high level of empowerment to do what they need to do to service the customer.

Weigel’s prides itself as a convenience store company with old school values and a new school approach. “We are a premium store but we’re also your neighborhood store,” Charlotte Havely, director of marketing, says. “There’s a stereotype when it comes to a gas station. We defy that.” Every call to the company is still answered by a live person, a sign of Weigel’s commitment to customer service. At the same time, the company has invested in mobile apps and a loyalty program befitting of the digital age.

Keeping up with its customers has been a key tenet of the company since it was founded in 1931.

Back then, Weigel’s was a milk producer with four dairy cows on a 600-acre farm selling raw milk in July/August 2016

Bill Weigel, CEO www.weigels.com Powell, Tenn.

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10-gallon cans. William Weigel Sr. began bottling pasteurized milk in 1935 and the company soon built a home delivery service.

By the middle part of the century women began entering the workforce and the home-delivery business eroded without anyone home to receive the milk. The Weigel’s responded to the market shift by opening Jug O Milk, a drive-in milk depot, in 1958. Current CEO Bill Weigel expanded on that idea when he opened the company’s first walk-in milk store in 1964, which became one of the first convenience stores in Knoxville, Tenn.

The convenience store business has grown steadily in the ensuing decades. The company that had four employees in 1958 now has about 850 team members spread out over 63 stores, a dairy processing facility and a bakery. Despite those changes, it continues to be owned by the Weigel family, now in the fourth generation.

The company is celebrating its 85th anniversary with a campaign focused on surprising and delighting customer by introducing new products such as a line of premium chocolate bars made in the United States.

“We are an innovator in our market, continually overhauling the current model to satisfy our evolving customer expectations,” Bill Weigel explains.

Community Stores Much of Weigel’s success in building a customer base can be credited to the company’s involvement in the Knoxville community. “Our stores serve as a place where neighbors are serving neighbors throughout greater Knoxville,” Havely explains. The Weigel family has always seen the business as a way of bettering the lives of others. “We’re a strong part of each community we’re in,” Havely adds.

Two initiatives in particular deliver on that community promise. Weigel’s Family Christmas is a collaboration between Weigel’s and the Salvation Army to help disadvantaged families celebrate Christmas. Each holiday season since 1999, the company has provided $150 donations to each of 200 children selected by the Salvation Army. A force of about 400 volunteers then takes those kids on a shopping spree in local stores to fill out their Christmas wish list. The program has helped about 3,200 children during the past 16 years, Weigel says.

Another Weigel’s community program has been running throughout the company’s history. Weigel’s sponsored the Milk Fund that provides dairy products and food supplements to children and elderly citizens in the Knoxville area.

The program continues today and is funded through a portion of coffee, eggnog and cappuccino purchases during a limited period each year.

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tomer service values to create a welcoming shopping experience. “It’s not just about what we give back to the community; it’s the everyday level of service we provide,” Weigel says. The company instills its golden rules into every store employee: greet each customer, thank each customer, get to know your regulars by name, do not delay your customer and apologize for any delay, and accept and handle customer complaints with interest and urgency.

Staying Ahead McMullen says Weigel’s has never operated like a typical convenience store.

The idea is to create a premium look and offer high-quality products not often found in c-stores. Locations have a modern design and are kept clean, fresh and brightly lit. The food items inside are carefully chosen to exceed expectations.

Milk continues to be an important

ZipLine Bill Weigel and his team are one of the very early adopters of the ZipLine ‘Payments as Loyalty’ platform. Weigel’s vision, and willingness to think progressively, helped jumpstart a value added payment option that is now utilized by some of the biggest brands in the space.

part of Weigel’s DNA. The company sources its milk from east Tennessee dairy farmers. At the dairy, the milk is only cold pasteurized the old-fashioned way, allowing it to retain its natural creamy flavor. Being a small and local dairy, the company’s localized supply chain is able to bring the milk from farm-to-store within 24 hours.

Freshness is an important part of Weigel’s strategy. The company opened its own bakery, Red Barn Foods, in 2014.

The 12,000-square-foot facility makes daily delivers of donuts, cookies and muffins to Weigel’s locations throughout the region. The company is now expanding on that fresh concept with Weigel’s Kitchens inside some locations.

At the end of 2014, Weigel’s began introducing digital touch-screen kiosks where customers can place an order for a custom sandwich or pizza. Employees then prepare the meal fresh on site as the customer shops the store. Weigel’s Kitchens kiosks are now available in five stores and will be a part of all future stores and remodels.

Between 1999 and 2015, Weigel’s invested more than $120 million in new store builds, opening about 40 locations.

That process will only speed up in the coming years as the company expands. O July/August 2016

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Retail

7-Eleven’s complex but effective supply chain keeps stores’ shelves stocked with the items consumers want.

7-ELEVEN

Supplying Support

7-Eleven is working with its franchisees to understand how daily ordering patterns can impact the supply chain and ensure efficient stocking. BY TIM O’CONNOR

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Dean Burkett, director of demand planning and replenishment www.7-eleven.com Irving, Texas

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-Eleven Inc. is the leading name and most prevalent chain in the convenience retailing industry. Based in Irving, Texas, 7-Eleven operates, franchises or licenses some 10,700 7-Eleven stores in North America and each store provides approximately 2,500 different products and services that are designed to meet the needs of specific individual localities. Worldwide, there are more than 58,841 7-Eleven stores in 18 countries.

Of the 10,700 7-Eleven stores operating in North America, only a small percentage have anything resembling a backroom for stocking inventory. When the Twinkies run out, employees can’t simply go into the backroom and unload another

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case of the tasty snack cakes. Instead, 7-Eleven keeps their store shelves stocked by making daily deliveries to every store using a complex but very effective supply chain.

The company first instituted a daily delivery of fresh foods, bakery items and other perishable products throughout its nationwide network in 1994. At that time, 7-Eleven set up a sophisticated preparation and distribution system designed to minimize the number of daily deliveries to the stores from multiple suppliers. These centralized distribution centers (CDCs) have turned out to be very beneficial.

Through proprietary hand held inventory and ordering systems; 7-Eleven store operators place their

7-Eleven orders by 10 a.m. each day for deliveries out to the store that very same day. The computer system promptly combines these orders and transmits them to the CDCs, commissaries and bakeries that support these stores across North America.

One of the people behind the demand planning to support these efforts is Dean Burkett, 7-Eleven’s director of demand planning and replenishment. Before joining 7-Eleven a little over a year ago, Burkett worked at Sara Lee, Topco Associates and Abbott Laboratories holding various supply chain/logistics positions in inventory management, customer service, order processing, transportation and distribution center operations management.

Upon receipt of the stores’ orders, sandwiches, salads and baked goods are prepared fresh that same day. Fresh-food products are date/time stamped immediately after they are made. Other perishable products are delivered throughout the day, to be sorted for that night’s delivery. Trucks are then dispatched to deliver each store’s products between 9 p.m. and 5 a.m. the very next day.

To ensure the highest quality, the CDC facility follows stringent product-handling and temperature standards.

Products brought to the CDC are continually kept at required temperatures throughout food preparation, sorting and transportation cycles. The CDC also safeguards the highest food quality by shipping from temperature-controlled docks.

The company has made a big push in recent years to offer hot foods and fresh sandwiches. Two of its newest products are a $1.99 chicken sandwich and a similarly priced cheeseburger. Fresh foods are viewed as one of 7-Eleven’s biggest growth areas and a point of differentiation within the marketplace.

“Local CDCs and commissaries, make it possible for us to create the highest-quality and freshest foods for Logility our customers,” he added.

But with that freshness Logility is proud to partner with 7-Eleven comes expiration. All of to help them transform their supply chain.

Logility is a leading provider of collaborative 7-Eleven’s donuts, for exsupply chain optimization and advanced ample, are made within retail planning solutions that help medium, 24 hours of appearing on large, and Fortune 500 companies realize store shelves. At the end substantial bottom-line results in record time. of each day any leftover Logility Voyager Solutions is a complete supply chain management and retail optimization pastries are discarded, ofsolution that features a performance moniten by being donated to toring architecture and provides supply chain local food banks. visibility; demand, inventory and replenish“7-Eleven is vested in ment planning; Integrated Business Planning the quality of our prod(IBP); Sales and Operations Planning (S&OP); supply and inventory optimization; manuuct,” Burkett says. “We facturing planning and scheduling; retail make sure that at the merchandise planning and allocation; and store level we have the transportation planning and management. freshest items out in the 68

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marketplace.” The convenience store chain needs a fast supply chain to support that expectation of freshness. Gallons of milk, for example, go from cow to store shelves quicker than for most other retailers. With most retailers, typically milk is fresh for about up to a week after purchasing. With 7-Eleven’s speedy supply chain it means customers could bring home gallons that are good for up to two weeks.

The company’s commitment to its supply chain is an extension of CEO Joe DePinto’s belief in servant leadership – an inverse pyramid philosophy where it’s the role of upper management to support the retail employee who actually makes the sale. 7-Eleven is a company that understands its past and has a vision for how to improve for the future. The company is celebrating the 50th anniversary of the Slurpee® drink this year with unique flavors, promotions and special products such as a Slurpee-flavored donut.

Efficient Ordering One of the biggest impacts on the supply chain is the instore ordering. Each day, every owner takes inventory of his or her products; checks expiration dates and orders what is needed to replenish the shelves. To aid that process, 7-Eleven recently introduced a guided replenishment system. “The system generates a anticipated forecast of demand based on weighted sales from the previous forecast periods. That information generates a suggested order amount for each item at an individual store, Burkett says.

7-Eleven

The system is designed to be easy to use and more efficient while allowing stores to more quickly fulfill orders for items in low-velocity categories, reduce out-of-stock situations and grant employees more time to manage the quality of the inventory. However, to make the most out of this innovative system, stores must maintain a strong ordering discipline and perform accurate cycle counts.

Negating Errors The complexity of the supply chain process means there is room for human error. Distribution centers are automated but still require a significant amount of manual processes.

Human pickers are needed to take products coming in from the wholesaler and sort them into individual delivery routes, each of which may serve as many as 20 stores.

7-Eleven is working with its distribution operators to eliminate the opportunity for mistakes in order fulfillment.

Distribution centers are now outfitted with automated pick voice systems that inform workers via headset of what items must be selected and what bins they need to be placed in.

In March of this year, 7-Eleven took another giant stride forward in its supply chain efforts to reduce error when it invested in a planning system to manage demand and replenishment into its centralized distribution center. This system forecasts demand down to the store level by looking at a store’s take rate and actual consumption. There are number of reasons that result in order error. “Communication is

one of the most effective ways to mitigate these occurrences,” Burkett says.

Store owners themselves have a direct impact to the supply chain. Burkett is working to help inform franchisees as to how their own ordering patterns can create a ripple effect throughout the supply chain. The learning process begins when new franchisees attend a 7-Eleven Launch class designed to explain the day-to-day operations of their store, lay out the ordering process and familiarize attendees with the company’s various departments. Burkett introduced a supply chain element to that introductory training: the Pizza Game.

The Pizza Game is an exercise designed to simulate a number of key principles within 7-Eleven’s supply chain: manufacturer, wholesaler/distributor, CDC and store. Players take the role of one of those four areas and must forecast orders and fulfillment without verbal communication, earning or losing points based on inventory levels and ability to meet consumer demand. The object of the game is to meet store demand for cases of pizza through the distribution side of a multi-stage supply chain with minimal expenditure on back orders and inventory. At the end of the game, Burkett does a debriefing session with the attendees following every game to review the results of each team and discuss the lessons learned.

By opening up the communication between stores and the rest of the supply chain, Burkett and 7-Eleven are creating accountability and identifying the root causes of issues while simultaneously creating collaboration at all levels. O July/August 2016

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Retail

BOLLA

Being the Best

Bolla drives for perfection in its stores and all of its other businesses. The company continually works to be the top retailer in its region. BY ALAN DORICH

Bolla has five silos of business: retail, transport, construction, real estate and wholesale distribution.

F Harry Singh, president and CEO www.bollaoil.com Garden City, N.Y.

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or more than 30 years, Bolla Corp. has thrived under the strategic leadership of its founder, President and CEO Harry Singh. “He has always done what’s right for the business and surrounds himself with an industry leading team,” Director of Marketing Brett Atherton says.

“He has really built a strong family connection with his employees,” Atherton continues. “We drive for perfection and excellence and more often than not it turns out that way.”

Based in Garden City, N.Y., Bolla owns and operates gas stations, convenience stores, auto repair shops and car washes in the New York City, Long Island, N.Y., and New Jersey markets. Singh came to America from Punjab, India, in 1983.

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After doing a variety of jobs, Singh got the opportunity to take over a Mobil gas station in Brooklyn N.Y., one that he still operates today. He was so successful that he was offered another site within two years and the story had begun.

Since then, Singh has grown Bolla to more than 65 corporate locations and as well as over 50 dealer and supply sites. As a wholesaler distributor of Exxon, Mobil, Sunoco and Shell, Bolla has become the industry standard in the regions it does business.

But that is merely the tip of the iceberg. Bolla has five silos of business: retail, transport, construction, real estate and wholesale distribution.

“We look to have them all in sync,” Singh explains. “We focus our energies on where there’s

strong growth and where the opportunity lies…[then] we strive to execute flawlessly.”

Atherton attributes Bolla’s success to Singh. “I’ve known him for 20 of the years he has been in business,” he says. “[It’s all due to] his commitment to the business, his calculated risk-taking and his drive to be better than anyone else.”

Unique Offerings Bolla offers customers a very high-end product selection in its Bolla Market locations, Atherton says. For example, “We sell tilapia, salmon, chicken mar-

sala, and other sides at lunchtime that makes us a unique destination in the convenience store channel,” he says.

Offerings like these equate Bolla Market “to a cross between a convenience store and a Whole Foods, ”he says. “We have everyday convenience store products as well as many better for you options like salads, paninis, wraps and fresh fruit.”

“We make everything with fresh, never frozen ingredients, using highly trained chefs,” Singh says “and offer a number of high-quality proprietary lines like nuts, trail mixes and cookies.”

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Bolla The presentation of the stores sets Bolla apart. “We have a restroom that makes you think you’re in a high-end hotel with employees that are in crisp uniforms, with a tie and name tag,” Singh explains. “There is a lot of things going on in our store that makes Bolla a leader and innovator in the industry.”

Maximizing Profitability Bolla regularly copes with challenges in its market ranging from labor costs to changes with competition. “Trying to differentiate ourselves in the competitive marketplace is a challenge,” Atherton says.

“We continue to maintain growth plans but we never take our eyes off our market that has been saturated with extensive competition and has a customer base that faces some of the highest cost of living expenses in the country,” he says, noting that the company has to look at how it manages its expenses and overhead costs. “All of those things are hard to manage, and as we grow, even more so.”

“All of these challenges remain Bolla’s focus as we try to meet our consumers needs and achieve profitability goals,” Singh says. Fortunately, Bolla has been able to effectively manage these challenges for 27 years.

“We have an extensive pipeline of sites that are in the permitting process in New York and New Jersey,” Singh says. “We continue to maintain growth plans but we don’t take our eye of our current assets and maximizing their potential.”

State of the Art Bolla has invested in new technology for its stores, including inventory systems, Atherton says. “We do various scanning all around the store to order and check inventory levels as well as monitor store performance with a state-of-the-art back office system and price book,” he says.

The locations also use LED lighting, “Which is something that the customer appreciates and better presents the products we sell,” he says. “The customers like a warmly lit, friendly environment.”

The company also is currently experimenting with loyalty programs, where visitors to its stores can receive rewards, including free cups of coffee. “We’re still navigating through that to find the best alternative to encourage loyalty from our customer base,” he says.

The Right Formula Bolla has developed a culture where people are expected to work hard and deliver their best. However, “We have a family atmosphere,” Atherton asserts. “There’s a lot of before and after work events, and quick meetings with dinner.

“It just builds the relationships between everyone who’s working here,” he says, noting that it also keeps everyone in sync. “This corporate culture has made us the industry leader in this region.”

Although it can be tough to operate in Bolla’s markets, “We’ve done it and exceeded everyone else in the country 72

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“

Every day, our goal is to be the top retailer in our region. We’re going to continue to grow site count.

”

that operates in a suburban or rural area,” he says. “Our culture is definitely directed towards maximizing every opportunity that the market presents.”

It also has a simple management structure with Singh and members of his family involved in the business every day.

“We’re able to be very nimble and make decisions quickly,” Atherton says.

Bolla will continue to grow via its five business silos, Atherton says. “Every day, our goal is to be the top retailer in our region,” he says.

“We’re going to continue to grow site count,” Singh says, noting that the company plans to grow its construction, real estate and transportation business, which delivered more than 250 million gallons of fuel in 2015. “We feel like we have the right formula.

“Our plan back in 1989 was to build a business, brick by brick,” Singh says. “We have seen great success in our 27 years of business and continue to focus on our core businesses, maximizing every opportunity and making Bolla a great place to work and build a rewarding career.” O July/August 2016

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Retail

Founded in 1931 in Muncie, Ind., Marsh Supermarkets now has 72 stores located in Indiana and Ohio.

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Marsh Supermarkets

MARSH SUPERMARKETS

Standing Tall

A pioneering history of being the local supermarket of choice has Marsh Supermarkets poised to build off a strong legacy. BY ERIC SLACK

M

arsh Supermarkets is built on tradition and innovation. Founded in Muncie, Ind., in 1931, Marsh is celebrating its 85th anniversary in 2016. Today, the company’s operations include 72 stores in Indiana and Ohio, 38 of which David Kuncl have pharmacies. www.marsh.net “The Marsh family owned the comIndianapolis pany until 2006, when it was acquired by Sun Capital Partners, who continue to own it today,” Chief Merchandising and Marketing Officer David Kuncl says.

“Marsh has primarily been an Indiana- and Ohio-based company, growing through multiple, small acquisitions.

We’ve always been known as the local supermarket with a tradition of quality, service and innovation.”

departments all standing out as points of differentiation. All of the company’s fresh departments are focused on delivering quality and uniqueness across products, service and the overall eating experience.

“Our meat programs are anchored by black Angus beef, as one of four retailers in the U.S. with U.S.D.A. ‘Certified Tender’ beef,” Kuncl says. “In 38 of the 72 stores, we also offer a full line of locally produced Angus beef, pork and chicken.”

Kuncl maintains that, to his knowledge, Marsh Supermarkets is one of only four retailers in the United States that sells beef certified “tender” by the United States Department of Agriculture. “It is a specific grade that undergoes a shear test on the product to determine how ten-

Excellent Foundation Marsh Supermarkets has already carved out its place in history. The first package with a UPC scanned in a grocery store was in a Marsh Supermarket in Troy, Ohio, in 1974.

That store still operates, and the scanner and package are in the Smithsonian.

Now the company is looking to grow both through development of new stores and acquisitions. Marsh is focused on opportunities in contiguous geographies in its current market area.

What has helped set the company apart historically is its expertise in fresh products. Marsh is known for its meat programs first and foremost, with deli, bakery and produce

“

We’ve always been known as the local supermarket with a tradition of quality, service and innovation.

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Marsh Supermarkets

der it is,” Kuncl says. “It goes through a unique process during the harvesting of the animal that ensures tenderness in the prime cuts.”

That level of quality extends to other products in the

meat department, all of which are cut in the store. “We offer a higher-grade product day-in and day-out than our competition in this market,” Kuncl insists. “We’re the only retailer in this area that has a full selection of locally produced beef, pork and chicken. We have a whole line of Indiana- or Ohio-raised meat produced primarily on small family farms.”

Meat isn’t the only department that sets Marsh Supermarkets apart. Approximately half of Marsh Supermarkets’ bakery departments fry their donuts fresh each morning. “It’s a pretty noticeable difference in the overall flavor profile,” Kuncl asserts. “It’s an indulgent item – it’s not health food, but few people are eating donuts because of the nutritional profile.”

The bakery departments also are known for their cakes.

“Our cakes have been part of a lot of family celebrations over the years,” Kuncl notes. “We’re very proud of our decorators and their skill and ability to create special cakes for special occasions.”

Additionally, the company has developed a diverse store

“

We offer a highergrade product day-in and day-out than our competition in this market.

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Sahlen’s Sahlen’s hot dogs are a brand-new item in Marsh Supermarkets. They have been a staple in Buffalo, New York for many years and are becoming a sought-after item in many new markets around the country. We have seen success with our hot dogs in Arizona, Michigan, the Carolinas, Florida, and Ohio.

Our Off the Bone Smokehouse Ham has been a well-established item in Marsh Supermarkets for around 20 years. Our items are unique because we only use fresh whole muscle raw materials.

No Water, MSG, or Nitrates added, and Gluten Free.

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Marsh Supermarkets base across its markets. Growth through acquisition has created a large variation in formats, from 12,000 to 90,000 square feet in locations ranging from downtown Indianapolis to rural Amish country in central Indiana. As a result, Marsh now serves all customer and community types. The

company is succeeding by customizing each store to the community it serves.

“What is common across all of our company’s locations is a focus on delivering a ‘north of center’ experience that is anchored by elements such as better fresh products than the competition, better service and the most

convenient format,” Kuncl says. “Although our key competitors continue to build big stores, we really like the mid-sized conventional food store that can provide customers with a full selection in a convenient and efficient footprint that can be shopped effectively by time-starved consumers.”

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Competitive Environment As the company considers its future, it is careful to pay close attention to industry developments that are taking place in its market. Firstly, its markets have about 30 percent more grocery stores per million people than the average market in the United States. New competitors are continuing to enter the market, and existing competitors continue to deploy significant capital into the market.

“More doors are chasing the same business today,” Kuncl says.

“Between new capital and little market growth, we now have a very competitive marketplace,” he continues. “Amazon also has multiple distribution centers located in the Indianapolis metro region, and this is one of the areas that has two-hour 80

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Prime delivery. All of these things are making this region a great place to buy groceries. The competition makes everyone better, and we don’t see it letting up anytime soon.”

Marsh plans to continue responding to this situation by competing on a number of differentiating points. This includes everything from fresh food quality and selection, promotional pricing and events, service, e-commerce Instacart home delivery and curbside pickup to convenient locations, meal solutions, better-for-you products across the stores and continued efforts focused on the improvement of its everyday pricing and store environments.

“Our core competencies are fresh foods, service, promotional value, rewards programs and community involvement,” Kuncl says.

“

Our core competencies are fresh foods, service, promotional value, rewards programs and community involvement.

Invest in Success Not surprisingly, Marsh has been focused on key investments to support its strengths. In the digital arena, the company has launched a new website and digital apps, and it has invested in digital savings tools. These efforts include investing in Ibotta, iBeacons in all stores, inStream targeting at the point of sale and Instacart home delivery and curbside pickup.

Gonnella Baking Company Designing original breads and rolls with legendary quality, Gonnella provides an extensive variety of Frozen Dough and Thaw & Sell items to in-store bakeries nationwide.

The company’s modern facilities have been recognized by BRC Global Standards and AIB International for quality in food safety.

”

With iBeacons, Marsh Supermarkets have been equipped with transmitters called beacons - to wirelessly send special offers directly to customers’ smartphones based on their location in the store. “We were the first grocery chain in America to be fully beaconized in all our stores,” Kuncl maintains.

At checkout, customized offers that are printed on receipts are targeted to individual customers by technology from inStream. Additionally, Marsh Supermarkets is participating in a pilot program for the ViVino app, which provides smartphones and tablets with access to a wide array of information and reviews about wine.

Other technology investments are aimed at the back of the house. The company has invested in a new JDA store replenishment system, as well as July/August 2016

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a new enterprise data warehouse and customer data management tools. In addition, Marsh has invested into space planning upgrades to facilitate store-specific assortments.

Product improvement programs are focused on areas such as its certified tender beef program; local beef, chicken and pork programs; expanded cut and prepared products in produce; new chicken and salad programs in the deli; and new breads in the bakery.

Marsh Supermarkets is experimenting with the preparation and specifications for the fried and rotisserie chickens it produces in its deli departments. The company’s goal is to continue to improve the customer experience with fresher and healthier preparations. It also cooks up Noble Roman’s pizza in many of its stores and is working with that company on hot and refrigerated takeaway products.

“Behind-the-glass” foods - such as salad bars and deli items including potato and pasta salads - are being improved to have cleaner labels while being healthier and tastier. Portion-controlled meals (such as Blue Apron) that need minimal home preparation are being provided by a local company called Fresh Artistry.

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“

We have a lot of very experienced, highly caring associates who have spent a lot of time at the company. deliver international food options will grow,” Kuncl says. “We must also provide convenience, as the consumer is demonstrating a willingness to pay for additional preparation versus doing it themselves.”

Store improvement projects are also on the table. “We plan to have refreshed and/or remodeled 52 of the 72 stores by the end of 2016, with the remainder of the stores touched by the end of 2017,” Kuncl says.

Indiana Packers Corporation Indiana Packers Corporation is a fully integrated pork company, providing the freshest, premium-quality products to the food industry. Home of the Indiana Kitchen brand of premium pork products, Indiana Packers places a high-value on relationships with our employees, our Midwest community, and our partners such as Marsh Supermarkets.

”

Relationships with suppliers will be important as well. “Our main selling point is that we are local,” Kuncl says.

“There is no other corporate approval you need when you do business with us.

The decisionmakers are here and not in some corporate parent elsewhere. We can react quickly.”

All these efforts – the remodeling, expansion and technology – are contributing to Marsh Supermarkets’ continuing success for the last 85 years, which Kuncl says will be celebrated with customers and employees in August. He attributes the company’s longevity to its employees.

“We have a lot of very experienced, highly caring associates who have spent a lot of time at the company,” Kuncl emphasizes. “We have multiple generations that have worked for the company and many employees are friends July/August 2016

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“

We have to be the best at what we do, and we believe there is a clear spot for our proposition in this market.

”

of friends. It’s been a pretty good place to work for a lot of people for a long time. We are proud of the business we have built together.”

Clearly, the challenges Marsh faces include an overstored marketplace, fast-casual dining, Amazon and recruitment/ retention. Trends such as format changes to traditional brick-and-mortar competition and the ongoing expansion of e-commerce, along with customers demanding better quality products and trending away from stocking the pantry in favor of smaller trips, are also complicating the market. Although these trends and challenges show no signs of dissipating, the company is confident that it will be able to compete.

“We have to be the best at what we do, and we believe there is a clear spot for our proposition in this market,” Kuncl says. “We can compete effectively on quality, nutritional profiles and convenience.” O 84

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Retail

Altmeyer’s diverse portfolio includes bedding, home decor, kitchen linens, bathroom accessories and window treatments.

ALTMEYER’S BED, BATH & HOME

All-Around Quality

Offering a wide product selection in-store and online, Altmeyer’s Bed, Bath & Home has grown to serve the greater Pittsburgh market and beyond. BY ERIC SLACK

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ounded in 1941, Altmeyer’s Bed, Bath & Home has come a long way from the first Altmeyer Home Store in New Kensington, Pa. Over time, the company has made itself a part of its communities, and today Altmeyer’s Bed, Bath & Home includes 11 stores serving Pennsylvania residents.

“We’ve built a fairly strong presence in the sector and our business holds up against larger competitors,” President Robert Altmeyer says. “We offer a comfortable shopping experience for our customers.”

What People Want With 75 years of knowledge and expertise in the textile market, Altmeyer’s Bed, Bath & Home offers a diverse portfolio of products at affordable prices.

The company has created a wide selection of bedding, home decor, kitchen linens, bathroom accessories and window treatments.

“Consumers want convenience and they want service from a knowledgeable staff,” Altmeyer says.

“If you’re selling custom window treatments or sized items, it is hard to pick them off the rack. We July/August 2016

Robert Altmeyer, president www.bedbathhome.com Delmont, Pa.

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Altmeyer’s Bed, Bath & Home

“

We know our market well and offer good value in nice stores that offer a personal shopping experience.

”

offer very good value to our customers, and we blend in a lot of closeout products and assortments in our mix. That gives us a lower cost basis, and we can pass the value to customers. We provide customers with an appealing store, and that brings us regular visitors. We give them a unique product difference.”

At its traditional brick and mortar stores, Altmeyer’s has earned the trust of its customers by satisfying their needs in terms of price, selection and service. The company believes that being a superior business requires providing exceptional service before, during and after the sale. The company can

not only help customers in need of bedding, bath accessories and curtains, it can also help with home décor such as custom windows and custom table pads.

“Our company has built a strong window business, and we have unique offerings such as cut-and-sew ready-made drapes,” Altmeyer says. “We can tailor our ready-made products for our customers. In addition, we know our market well and offer good value in nice stores that offer a personal shopping experience. Additionally, we’ve built good relationships with manufacturers because we have been buying for decades.”

Its strong ties with manufacturers are important for Altmeyer’s success. The company has excellent credit and a strong payment record, so manufacturers can have confidence when working with Altmeyer’s. The company also does not put conditions on what it buys from manufacturers, whereas deals at larger retailers might have some strings attached.

“Manufacturers know working with us means a clean deal from the get-go,” Altmeyer says. “This allows us to work off of a different cost structure, because we have a cleaner and quicker approach. We can move very quickly, and we watch our inventory levels very closely.”

Always looking to do better, Altmeyer’s has been making improvements to its stores. The company is in the midst of transitioning to chip credit card technology to make life easier for staff and customers, as well as to help with data security. Altmeyer’s also renovates and updates the floor plan of its stores every few years.

The Future is Now Beyond the physical world, Altmeyer’s has been a player in the virtual world for many years. The company first 86

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launched its BedBathHome.com website in 1997, and it also has a presence on e-commerce sites such as Amazon, Ebay, Sears and Houzz.

At BedBathHome.com, the company offers the same merchandise selection that can be found in its stores, as well as free standard shipping on orders over $49. By creating an online shopping experience that is informative and easy and coupling it with phone support provided by experienced customer service representatives, Altmeyer’s has been able to expand its business to serve customers far beyond its Pennsylvania footprint.

“We have a very robust e-commerce website that was just redone at the end of May,” Altmeyer says. “Our website and new online shopping cart are critically important for us.”

Altmeyer’s knows this may not be the best time to aggressively pursue expansion due to factors such as an unstable economy and an election year, and while many in the retail world face declining numbers. But Altmeyer says the company is comfortable taking a conservative approach for the time being while keeping its eyes open for opportunities to grow.

“We know that we have to stay on top of consumer styles and trending colors, and we know that retail is very seasonal now and we need to push seasonal items early,” Altmeyer says. “Our focus now is on fine-tuning the brick and mortar stores so we can increase their profitability and then eventually expand to new similar markets. We want to streamline our operations so all of our stores have similar looks, merchandise and presentations, and then look to expand beyond the market when the time is right. Our online presence and technology is also an area where we look to be ahead of the market, and a big part of future will be making sure we are a viable online retailer.” O July/August 2016

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Retail

BROTHER’S FOOD MART

Convenience Cuisine

Brother’s Food Mart has won rave reviews for its famous fried chicken, along with praise for its service and cleanliness. BY ALAN DORICH

Brother’s Food Mart says its beloved fried chicken is helping to fuel the company’s expansion.

P Imad “Eddie” Hamdan, CEO Harvey, La.

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eople do not normally think of convenience stores as places where they can get top-quality cuisine, but Brother’s Food Mart has proved them wrong. In fact, CEO Imad “Eddie” Hamdan says the chain’s fried chicken has become a rite of passage for people when they come to New Orleans.

“If you go to Miami, and [you meet] somebody who has been to Louisiana, they’re going to know about Brother’s,” he says. “When people come to New Orleans, they’re going to try Brother’s chicken.

It’s just something that you have to do.”

Based in Harvey, La., Brother’s Food Mart operates several locations in New Orleans and other

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cities in its home state. Hamdan notes that the company opened its first location in 1991 before moving three years later to a larger spot across the street that had been owned by its competition.

That new location had gas pumps, which marked the company’s move into selling fuel. Brother’s also moved into selling its now-famous fried chicken, which was unique for its venue.

“It was really something different,” Hamdan recalls. “Back then, they didn’t have that type of food in a gas station. [At first], people did not trust it, but it tasted really good.”

Brother’s Food Mart had a single location for many years, then began expanding in 2001. Today, it

Brother’s Food Mart

Partners in Care

Brother’s Food Mart regularly partners with charities, CEO Eddie Hamdan says. These include including St. Jude Children’s Research Hospital in Baton Rouge, La., which strives to extend the power and care of its parent organization to the rest of the state.

Brother’s Food Mart partnered with Crescent Crown Distributors to do an annual pin up campaign to help support St. Jude.

Brother’s Food Mart started doing this in 2014 and has done it for two years. It also has partnered with: • Volunteers of America • Catholic Charities

has 40 locations in Louisiana that not only sell fried chicken but also po’ boy sandwiches and meat pies, Hamdan says.

Brother’s Food Mart also maintains the level of quality in its famous chicken across its locations. “We’re consistent with the taste, the breading and everything,” he declares. “If you taste something at one store, you’ll taste the same thing at the other store.”

Not only has Brother’s Food Mart earned a loyal following from Louisiana locals, but also praise from celebrities.

Recently, “Captain America: Civil War” actor Anthony Mackie mentioned the store on “The Late Show With Ste-

phen Colbert,” while comedian/actor Kevin Hart praised its chicken on Twitter.

“I can’t stop thinking about how good it was,” Hart said in his tweet. “I think I ate 40 pieces over the last three days.”

Hip-hop artist Lil Wayne also held a Brother’s Food Mart cup on a cover for a single. Hamdan adds that people also praise the stores for their service and cleanliness.

Growing Its Footprint Brother’s Food Mart is in expansion mode, Hamdan says.

“We’re in the process of opening another five locations in New Orleans,” he says.

Sometimes the company’s growth can be difTyson Foods ficult, Hamdan admits.

Although Brother’s Food In the Fall of 2012, Eddie Hamdan walked Mart employs a staff of into the Tyson Foods Booth at the NACS Show wanting to discuss his poultry business. At more than 300, “There’s the time, we weren’t familiar with Brother’s, a lot of challenges finding though it was clear Eddie knew what his chain stood for and had a vision for its future. great people,” he says.

The Big Easy also pres- That day, a successful partnership began, ents some challenges in and Tyson Foods is proud to continue to be the poultry supplier for Brother’s Food Mart. finding locations. “It’s

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real tight on real estate in New Orleans,” he says. “You can’t just grow as big as you want there.”

The company’s reach outside of the city of New Orleans has helped. For instance, “We just opened our fourth store in Baton Rouge, [La.], and we’re looking to grow more in that market,” he says, noting that Brother’s Food Mart is considering opening stores in St. Charles Parish, Lafayette, Laplace and Kenner, La.

Something Good Hamdan is proud of the culture at Brother’s Food Mart, which gives each of its locations a sense of autonomy.

This results in “all of the managers [acting] like they’re the owners of their stores,” he says. “They treat it like [it’s their property].”

The company also maintains a “family” atmosphere, with a very low turnover. “We promote from within the company,” Hamdan says. “We have an advantage over our competition because people can grow with [us].”

Hamdan also takes pride in his company’s success, which has found it triumphing against majors.

Brother’s Food Mart also is confident when it comes to its fuel sales. “We’re not afraid of anybody,” he says. “We know we have something really good.”

He adds that Brother’s Food Mart 90

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has won awards since 2011 for its cleanliness from ExxonMobil, one of its fuel suppliers.

“Since we started with them as a distributor, we’ve been winning them every year,” he says. The company also is a distributor for Shell.

Hamdan predicts massive growth for Brother’s Food Mart in the future. “We want to have 100 sites,” he says. “Right now, we’re also [implementing] a back office system that will make us grow [further].”

The system will allow Brother’s Food Mart to grow into other surrounding cities and possibly into other nearby states. The system is called Professional Data Solutions Inc. (PDI) and enables convenience, wholesalers and foodservice operations to do business electronically. PDI is built to meet the company’s business needs, allowing it to grow its operation. O

Community Coffee Company Founded in 1919, Community Coffee Company is an importer, roaster and distributor of the highest-quality premium coffees, using 100% select Arabica coffee beans.

Community® coffee can be found in grocery and convenience stores, offices, hotels, and many of the best restaurants throughout the Southeast, and is available worldwide through CommunityCoffee.com.

Retail

THE HARTLEY CO.

Through the Generations Ohio-based convenience store operator and supplier The Hartley Co. remains strong and continues to grow after 140 years with 40 locations. BY STEPHANIE CRETS

The Hartley Co. has a vision to become a household brand throughout Ohio.

T

hrough five generations and 140 years in business, The Hartley Co. is still going strong with 40 locations across southeastern Ohio. President Doug Hartley says he’s proud of the company’s long-term history and that it has endured through so many generations. “Our niche is our history and the fact that we’re small-town stores, but we’re not a one-store operator either,” he says. “We excel in small neighborhoods and towns.

We give that community feel in the areas we’re in.”

The Hartley Co. was originally a roofing company called W.H. Hartley and Sons in 1870. But in the early 1900s, the company added hardware stores to its repertoire, along with filling stations. Its first convenience stores opened under the Starfire banner in the 1970s and growth continued. Now, the Hartley Co. operates 20 stores and supplies 20 more.

“Right now, the mission is to grow the brand in Ohio,” Hartley explains. “If opportunities come along to go outside of Ohio, we may consider that.

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Doug Hartley, president www.starfirestores.com Cambridge, Ohio

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The Hartley Co.

The vision is to become a household brand in Ohio. Our Starfire brand will be known throughout the state. That’s the ultimate vision.”

Hartley says that all he wanted to do growing up was water ski, which is not something that Ohio traditionally

offers. “I didn’t end up doing that, obviously,” he says, laughing. When he came back from college, Hartley told his dad he was thinking about getting into architecture, and then he was offered a job at the family business.

“Before that, I did the typical family business thing, working in the summers doing odds and ends kind of jobs,” Hartley says. “I took the job and worked my way through the ranks from the bottom. Over the last five or six years, the reins started to be passed on to me, and I became president three years ago.”

Always Evolving The Hartley Co. keeps customers coming back by continuing to evolve its current offerings.

“We’re constantly doing upgrades and cleaning up our portfolio of lower-performing stores that don’t work for us and reinvesting [in] the ones we’re keeping. If opportunities come up to buy, we’ll look at those. But the focus is improving the portfolio as it is.”

The company focuses on improving customer service, the quality of the products and environment and remaining competitive on pricing. Recently, the Hartley Co. added LED lighting to all of its stores, both interior and exterior, to brighten everything up, save on long-term costs and make people feel more comfortable when gassing up at night.

In addition, the company dove into craft beers to add more diversity to its current product offerings and began selling its own sub sandwiches. “Another Crappy Gas Station Sandwich” sales have quadrupled since sales began in June in just three Starfire locations in three key markets.

Those three sites are also responsible for making, packaging and distributing the sandwiches that will eventually roll out to 19 Starfire locations.

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“

We excel in small neighborhoods and towns. We give that community feel in the areas we’re in.

”

Strong Relationships Employee turnover is a challenge for any convenience store operator, but the Hartley Co. combats this through regular communication, a positive atmosphere and by highlighting exceptional employees.

“We’ve been doing better communication and more training, which has helped people have a positive attitude,” Hartley notes. “We give out bonuses, promote from within and recognize those people that truly stand out. That’s how we’ve helped our turnover.”

Hartley credits much of the company’s long-term success to its relationships with vendors, suppliers, employees and customers. “We’ve been able to maintain long-standing relationships through integrity, honesty, being transparent and being cooperative,” he explains. “You don’t want to burn bridges or upset people. We just work well to-

gether with our vendors and suppliers through negotiation and compromise.

We still have vendors we do business with on a handshake, which is really nice and rare. We just do what we say we’re going to do.”

The Hartley Co. supports a number of community events and organizations through fundraising efforts including raffles, in-store “donate your change” months and an annual golf outing.

Charities supported by the company include the Leukemia and Lymphoma Society (LLS) and the Children’s Craniofacial Association (CCA). Customers buy a balloon for one dollar, and through that, it has raised more than $100,000 in the last seven years.

“Charity at the local level is very important to us,” the company says. “It gives us a chance to give something back to the communities that have helped to make us a success.” O July/August 2016

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Retail

The product mix at Waters True Value’s stores includes a full line of hardware, farm, ranch and pet supplies, as well as gifts and a rental division.

WATERS TRUE VALUE

Since 1894

Waters True Value does not let its history or family ownership keep it from innovating with new products, methods and layouts for its seven Kansas stores. BY RUSS GAGER

B Scott Waters, president and CEO www.waterstruevalue.com Salina, Kan.

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eing innovative and not being afraid to try new products has kept Waters True Value hardware stores prospering for six generations since 1894. For more than a century, the Kansas stores have evolved their product mixes as times and tastes have changed. In the 1950s, the store sold farm implements such as tractor plows and feeders. It also has at various times sold motorcycles, motorboats, sporting goods, firearms and appliances, but not anymore.

Now the product mix at the seven stores – serving Dodge City, Emporia, Great Bend, Junction City, Manhattan, Salina and Wamego, Kan. – includes a

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full line of hardware, farm, ranch and pet supplies, gifts and a rental division. “We change throughout the years to what our markets need,” President and CEO Scott Waters points out.

Evolving the product mix is one of the reasons Waters cites for the company’s success. “The No. 1 thing is our ability to change,” he emphasizes. “We are always changing. About the time you get comfortable is the time you need to start changing again.

We never get comfortable.”

One product Waters took a gamble on recently was a $400 cooler. “That is a product we jumped in full force with and that has done well for us,”

Waters True Value Waters maintains. “We adopted it very early when it first came out. We were the first in our industry. Now everyone has followed.”

Another gamble that Waters True Value won a few years ago was on the Multi-Tool, which combined just about every tool a home handyman would need into one device. It proved popular with early adopters. “It’s a really expensive tool, but it was a big deal,” Waters recalls. “We sold a lot of them, but several years down the road, everyone makes one and they are really not that popular anymore because they’re so expensive. There’s a lot cheaper knockoffs that aren’t as good and do the same thing for a quarter of the price.”

Waters invests heavily to send buyers to True Value’s spring and fall shows so they can stay on top of these trends.

For the first time in May, they also attended the National Hardware Show in Las Vegas on an exploratory basis.

“We’re still deciding if it was worth it for us,” Waters says.

The dealership also attends gift shows and a rental show.

Risky Business Not every new product is a success. “There’s been plenty of times when we jumped into something that didn’t work,” Waters concedes. “I would have never thought in a million

years people would spend hundreds of dollars on a cooler. It just goes to show that you’re always learning new things, and your customers change. We’re always experimenting with new things. It’s risky, but it’s something I believe you have to do to stay current in the industry. I believe if you don’t and you just stay with the same thing, eventually you’ll die.

“We aren’t afraid to change at all,” Waters stresses. “We’ve always been very aggressive, never conservative at all. It’s better to be aggressive than it is to be conservative. I would say for the average home improvement store – not counting big-box stores – we’re much more aggressive than most.”

That willingness to experiment spills over into the major lines the stores carry, such as pet food, treats Benjamin Moore and toys. “It’s hard to get those pet customers, but Founded in 1883, Benjamin Moore is North America’s favorite paint, color and coatings once you get them, they’re brand. A leading manufacturer of premium a regular customer for quality coatings, Benjamin Moore maintains you,” Waters says. “They a commitment to innovation and sustaincome in once a month to able manufacturing practices. Benjamin buy pet food, and most of Moore paints are available exclusively from its locally owned and operated paint and the time, they’re getting decorating retailers. other things. Our average

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customer comes in our store five or six times a year, and that’s an average when you consider all customers, including contractors that are in there every day and people that came in once from our area. Pet supplies are a traffic-maker and a decent profit for us.”

It’s a Gift Waters True Value stores carry a wide variety of gifts such as gourmet food mixes, picture frames, clocks and clothing accessories such as jewelry. “It’s a very trendy business,” Waters points out. “One thing may be really big one year and then nothing in the next year.”

The reason for the gift category in the stores is to attract the real buying power in a household: the women. “Quite a long time ago, we had decided that the big-box stores really cater to a lot more male-oriented customers, and we decided to take a different approach,” Waters explains. Waters True Value put 96

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gift departments in all stores except one so they would be more female-friendly.

“Gifts are a much more difficult business than our core plumbing, electrical and hardware, but it is definitely something that differentiates ourselves from other stores,” Waters insists.

One of the three buyers in the corporate merchandise office specializes in gifts and does all the buying for them.

“The buying is very labor-intensive for the amount of time you have to spend buying gifts, but we definitely see good profit on them,” Waters reports. “It’s high-margin, but it’s risky, and you’ve

STIHL STIHL products are sold through servicing STIHL Dealers. STIHL Dealers like Waters True Value of Kansas, people who are knowledgeable, can match customers with the right piece of equipment, and who service the equipment they sell. Congratulations Waters True Value!

got to have someone that understands the business because if you don’t, you also can tank it.”

For the past year, Waters True Value has been experimenting with selling farm and ranch supplies at its Emporia location, including products for cattle such as ear tags, vaccination needles, syringes and wormer medicine; for chicken, feed, feeders and waterers; and tractor hardware pins, welding buckets and barbed wire fence posts.

“Farm and ranch has been rough,” Waters concedes. “It’s a difficult category because the market is pretty saturated.

Our target market – as much as we want the full-scale farmer – we really cater to the hobby farmer who has a couple chickens or cattle for a 4H club. The category has been a slow start.” Before trying the category at additional stores, Waters plans to slow down the experiment and take the time to learn a brand-new category.

Rental Business Rental of party and wedding equipment, general tools and large construction equipment is a strong but difficult category for Waters True Value stores. “General tools are geared more toward homes, where large equipment is geared toward contractors,” Waters explains.

“

Waters True Value

About the time you get comfortable is the time you need to start changing again.

”

The construction equipment that some Waters True Value stores rent includes excavators, telehandlers and telescopic stick booms. “We have semi-trucks that we move them with, so we get pretty large when it comes to equipment,” Waters adds.

The party equipment Waters True Value stores rent includes large tents, tables, chairs, linens and dishes. “In party and wedding in every market, we dominate the category,” Waters maintains. The company started in the party rental business in 1993 by dabbling in rental of tables, chairs and snow cone machines.

“In 2008, we went full force in it,” Waters relates. “We can now do giant tents 60 by 200 feet. We can do dishes and

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Waters True Value linens and everything from end to end. Basically, we had a lot of competitors when we started that all dabbled in it and had a few things here and there. But the customer wants a full-service shop where they can get everything. We outdid our competitors with customer service. You can make or break a business with that. If you don’t do it right, it will sink you, and if you it right, you can do very well in it. But out of all the businesses, it’s the hardest.

“Rental is an incredibly difficult business,” Waters continues. “It’s very labor-intensive and very capital-intensive, and it’s difficult to manage, but the business is there. In comparison to running a retail store, rental is much more difficult, but for us, the good thing is we can compete with any of the bigger rental companies equally. We’re competing with bigbox stores on hardware – it’s difficult. But competing with big rental chains, we’re able to do quite well.”

The party rental business used to be seasonal but now it is year-round. “We’ve secured a lot of long-term contracts doing the same event every year for colleges and corporate events,” Waters says. “Everyone comes to us now, and all the caterers now rent all their dishes and food warmers from us.”

The stability of the party and rental business helps even out the ups and downs of the heavy equipment rental mar-

ket, which is dependent upon construction activity cycles.

“The equipment, everything is crazy expensive, but it’s up and down, and you’re directly competing with the big guys,” Waters stresses. “We focus a lot more on the smaller contractors instead of the large multimillion-dollar-job contractors, and that’s really what our competition specializes in. So we somewhat stay apart from each other.”

By comparison, general tool rentals are very stable. “It’s less of an investment, and pretty much no matter what the economy is doing, it’s stable,” Waters says.

Heavy Remodeling Waters True Value has fully gutted and remodeled six of its stores in the last six years to break out walls, build new storefronts and create new layouts, décor and shelving. In most cases, back storerooms were converted to sales floor space. “A lot of our stores were getting older and looking like old hardware stores, at least from our point of view,” Waters says. “Now everything looks very modern and very clean.”

Two years ago, the seventh store in Emporia was moved to a new location and its size doubled to 40,000 square feet. The average store size for Waters True Value is 35,000 square feet. The stores were remodeled in the new Destination True Value store format. Waters’ goal for the future is to remodel each store every 10 years.

Waters True Value stores receive shipments twice weekly from the True Value distribution center in Kansas City, Mo. Without back rooms, only small areas are behind the sales floors for receiving merchandise directly from the truck to the shelf. “We’ve really done that to make ourselves more efficient so we handle things less,” Waters says.

Waters True Value uses social media extensively and targets customers with high accuracy on Pandora and YouTube.

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“The options are dang near limitless and getting better all the time,” Waters insists. “I believe the days of Yellow Pages and newspaper advertising are about all dead.” The company also uses the True Value Rewards program.

“True Value Rewards is something we’ve had for a long time,” Waters says.

“We’ve really invested heavily and seen a return in it. True Value is very heavily investing in the program, and that’s been good for us. It really keeps people coming back.”

Waters is the sixth generation of his family to manage its retail business. The company has been family owned since 1894, but that doesn’t mean the whole family works there. “I have a brother and a sister, neither of whom are in the business,” Waters points out. “It’s just me and my dad. We’ve seen countless times that you’ve got lots of family in the business and it’s pretty much inevitable that you get in a family feud, which kills the business before the competition does.”

Waters emphasizes the importance of human relations to the stores’ success.

“We treat our employees a lot like family even though we have about 250 employees,” Waters asserts. “Making sure we’ve got good people is a huge part of our success. We invest incredibly heavily in our managers, and we treat them in

a way almost like owners. We let them have a lot of decision-making ability, but we spend tons and tons of time training them. We really work hard to make sure our managers are the best people out there and very loyal to us.”

Waters attributes the company’s high rate of retention to its good employee pay and benefits. “Several months ago, we gave out recognition pins for anniversaries and gave one of our employees a 35-year anniversary pin,” Waters says. “Twenty- and 25-year pins are very common. It’s kind of cool because I personally give those out. We give out tons and tons of five- and 10-year pins and lots of 15-year pins.”

Waters sees additional expansion, mostly in Kansas, and through acquisition. “Right now, it’s a buyer’s market,” he says. “There’s a lot of hardware stores that want to sell, which is good for us and allows us to be picky. We have countless stores call us and want to sell, and almost all of them we turn away. Either it’s not a good fit or not very profitable. We’re pretty much only interested in stores that are profitable, that fit well with our business model. On rare occasions, we may be interested in a store that is not very profitable, but we know we can turn it around. We have the knowledge and know-how to do it.” O July/August 2016

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Retail

CARTER’S SUPERMARKET

Keeping the Faith

Strong personal belief, as well as a philosophy of customer service and employee satisfaction, guides Carter’s Supermarket’s owners through competitive and other challenges. BY JIM HARRIS

The Cain family is dedicated to maintaining a positive culture and environment in its stores.

David Strange, Stan Cain and Edna Cain, co-owners www.carterssupermarket.com Walker, La.

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arter’s Supermarket’s owners know the company faces a significant challenge from big-box and other national retailers setting up shop in its home base in Livingston Parish in Louisiana. The stores’ dedication to customer service and the strong religious conviction of its owners, however, allow it to meet and rise above adversity.

“We’re successful because of our faith in Jesus and our dedication to hard work and family values,” co-owner David Strange says. “The service experience is one place where we can compete with big-

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box stores. We make sure we always give our customers a pleasant shopping experience.”

For the Walker, La.-based company, service starts the minute customers walk through the door. “We’re going back to the very basics,” says Stan Cain, Strange’s brother-in-law and company co-owner.

“During our last meeting with our store managers, we asked them to come up with a new greeting and salutation we can use with our customers. We’re trying to come up with a good, solid greeting that lets people know we care about them and how they’re feeling.”

Carter’s Supermarket The stores’ cashiers and stock clerks personally assist customers throughout their shopping trips. “If a customer looks lost or is hunting for something, our employees will ask if they need help and then walk them over and show them where the item they’re looking for is,” Strange notes. “We try to do anything we can to make the shopping experience easier for the customer.”

Carter’s Supermarket also distinguishes itself in its food offerings. The stores employ full-time butchers who provide fresh-cut meats as well as store-made sausage and stuffed roasts and chicken. A few of the company’s six stores also feature smokers, which it uses to make fully cooked meals that customers can microwave, boil or bake to warm up at home. Stores also offer four flavors of house-made marinades in oven-ready containers.

Personal Interaction The warm reception Carter’s Supermarket’s shoppers receive from employees is a reflection of the store’s positive culture and environment. “We have 350 employees, and very seldom do we hear any of them say they don’t like working for us. We have personable relationships with all of our people,” Strange says. “Many of our employees have worked with big-box stores previously, so one thing they like about working here is that they get to interact with us at a store level, which they didn’t have previously.”

The owners regularly visit stores and offer encouragement to managers and other employees. “We always ask our managers how we can make the work environment more fun for them,” Cain says. “As we walk through our stores, if we find an employee having a bad day we’re not afraid to give them a hug and tell them we’re there for them. You don’t get that at the big chains.”

Most employees seek the company out based on its reputation for treating staff well. “I don’t think we’ve gone out and tried to take an employee from another company,” Strange says. “Most of our workers get in a rut somewhere else and are tired of not being able to express themselves in their jobs or make suggestions.”

Carter’s Supermarket is assisted in its technology and marketing efforts by its wholesale supplier, Associated Groceries of Baton Rouge. “For an independent retailer, we’re doing pretty well when it comes to things like social media,” Cain adds.

Living the Golden Rule Carter’s Supermarket’s legacy of customer and employee care extends back to 1983, when Stan Cain’s parents, Edna and Carter Cain, opened its first store in 1983 in Denham Springs, La. Edna Cain, 75, continues to be involved in the business. Stan Cain’s brother, Brent, also co-owns and helps run the company.

“We’ve spent our whole lives in this parish, and feel that each store is a part of the community, which fosters loyalty from our customers,” Stan Cain says.

The company’s community involvement includes donating to the Walker Baptist Church food bank. It also is involved with Distributive Education Clubs of America programs at several local high schools, among other activities.

Carter’s Supermarket ultimately credits its longevity and continued success to one simple philosophy. “We are a Christian family business that has always operated on God’s principles and treated our customers and employees the way we’d want to be treated,” Edna Cain says. O

Recent Investments Two recent technology investments will allow employees to better serve customers. Carter’s Supermarket’s recent investments include upgrading its credit card terminals to read credit and debit cards embedded with chips.

The company also recently replaced its registers with touchscreen registers that include two screens, one on each side of the cashier. “Our cashiers can now face customers from the time they enter the line to the time they leave,” Cain says, noting that customers can view pictures of their purchases as well as prices on the screen behind the cashier.

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Retail

TOBACCO SUPERSTORE INC.

A Super Success

Tobacco Superstore has become one of the largest cigarette and tobacco retailers in the United States as it meets clients’ needs with the best prices. BY ALAN DORICH the largest cigarette and tobacco retailers in the United States. That has been achieved, Marelle says, by meeting customers’ needs with the best prices possible.

“With our volume, we try to take advantage of deals and promotions, and try to pass on as much as we possibly can to the customer,” he says, noting that the company also stays current with products.

“The technology has become very advanced with vapor/electronic cigarettes and other nicotine delivery products,” Marelle says. “So staying ahead of the curve and being able to price it correctly is our main focus.”

He also credits the company’s vendors, which include Swedish Match North America LLC. “Not only are they great people to work with, they identify niches in the market and assist in executing strategies to boost sales,” he says.

“As a result of the collaborative efforts with Swedish Match, they have assisted in helping us improve our cigar, moist snuff and snus presence,” Marelle says.

Tobacco Superstore enjoys strong sales by having what consumers want and merchandising products where they are easy to see.

T Joe Marelle, CFO and COO www.tobaccosuper.com Forrest City, Ark.

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obacco Superstore Inc. creates a friendly atmosphere in each of its locations, CFO and COO Joe Marelle says. In fact, some customers frequent its stores because they are used to its employees’ friendly faces, he says.

Those employees not only wait on the customer, but go the extra step of asking them about their day. “[That’s true] especially in our small town stores,” Marelle says. “We try to create a neighborhood atmosphere for the adult consumer.”

Based in Forrest City, Ark., Tobacco Superstore has 88 locations in four states that sell cigarettes, vapor and electronic cigarettes, premium cigars, pipe tobacco, moist snuff, food and beverages. Founder David Cohn founded the company in 1993 with a vision of opening the largest cigarette and tobacco store in the South.

Since then, Tobacco Superstore has become one of

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Back to Basics Marelle joined Tobacco Superstore in 2011 after working for Ernst & Young’s capital advisory group.

During his time at the firm, he helped sell the Cohn family’s wholesale business.

When David Cohn died in 2011, his brother, Allen Cohn, asked Marelle to join Tobacco Superstore as its CFO and COO. “I’ve been running it ever since,” he recalls, praising Cohn. “Allen’s confidence and faith in me was flattering from the beginning and has continued to help motivate me to ensure Tobacco Superstore maximizes our potential.”

Marelle helped implement changes that led to a boost in sales. “When I first started, we had to do a lot to evaluate ourselves,” he recalls, noting that the company looked at its SKUs and categories to make sure it was pricing and merchandising items correctly. “We got back to the basics and we looked at where we should be doing better.”

One example, he notes, was moist snuff products, which were experiencing a decline in sales. “Since then, we’ve done a fine job [selling them],” he says,

noting that the company enjoyed double-digit growth in his first few years and has experienced solid growth annually ever since.

“A lot of it involves having what the customers want, having it merchandised where it’s easy to see and beating competitors on price,” he says. “Those have really contributed to our increase in moist snuff.”

The company also focused on pipe and roll-your-own tobacco, which led to the formation of Ignite, its own private label brand. “We’ve put a lot of effort into that,” he says, noting that Ignite leads its category in the stores.

Tobacco Superstore continuously invests in technology, including the recent creation of its sales database. “We can look at what every store is selling by line item in terms of quantities and dollars,” Marelle says.

With this data, the company can find areas where its stores can improve in terms of managing inventory, internal controls and identifying errors. “Those are always things you’ve got to keep an eye on,” he admits. “It’s allowed us to enforce and monitor those controls.

Two of our IT personnel, Gary Whitlock and Taylor Stewart, have worked well in helping us.”

Tobacco Superstore has created a culture where employees help it grow.

When it implemented controls to analyze its business, “Our employees not only helped enhance our ability to get

Core-Mark Core-Mark is one of the largest marketers of fresh and broad-line supply solutions to the convenience retail industry in North America. Founded in 1888, Core-Mark offers a full range of products, marketing programs and technology solutions to over 38,000 customer locations in the U.S. and Canada through 28 distribution centers. Core-Mark services traditional convenience retailers, grocers, drug, liquor and specialty stores, and other stores that carry convenience products. For more information, please visit www.core-mark.com.

information, but also the way [we] look at it,” he says.

Those team members include Account Receivable Supervisor and Office Manager Melissa Douglas. While she required some training early on, “We’re at a point now where she can pretty much create a lot of reports [from] data and analyze it,” he says. Marelle also praises her accounting skills. “There’s a lot of money tied up in receivables,” he adds. “She does a great job of making sure we maximize and collect on those funds. She has been invaluable to our success.”

He also praises Human Relations Manager Tracy Webster, who helped the company adjust to the Affordable Health Care Act. “In the retail industry, [it has] created a lot of challenges,” he says. Webster ensured “that we got a policy that met all of the standards,” Marelle says. “[We’re] monitoring our employee hours to make sure that we’re within all the guidelines and doing the best that we can.”

Lean Growth Tobacco Superstore plans for expansion, but “we want to be lean with growth,” Marelle asserts. “If I had a choice to open two great stores as opposed to five average ones, we’d go with the two great ones.”

The company also is open to reinventing itself. For example, if customers start to choose vapor products over regular cigarettes, “We’re going to focus on doing that,” he says.

“There’s other product expansion opportunities that we’re definitely going to look at,” he says, noting that Tobacco Superstore is considering following in the footsteps of its convenience store competitors and possibly experimenting with items such as hot food.

“I see us doing that in some of our stores in the future and growing in that category,” he says. “All of those things are going to play a huge factor in our long-term growth.” O July/August 2016

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Retail Great American Home Store is dedicated to giving customers a broad selection at the best value.

THE GREAT AMERICAN HOME STORE

Above and Beyond

Great American Home Store goes to great lengths to ensure its customers are happy, including going beyond manufacturers’ warranties. BY JIM HARRIS

T Ron Becker, general manager www.greatamerican homestore.com Southaven, Miss.

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he Great American Home Store is dedicated to making its customers happy – even if it means losing a little bit of profit. “We take care of our customers one by one, and will live up to all of their expectations individually and take care of them fairly and correctly, even if that means taking it on the chin from time to time,” General Manager Ron Becker says.

One example Becker gives of Great American Home Store’s willingness to please a customer at its own expense is a delivery it made of a set of furniture that accidentally left one accent piece on a delivery dock. The customer wanted the $800 piece delivered later the same day as the rest of the set, but the driv-

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er noted the warehouse was too far away and the next delivery run in the customer’s region was three days later.

Customer service representatives initially offered the customer a discount on the item, which could be brought from the warehouse to the company’s Memphis store later that day. “The customer said that if he was going to drive to Memphis to pick up the piece, that he should get it for free,” Becker says.

“That meant taking a $800 loss, but if that’s what was going to make him happy, that’s what we had to do.

“We feel that if you’re reasonable, or even if you just think you’re being reasonable, we’re going to ultimately work with you and give you what you

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want,” he adds. “We feel that’s going above and beyond the call of duty in customer service.”

The company also offers warranty service for longer durations than the manufacturer’s warranty, as well as a 72-hour “happiness guarantee” that offers full refunds on products returned during that timespan. “We feel that, when all things are equal and there is just cause for going above a manufacturer’s warranty, we will err on your side, not ours,” Becker says. “We feel that all transactions should be hassle-free.”

High Standards Founded in 2004, Great American Home Store today operates six locations in Mississippi and Tennessee.

They include two 60,000-square-foot showrooms with a full selection of furniture, two sleep shops offering bedding and two outlet locations.

All of the store’s locations are staffed by friendly, knowledgeable staff who believe strongly in the company’s credo of going out of their way for customers. “Our standards are extremely high,” Becker says. “Every manager and every employee who works with us knows what our standards are and is willing to commit and perform to those.”

All employees are trained extensively on the company’s policies, and managers are promoted from within its ranks.

Management, including Becker and other senior staff members, maintain a regular presence in the company’s stores and showrooms. “We are very visible, and have an open-door policy,” Becker says. “We share a lot of information with our people because they are a key part of our ability to live up to the high standards we have set for the company.”

Great American Home Store carries products from multiple manufacturers including international brands. “We’re not a single-source supplier – we carry most of the lines that are out there, and, at high points, shop from 80 to 90 vendors,” Becker says, noting the company current-

We feel that when all things are equal, we will err on your side, not ours.

”

ly works with 60 vendors. “We give our customers a broad selection at the best value; our customers are very pleased with what they see in our showrooms.”

An Evolving Approach

The company regularly invests in technology and marketing efforts. In March, Great American Home Store added an e-commerce system, giving it the capability of receiving and fulfilling online orders. Although online orders are presently limited to a 200-mile radius of Memphis, the company intends to eventually offer cross-country shipping. “We believe that if you’re going to be successful, you have to be able to perform online,” Becker says.

Great American Home Store is also enhancing its website by adding product demonstration videos it produces in-house. Other recent technology investments include adding the Trax retail management system and an automated inventory replenishment system.

The company’s marketing strategy includes television and radio advertisements as well as an extensive social media strategy. The company also plans to soon implement a customer loyalty program.

“Our approach is evolving every day,” Director of Marketing Jack Wells says, noting the company uses targeted online advertising to attract new shoppers.

“We’re taking advantage of everything that’s out there when it comes to online marketing.” O

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Retail

KENYAN ENTERPRISES INC.

Small-Town Feel

Kenyan Enterprises, operator of 17 Piggly Wiggly and Save-A-Lot locations, is upgrading and remodeling the stores to drive more customers inside. BY STEPHANIE CRETS

Kenyan Enterprises strives to remain competitive by maintaining “A-plus store conditions,” according to Vice President of Operations Bobby Vidrine.

K Bobby Vidrine, vice president of operations Springhill, La. 106

enyan Enterprises Vice President of Operations Bobby Vidrine describes the company’s 17 stores as “very small-town America and old fashioned.” The company owns four Piggy Wiggly locations and 13 Save-ALot locations in small towns across Louisiana, Arkansas, Oklahoma and Texas.

For Vidrine, small-town America means a family oriented company with extremely friendly employees. Vidrine would know best, as he began his

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career sacking groceries at a Piggy Wiggly when he was 16, working his way up through the ranks over the course of 22 years to his current position with the overarching company. “I would put our stores against any as far as being friendly,” he says.

In addition, Kenyan Enterprises prefers conducting business in its stores the old-fashioned way, especially in terms of its meat selection, boasting a fresh, clean and well-merchandised meat department. “In our market, we haven’t gone the way of pre-packed

meat,” Vidrine explains. “We’re still doing things the old way – we hand-pack chicken, cut things fresh every day and hold a higher standard, so the meat still looks good when the customer gets it home.

“People want to see that market manager there, they want to know everything is fresh,” he continues. “It’s a bit of an expensive chore, but it’s worth it in the end. You’ll keep loyalty in your store by running a fresh meat department.”

On Track Kenyan Enterprises is satisfied with its current store assemblage but is always keeping an eye out for future expansions.

“There are always plans, but we’ve got to find the right place at the right time and for it to be the right opportunity,” Vidrine notes.

Therefore, the company continues its focus on its existing stores, remodeling them and updating them to become more energy efficient. “In the last 10 years, we’ve remodeled almost every store and we’re on a steady track to continue to remodel,” Vidrine says. “You’ve got to stay new and fresh.

If you get old and tired, customers will go somewhere else.

So, we’ve spent time upgrading the outside and inside with paint and retrofitting cases with new skins because we’ve got to keep moving forward.”

Several stores already have been redone with LED lights inside and out, while Kenyan Enterprises is actively installing them through the rest of the stores over the next six months. Other additions include converting the refrigeration racks to electronic valves and retrofitting the open dairy cases with doors to reduce the energy output.

“We’re steadily moving forward in terms of energy efficiency,” Vidrine says. “It’s just a matter of pushing forward and staying on that track. LEDs have been a big hit. It’s also a matter of survival. As the regulatory costs continue to go up, it’s getting more expensive to operate a business. So we’re cutting costs where we can. Energy efficiency is a little expensive on the front but it pays for itself in the long run.”

Kenyan Enterprises has to stay competitive in the ever-growing grocery marketplace and reduce overall costs where it can. Vidrine notes big-box supercenters have become even more aggressive with their pricing and neighborhood markets are popping up everywhere, creating disjointed loyalty among customers.

“Everyone’s selling groceries, even Dollar General,” he adds. “Everyone wants a piece of the pie. But we try to be better than most by maintaining A-plus store conditions and staying competitive on pricing. Supercenter pricing makes it tough, but we try to run our operation well.”

The company tries to generate excitement to bring in more customers through special promotions, giveaways and revamping the stores inside and out. “You’ve got to give

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Kenyan Enterprises Inc.

If people are happy to be here and appreciated at work, they tend to be friendlier to our customers.

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something to the customers so that, when they drive by, they want to stop,” Vidrine adds.

Once the customers come in, Vidrine is confident they’ll return time and again thanks to the dedication and enthusiasm of Kenyan Enterprises’ employees.

“I’m most proud of our people who try to drive that customer in and how our supervisors are very involved with the employees,” he says. “If people are happy to be here and appreciated at work, they tend to be friendlier to our customers. A smile generates a smile. They’re happy to take care of our people.” O

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Retail

TOMMIE COPPER

Wearable Wellness The Tommie Copper brand of compression garments is creating a new category for pain relief and wellness between medical and athletic products.

S Sol Jacobs, CEO www.tommiecopper.com Mount Kisco, N.Y.

ol Jacobs, CEO of Tommie Copper, tells the amazing story of how the company was born. “After a near fatal waterskiing accident, athlete and entrepreneur Thomas Kallish could not find the relief and recovery products he needed,” Jacobs relates. “The former fabric guru began designing comfortable compression sleeves for himself with copper and zinc infused into the fabric. To his own surprise, the sleeves were

The company explains its Wearable Wellness products have an exclusive 4-D multidirectional weave.

so comfortable, he could wear them all day, every day. He knew he was onto something. With further R&D, in 2010 Tommie Copper was born.

“Our company goal is simple – to help people live comfortable, healthy, happy lives,” Jacobs explains. “We call it Wearable Wellness. Most compression is known to be uncomfortable and only for specific needs: athletic injuries or for medical purposes. The difference with Tommie Copper products is that our comfortable compression apparel, sleeves, socks and orthotics are designed for everyday wear, providing muscle recovery, support and helping reduce pain and swelling.”

Jacobs defines Wearable Wellness as “dressing well and being supported by our comfortable compression, so you can feel good, all day, every day. We believe in wearable wellness and engineer our products with our exclusive 4-D multidirectional weave, patent-pending Copper Znergy technology eliminating odor-causing microbes on the fabric, and UPF 50+ providing protection from the sun’s harmful rays.”

Don’t be confused though – although Tommie Copper products can and should be used before, during and after activity, it is not an athletic or a fashion company. Tommie Copper is a product solution brand that focuses on wellness by providing support, recovery and relief to each individual wearer.

“The application process of Copper Znergy is proprietary to us, as well,” Jacobs continues. “Unlike other brands that claim copper use, our fabric is 100-percent infused with our technology, which cannot be washed out and lasts through the life of the garment.”

New Products In the past year, Tommie Copper has launched a new category of comfortable compression socks including athletic, micromodal and wool. “Our well-styled socks are perfect for everyday wear for work, leisure or play,” Jacobs maintains. “Our over-the-calf styles are especially good for travel. A vast majority of people have never worn compression socks because they think they’re uncomfortable or that they simply do 108

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Tommie Copper

Our product provides an emotional journey.

We’re making people feel better. Our social proof is undeniable.

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not have a reason to. We have redefined the category with our comfortable compression socks.”

In the latter part of the year, Tommie Copper will launch copper-and-zinc-infused natural fiber compression garments that are ultra-comfortable with a luxurious hand.

“We’re great believers in the natural fabric category,” Jacobs points out. “We have dedicated a great deal of time and development for this exciting innovation. The company is very proud of the new product line, which will change the market space once again.”

Online Sales

“Many employees on the floor personally wear Tommie Copper and speak from personal experience to the benefits of the product,” Jacobs insists. “Our product provides an emotional journey. We’re making people feel better. Our social proof is undeniable, with positive customer reviews flooding in daily. In an age where social proof really matters, our consumers have great experiences with our products and are passionate about telling others. Making that one-to-one connection is very important to the future of our company and the route we choose to get there.” O

Tommie Copper is an ecommerce-based company, with 80 percent of the product sold directly on the company’s website. “A direct customer relationship is critically important,” Jacobs emphasizes. “Consumers are changing today. Understanding our customers, knowing who they are and how they react is crucial, not only to our current business but to the future of our business.”

Jacobs thinks the next step for Tommie Copper is to partner with other retailers for enhanced marketshare and credibility. Currently, 20 percent of sales are consummated through select retail partners.

“We’re exploring all options,” Jacobs says. “We have a store in our corporate office in Mount Kisco, N.Y. It’s 400 square feet and performs very well for us, considering our location.

Customers travel to come and see and feel the product. We are a destination for some of our customers.”

In 2016, Tommie Copper will enhance its already robust television advertising with a variety of radio, digital and social campaigns. “We are excited to unveil our newest brand ambassador relationships in the third and fourth quarter of this year,” Jacobs says.

In wholesale partners’ stores where Tommie Copper products are being sold, the company provides in-store training as well as training manuals for sales staff due to the specialized nature of the company’s products. Tommie Copper also relies on the personal experiences of the salespeople through interaction with its products.

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Retail The owners use that first-hand experience to benefit one another. America’s Food Basket holds a meeting among its 22 owners each Tuesday to share knowledge, discuss challenges and develop resolutions. The meetings are an opportunity for owners to identify challenges, react to the market and address their individual needs without needing to navigate layers of corporate management. “Because we’re so small we have the ability to turn the ship on a dime,” Cabassa says.

One such problem that recently emerged was the need for better employee training. At the direction of the owners, Cabassa and his team looked at key areas to address – from the cashiers to meat cutting and customer service – and then explored the training programs available on the market. The leadership team then came back to the storeowners with a recommendation to use computer-based training provided by N.G.A. “This was the result of a lot of discussions of training needs in the stores and how do we best implement it,” Cabassa adds.

Making the Transition The America’s Food Basket co-op has 22 members who have the autonomy to meet the particular needs of their local consumers.

AMERICA’S FOOD BASKET

Fresh Perspective America’s Food Basket is growing on the foundation CEO Dan Cabassa laid for the company in 2012. BY TIM O’CONNOR

T Dan Cabassa, CEO www.afbasket.com Lake Success, N.Y. 110

he competitive advantage of America’s Food Basket is that, while unified, the supermarket co-op is owned and operated by its members, CEO Dan Cabassa explains.

This allows the storeowners to receive the support of the larger brand but still run their stores as they see fit. It demands a hands-on approach to be successful.

“Our owners are in their stores every single day so they keep their pulse on their business,” he says.

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America’s Food Basket was not always so efficient.

When the co-op concept that became America’s Food Basket was first developed in 2005 it lacked a strong vision. At the time, a group of independent supermarket operators came together and collectively decided to form their own co-cop.

In 2007, the owners formed America’s Food Basket’s predecessor, the Neighborhood Supermarket Association (NSA). During the early years, the stores came together under the NSA brand but struggled to get the association going. Turnover was frequent as NSA went through a process of adding and losing stores, never quite holding onto the consistency it needed to establish the brand.

By 2012, NSA had 26 member stores. The remaining owners realized the co-op needed professional leadership if it was going to thrive. Cabassa was a solid candidate to become that leader. He had a degree in finance, accounting and business administration, was a certified industrial engineer and had a grocery retail background with companies such as the Great Atlantic & Pacific Tea Co. (A&P), Meijer, Pathmark and Wakefern Shoprite.

Cabassa joined the company that year and immediately began building an environment that was a true corporate enterprise. Within a month he reformed NSA into a new corporation, America’s Food Basket, and renegotiated the organization’s existing contracts to get better terms for its members.

America’s Food Basket From 26 stores and $236 million in revenue in 2012, America’s Food Basket has grown to 47 stores and $532 million in revenue by mid-2016. Cabassa projects the organization will reach 60 stores by the end of the year, 75 by the end of 2017, and 100 stores and $1 billion in sales by the end of 2020.

The co-op now has 22 members with locations ranging in size from 4,000 square feet to 28,000 square feet. Member stores under the America’s Food Basket, Ideal Food and Super Fi Emporium banners can be found in New York, Connecticut, Massachusetts and Rhode Island, with the first New Jersey location set to open this fall. A single NSA store remains in Florida but will be rebranded later this year.

“Our plan is close the gap from New York all the way up to Massachusetts,” Cabassa explains.

Cabassa credits the company’s renewed focus with turning America’s Food Basket from a struggling co-op into a thriving grocery organization. “The experience and focus is what [America’s Food Basket] needed,” he says. “Once you take an organization that’s just beginning its infant stage and you put leadership behind it with experience it all come together.”

Some of that newfound focus comes from the team of business-minded college graduates Cabassa assembled to lead the organization. Those talented individuals were able

to apply business best practices into the co-op. Cabassa calls his staff his “students” and works to coach and mentor them on the industry. “The years of experience I have instilled in them, [combined] with the fortitude they have drives performance,” he says of his team.

Reinforcing Structure The co-op still relies on its owners to know the needs of their own consumers, but the firmer structure Cabassa put in place helps those stores better understand what those needs are. Two years ago, America’s Food Basket began installing LOC Store Management Suite (SMS) systems in its stores. The software Porky Products tracks purchases to give Incorporated in 1961, Porky Products is a greater insights into con- second generation family owned business. sumer behavior, allowing The current owners have over 140 years of the co-op to better ad- experience between them. Porky’s primary business is distributing meats, seafood and dress the product needs provisions to independent retailers with the of each store on an indi- mission to provide excellent service, supply vidual basis. More than and help customers become more profitable. half of the chain’s stores Porky Products is a proud Supplier to America’s are now using LOC SMS Food Basket.

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America’s Food Basket and the organization expects to have it fully implemented by the end of next year.

America’s Food Basket has also signed agreements with analytics firms Nielsen and IRi to capture its performance at its markets. The data derived from those analyses allows the co-op to build partnerships with new suppliers and will shape the next wholesaler agreement, which America’s Food Basket expects to finalize this fall. The company’s improved buying power means it expects to set terms with wholesalers that will result in better access to products and lower costs.

Better access to products will give America’s Food Basket supermarkets the item mix they need to compete with larger chains. But the company is also updating the technology inside its locations. The co-op is implementing green equipment and systems wherever possible, such as energy-efficient refrigerated cases, and is going paperless with low-energy solid state-drive laptops.

“We continue to look at where we can invest to modernize these stores,” Cabassa says.

Capital improvements have moved at a rapid pace in the last three years as America’s Food Basket keeps pace with the rest of the grocery industry. Many competitors have left the market and more consumers are turning to inde-

pendent grocers for shopping, Cabassa explains. America’s Food Basket needs to give those new consumers a pleasant shopping environment.

Much of that can be attributed to the appearance of the stores, but equally as important are the underlying systems that lead to a hassle-free shopping experience. The co-op recently invested nearly $2 million in a new IT infrastructure for its member stores and the corporate office.

Expanding Footprint America’s Food Basket grows its membership in three ways.

Oftentimes, existing members canvass their markets to identify existing stores or sites where a new store can be built. New members might also come from cold calling grocers in the area that are a possible fit for the co-op. Finally, America’s Food Basket has grown its reputation to the point where independent store owners are calling the company about joining.

When considering an addition, the company looks at the vitals: area demographics and the cost to operate the prospective store. New owners who want to join America’s Food Basket must first be interviewed and approved by the co-op’s board of directors.

As it grows, America’s Food Basket will remain a independent owner-driven company, but Cabassa believes there is room to expand its operations. The company is looking to open its first corporate store by the end of 2017, with an eye on more corporate-run locations in the future.

Cabassa believes corporate-owned stores won’t complete with member stores but will rather allow the organization to feed its own expansion. “It furthers the commitment to each member that they will stay unified and the co-op will continue to grow,” he says. O 112

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Supplier

“We participate in a lot of different ways to ensure we have all of the consumers’ shopping desires covered.” – Gary Reach

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Supplier

MEGA GROUP USA

Remaining Competitive MEGA Group USA helps retailers buy better, increase traffic and strengthen profits through its membership services. BY STEPHANIE CRETS

As competition continues to grow, MEGA Group works to ensure its members take advantage of every resource that is available to them.

S Missy Hodges, vice president of appliances www.megagroupusa.com Germantown, Tenn.

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ometimes retailers need an extra bit of help to succeed in today’s competitive marketplace. That’s where MEGA Group USA comes in, helping retailers buy better, increase traffic and strengthen their profitability through services like merchandising, advertising, retail financing, training and product protection. The group has 1,800 members with more than 3,000 storefronts and about 250 vendors among which its members can purchase. It serves the appliance, electronics, furniture, mattress and outdoor product industries.

Most of its members are mom-and-pop stores in secondary and tertiary markets, operating in smaller towns. “Our members need to be able to buy, advertise and look just like a big-box retailer without having the footprint of a big-box store,” says Mis-

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sy Hodges, vice president of appliances at MEGA Group. “We’re making sure that members are taking advantage of everything out there as the competition continues to grow. Most of our storeowners have been in the business for many years, starting at the bottom and working their way up. We encourage our dealers to continue to educate themselves and stay savvy in their business.”

One of the ways MEGA Group helps its members stay competitive is through its website development. It has four different levels of websites, depending on how much a member wants to spend, but all levels include some type of digital marketing services. Hodges says a website is a retailer’s greatest equalizer and asset. More than 80 percent of consumers do their preliminary research online before

purchasing a product in high-price categories like appliances and electronics.

“Our members need a website that is equal to or better than their competition,” Hodges explains. “We make sure they can tell their story. Our members need to continue to innovate to stay competitive and pass their competition.

The appliance world has changed, it isn’t all about the buy anymore; it’s about everything else that goes along with it.

Change is important and has to be part of their daily life.”

Staying Connected MEGA Group prides itself on staying engaged with its members and vendors and having a personal touch with each one. “We work closely with our vendors to develop programming that can help our members,” Hodges says. “The vendor produces the product and sells it to the member, but our job is to draw customers into the member’s store, giving them the opportunity to make the sale.”

The organization hosts an exclusive national convention twice a year for their members. MEGA Group hosted its latest convention in March in Orlando, and the fall MEGA National Convention is coming up Aug. 21-24 in Nashville.

The conventions are not just an opportunity for members to take advantage of special buys directly from vendors.

This is an opportunity for vendor product training, keynote speeches and educational sessions. In addition, Hodges spearheads a preview event at the show called MEGA Madness, which is a 90-minute buying frenzy for members to purchase exclusive or limited supply items from vendors.

“Not a day goes by that I’m not on the phone or meeting with my vendors and members,” Hodges says. “Innovation continues to be a big part of the major appliance industry.

It is very important to stay connected to the vendor community so we can better understand the brand and category strategies. This knowledge can help us make smart merchandising decisions. These decisions help our members become more profitable and successful. We can develop a great strategy but we need to make sure our members embrace it.”

Thanks to MEGA Group’s personal touch, the organization had its best first quarter ever in upping membership numbers. Additionally, the organization continues to grow its sales force. Five years ago, MEGA Group had little to no representation in the western half of the United States, but it has grown dramatically and increased membership and vendor relationships in the West.

Along with that, MEGA Group also ensures it finds the right vendors for its members as it continues to add and improve on its services. “We continue to expand our digital marketing offers – that is the future – while keeping our personal touch,” Hodges adds.

She attributes the organizational growth to how connect-

MEGA Group USA

“

Not a day goes by that I’m not on the phone or meeting with my vendors and members.

”

ed every department in MEGA Group is. Although Hodges is focused on appliances and outdoor products, she still knows what’s happening in the furniture and mattress sector.

“I don’t build a silo,” Hodges says. “We need to understand that we’re working together as a team. We stay focused and make sure we are all pulling the horse in the same direction.”

Although it was once known to be a group for smaller retailers, MEGA Group now serves a variety of different-sized retailers, but maintaining focus on the mom-and-pop stores.

“I’m proud of the positive growth we’ve had over the past five years,” Hodges says. “We have developed programming and merchandising that can accommodate all size dealers. That’s been one of our biggest challenges and we’ve nailed it.” O

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Sweet Dreams

Innocor is using its supplier relationships and customer knowledge to drive innovation in the flexible foam mattress market. BY TIM O’CONNOR

Innovation and new products allow Innocor to remain a leader in the flexible foam market.

Carol Eicher, president and CEO www.innocorinc.com West Long Branch, N.J.

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here are a lot of ways to measure a successful merger. Some might look at revenue while others put a priority on marketshare.

At Innocor Inc., the company thinks about its formation from the merger of two smaller flexible foam manufacturers in terms of its internal operation as well as the external.

One of the biggest testaments to that successful transition is that employees no longer refer to the legacy companies from which Innocor was born, according to President and CEO Carol Eicher. When the merger occurred in 2014, the new company wanted to be seen as the combination of two great companies – Sleep Innovations and Flexible Foam Products – and leadership believed a new name would reinforce that idea both with customers and employees.

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“We didn’t want either one of our employee groups to feel one had acquired the other,” Eicher explains.

The merger came about after private equity firm Sun Capital acquired both Sleep Innovations and Flexible Foam Products. The foam market is an attractive space with strong growth opportunity and Sun Capital realized combining the two foam manufacturers would create a larger infrastructure with more resources to drive innovation and sales. The foam market had already seen extensive restructuring in recent years. Mattress companies Serta and Simmons have had a common ownership since 2009, Tempur-Pedic and Sealy Corp. merged to form Tempur Sealy in 2013, and retailer Mattress Firm completed a takeover of competitor Sleepy’s earlier this year.

Innocor Inc. Eicher joined Innocor in May 2014 shortly after the merger began. Since that time, she says the newly combined company has exceeded its promise and become one of the largest foam manufacturers in the United States and one of the biggest players in the foam mattress market. “We’ve actually been able to drive the core messaging of our company, which is our size and our national ability to serve our customers, with the ability to bring innovation to multiple nodes in the value chain,” Eicher explains.

Innocor’s operations are split between two divisions. Innocor Comfort is the bedding products arm of the company that retains the Sleep Innovations brand and provides products for retailers. Innocor Foam Technologies is a purveyor of foam materials for OEMs that create bedding and furniture among other applications. Eicher says that having a sizable presence in both the B2B and B2C markets supports Innocor’s strategy around innovation and go-to market.

The company has 23 manufacturing and disDow tribution facilities in the United States and Dow is proud to have the continued opportuniis vertically integrated. ty to collaborate and innovate with one of our key partners, Innocor. As a leader in polyureThat network of facilithane research, manufacturing and sales, Dow ties is positioned across is focused on delivering innovations that have the country so that Ina significant, positive impact on society and nocor can be close to its in markets where our customers will benefit customers, helping it to most. This requires a unique collaboration in which we explore, listen and invest in the most grow as the demand for promising solutions with key stakeholders foam rises. across the value chain and around the world.

Eicher says a signifiDow is committed to investing in opportunities cant amount of Innocor’s where our science is the difference-maker growth can be attributed that enables products to perform better, more comfortably, longer, smarter, safer, and to bringing new prodmore efficiently – in their production, in their ucts to retailers and the application and in their use over time. company’s proximity to customers. “This is a manufacturing company Covestro and our ability to meet Covestro is a global leader in high-tech polyour customers’ needs and mers and creative solutions that positively to do that better than impact people’s lives every day. We push the anybody else is clearly a boundaries of what is possible in the autodifferentiator for us,” she motive, building & construction, furniture & bedding, electronics, medical, and many explains. other industries.

As a manufacturing Our global presence gives us a first-hand company, Innocor strives view of the world and the challenges facing to stay ahead of the latest it. Covestro creates sustainable solutions to production trends. When address climate change, resource scarcity and urbanization. Our products insulate Sun Capital created the buildings, make cars more efficient, and company, the new leadhelp protect food and water supplies. And ership, including Eicher, that’s just a sampling. developed Innocor’s own 118

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version of a continuous improvement mindset based on Six Sigma principles. From those standard procedures, Eicher says Innocor created a common platform for operating excellence to ensure consistency and quality. All of the company’s facilities are now in various stages of implementing continuous improvement programs.

Leading on Innovation Innovation and new products are how Innocor remains a leader in the flexible foam market. One of the driving forces of that innovation is the company’s relationship with its suppliers. Many of the chemical companies Innocor buys from are billion-dollar businesses with countless customers. Despite that volume, the size of Innocor’s market means the foam producer is often among the largest customers for those suppliers.

Chemical manufacturers tend to be much larger than Innocor and have to develop products that fit a wide range of industries and applications. That requires large investments in innovation and capabilities.

Innocor’s customers rely on the company to deliver innovative products. Because of the close ties Innocor has developed with its suppliers, the company can leverage the vast innovation engines of those chemical manufacturers to develop products that are unique to itself. Further, Innocor has extensive market research it can use to help direct the fundamental material science used to make foam products, allowing it to solve consumer problems and fulfill demand.

Innocor Inc. Eicher says that development process enables the company to bring products to market that distinguish Innocor from competitors.

Those supplier relationships result in technologies that make sleep more comfortable or better fit the requirements of furniture manufacturers. Innocor recently introduced several new specialty foam products that live up to its promise of innovation. HYPERcor High Resilience Foam is designed to enable unparalleled support, durability and malleability and LURAcor Latex Alternative Foam delivers buoyant, responsive comfort with excellent pressure point relief.

One of the company’s most exciting new products is EVENcor Memory Foam. Traditional memory foams can stiffen and lose comfort as the temperature and humidity change. EVENcor solves that problem so that users will enjoy the same softness in winter as they do in summer. “The idea is for the consumer experience to be the same over a broader range of atmospheric conditions,” Eicher says.

Gary Reach, vice president of marketing, says the need for a product like EVENcor arose from Innocor’s Consumer Insights research. The company surveyed hundreds of consumers and found that more than half noticed a difference in their memory foam mattresses based on the temperature. Of those, about two-thirds had a negative reaction. They called the vendor, manufacturer or retailer to complain, return the product or said they would not buy a memory foam mattress in the future. “That was a big problem in the marketplace,” Reach says. “We’re proud to say we’ve found a solution to it.”

Innocor strives to innovate at three different levels within its products: foam, covers and packaging. The foam is the basic raw material the company uses. Reach says the company spends a lot of time and effort working with all vendors to ensure it has the most cutting-edge foams, covers and packaging.

Covers include those for the pillows, mattresses and mattress toppers the company manufactures. When it comes to covers, Innocor works to advance the functional capabilities, aesthetic qualities and feel. Innovation within packaging often depends on the distribution or retail channel.

Channel Surfing The flexible nature of foam also opened up a new distribution model to fit the shopping habits of modern consumers.

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sumer sales through the Sleep Innovations website. Reach says although consumers are becoming more willing to buy something online, retail still plays an important role in the shopping experience. Sixty-five percent of customers still rely on retailers as the primary source of information, and of that group, 90 percent use their phone to comparison shop while in the store.

Innocor tailors its distribution channels to fit those varying shopping methods. “We participate in a lot of different ways to ensure we have all of the consumers’ shopping desires covered,” Reach explains. “Part of our goal is to make sure we’re focused on the areas of the market, the paths of purchase and the channels that are growing the most.”

Innocor’s success in supporting retailers while providing the shopping channels customers want is driven by its internal research and understanding of the mattress market.

Eicher describes Innocor as a company with a culture of accountability with clear goals and objectives. “We make decisions based on data, not on whims or who screams the loudest in the room,” she explains.

Eicher says there are always thousands of great ideas floating around at Innocor, but success comes down to execution, not brilliance. Achieving those goals requires a laser focus on what needs to be done and Innocor gives employees the freedom they need to complete their jobs.

Following the merger, the company brought in new leaders, such as Eicher, who had experience managing large and complex businesses. Innocor also promoted from within to create a mix of efficient and experienced management. “It’s made for a really strong team of individuals who have seen success elsewhere, who understand the industry and are highly motivated to make the company a success,” Eicher says. O

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SOLUTION PROVIDER IBM

Finding the Solution IBM offers streamlined solutions personalized to help retailers transform their businesses and deliver superior shopping experiences. BY STEPHANIE CRETS

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BM is making the lives of retailers and shoppers easier with solutions that address critical business needs. Vice PresiVish Ganapathy, vice dent and CTO Vish president and CTO Ganapathy describes www.ibm.com Armonk, N.Y. the retail solutions as a “streamlining imperative” in three areas.

First, retailers can deliver superior shopping experiences by understanding, connecting and engaging with their customers to provide timely, relevant and personalized messages and offers.

Second, retailers can build an efficient merchandising and supply chain system that allows them to anticipate and meet the needs of customers. Lastly, retailers can transform and optimize their operations – from administration and human resources to IT and business management – to improve performance and efficiency.

“Our software-based solutions are the biggest value,” Ganapathy explains. “We provide a single digital engine for commerce, marketing and order management and help retailers integrate large merchandising and supply chain systems.

In addition to these highly intelligent solutions, we have predictive analytics and price optimization. This makes retail operations more efficient and allows retailers to make more informed decisions.

We have a wide variety of solutions for each of our three imperatives.”

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different from other software-based companies. For example, IBM worked with a large department store retailer to create a buy-online/pick-up-in-store platform a couple years ago. The company wanted to leverage the store as an extension of its supply chain. IBM took the company’s management platform and built a self-optimizing algorithm to be implemented onto its predictive analytics engine.

The overall goal for this customer was reducing costs to serve and optimize labor while also differentiating how to move inventory from less profitable stores to fulfill customer orders in more profitable areas. The solution also took various constraints into account, such as how much inventory is available and the price of the products. IBM looked at the constraints, including the cost to ship to customers and when they need it by, and created the right predictive analytics solution to meet the retailer’s business and service goals.

“We’re not trying to do everything for everybody; we’re trying to take specific

July/August 2016

problems experienced by clients and provide them with tailored solutions,” Ganapathy says. “Every solution has a significant portion of analytics embedded in it to solve the clients’ specific problems. Our job is figuring out the right offers for customers so retailers and customers can have a better experience.”

Opportunities Await Because every retailer is uniquely different, IBM addresses needs individually and recommends the best options. IBM’s solutions provide full function and are easily extensible, creating a great opportunity for both IBM and its customers.

“Our challenge is: How do we increase the value of implementing something for a customer?” Ganapathy says.

“From a customer perspective, retailers don’t spend a lot of money on IT. Most of the money is used in retailing for status quo to keep the lights on. So how do we provide innovations that allow them to do more with less? We’re creating outcome-based solutions allowing

SOLUTION PROVIDER retailers to reap benefits without much of the upfront investment.”

IBM tackles many of these challenges by working closely with partners and integrating their systems with its own.

This customized innovation roadmap allows for highly differentiated capabilities and makes all the solutions more sophisticated. “We are not trying to be wall-to-wall one thing; we are trying to be precise and offer personalized solutions,” Ganapathy adds. “We are building better, more relevant solutions since it is a combination of our software, our partners’ software and services, all supported by a layer of analytics.”

Now, with so much innovation happening for IBM, the company is doubling down on its industry solutions strategies to become a cognitive cloud company. This means implementing more sophisticated analytics and machine learning through cloud-based networks. “Our focus continues to go by industry, and we are seeing a tremendous amount of synergy across industries,” Ganapathy notes.

Ganapathy sees the future of retail changing tremendously, even in the next few years. He says virtual and augmented reality will become a mainstream method to conduct online shopping. In addition, he sees lines blurring between retailers and people in the business of retailing. For example, companies like Apple are in the business of retailing to improve the customer experience and make products more user friendly, which has been vastly successful.

“We at IBM are excited about the level of growth in intelligence that systems incorporate to make them smarter and better,” Ganapathy says.

“Touch points are growing exponentially, as well. There is a lot to get excited about. The future of retailing is going to change tremendously, and I think retailers will be forced to adapt. If they can’t differentiate themselves, they’ll lag behind so they need to innovate and leap forward.” O

IBM is focused on offering precise, personalized solutions to its clients. It wants to become a cognitive cloud company by implementing more sophisticated analytics and machine learning.

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SOLUTION PROVIDER LINEAR RETAIL PROPERTIES LLC

Inertia Defiance Linear Retail Properties has accelerated its growth over the past year with the acquisition of a dozen new retail properties that total more than $100 million.

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ill Beckeman founded Linear Retail Properties in 2003 based on a pioneering business plan to Bill Beckeman, be an aggregator of president and CEO www.linearretail.com somewhat smaller, Burlington, Mass. convenience-oriented retail properties in a targeted region of New England. The company purchased its first shopping center weeks after starting the company and has since purchased more than 90 additional retail properties in and around the Boston area, including locations in southern New Hampshire and Rhode Island.

The Burlington, Mass.-based company has experienced very consistent growth over the past 13 years, averaging a new property purchase every seven weeks since inception.

The past year’s pace has even accelerated with a dozen new retail property purchases totaling in excess of $100 million.

With just a few property sales over the years, the company’s current 82-property portfolio, worth about $700 million, puts Linear Retail among the largest retail property owners in New England.

“We have a large portfolio of properties but few are well-known shopping destinations,” Beckeman says. “That’s because our primary focus is on high-quality small shop spaces that appeal to a wide range of retailers, restaurants and service providers, rather than big box or junior box tenants. As a result, our properties tend to be smaller than most large shopping center owners.”

Linear Retail’s assets run the gamut from freestanding netleased properties

and urban retail condos to convenience-oriented strip shopping centers and specialty storefront retail in select downtowns. The average property size is about 20,000 square feet, ranging from 1,500 to 120,000 square feet.

Long-Term Focus Aubrey Cannuscio, Linear’s partner in charge of acquisitions, attributes the company’s success in part to its institutional capital partner. “Linear was started with a large financial institution as our partner and they embraced our unique mission from the beginning,” he says.

“They continue to promote our aggressive growth plans and take a very patient,

The company has averaged a new property purchase every seven weeks since its inception 13 years ago.

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SOLUTION PROVIDER LINEAR RETAIL PROPERTIES LLC long-term view which helps us pursue deals others can’t. Their support has helped us build an enviable track record so brokers and sellers know that they can count on us to perform if we like a deal.”

Linear’s capital has also come in the form of debt financing of its properties.

“Our strategy is very simple and easy to relate to, which lenders seem to appreciate,” says Deepa Krishnamurthy, partner and CFO. “Many of our lenders are local or regional community banks who really understand our markets as well.

Throughout the great financial crisis, many lenders continued to be eager to lend to us.”

The economic downturn also demonstrated the resilience of Linear’s strategy.

The company’s occupancy actually increased every year following 2008 and now stands at 95 percent. “Linear’s original business plan was driven by shopping convenience and it predicted the shrinking size of retailers’ store footprints as well as the growth in demand for restaurants and consumer services,” says Joel Kadis, Linear’s partner in charge of leasing and development.

“These categories were less impacted by the recession and also by the growing competition from e-commerce.”

Linear has 400 tenants and roughly a quarter of them are restaurants, coffee or food & beverage operators. More than one-third are various types of service providers such as personal grooming, medical, bank and financial, fitness and

Cambridge Savings Bank “CSB has had the pleasure of being one of Linear’s primary lenders from its beginning in 2003. Bill has created an extremely talented team that has successfully grown into one of the premier real estate investment companies in New England. Our relationship with Linear has evolved over the years based on its particular needs, and our flexible approach to customize financing structures to fit its business model. It has been an honor to be a trusted partner with such a reputable and successful organization.” -David Ault, FVP, Commercial Real Estate, Cambridge Savings Bank 126

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SOLUTION PROVIDER

wellness, telecom and cell phone and educational service operators.

Also, less than half of its tenants are national brand names. “We have a large number of mom and pop and regional operators in our portfolio,” Kadis says. “Consumers strive to support local merchants but they also want new, interesting and well-run stores with a unique customer experience. We have invested in our marketing using our website SEO and social media to proactively seek quality local operators. We work with tenants to help them market their stores professionally.”

Beckeman adds, “What we do entails a whole lot of hard work by our team on a daily basis. Years ago, I coined the term ‘inertia defiance’ to summarize

“

Our primary focus is on high-quality small shop spaces that appeal to a wide range of retailers.

”

much about our approach. We tend to buy properties that haven’t changed much in years and which may be in need of repair, upgrading or repositioning for today’s shoppers. We simply operate in an impatient manner and try to tackle problems or opportunities as expeditiously as we can.”

A review of the company’s portfolio provides strong evidence that the hard work is paying off.

“I expect our steady growth to continue if not ratchet up a bit in the coming years,” Beckeman says. “A billion dollar portfolio shouldn’t be too far down the road for Linear.” O

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SOLUTION PROVIDER FMH CONVEYORS

One Site

FMH Conveyors is centralizing its three U.S. manufacturing operations into one new site in Jonesboro, Ark., to gain synergies in manufacturing and engineering. BY RUSS GAGER

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o a large extent, brick-andmortar retailing is largely about distribution – getting the right Kurt Huelsman, products to the end president www.fmhconveyors.com consumers. HelpSuwanee, Ga. ing with this point of the distribution process – getting products into trucks for delivery – is FMH Conveyors. “Our history and our core business is truck loading and unloading,” President Kurt Huelsman declares. “The vast majority of our product is built simply around the connection between a building and a trailer and moving product in either direction – unloading or loading.”

Big-box retail is a major market for FMH Conveyors. It consists of unload-

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ing products from manufacturers and distribution centers, and then moving products from the distribution center into trucks bound for the stores. At the store, product is unloaded into the back rooms and then onto the floor for sale.

FMH Conveyors has a long history of delivering solutions for fluid or loose truck loading and unloading applications.

With fluid or loose loading, every square inch of space in a trailer is filled with products instead of being shrinkwrapped on pallets, which costs money and wastes space. Product packaging has evolved over the past 20 to 30 years to become substantial enough that products can be stacked on top of each other without any additional support.

FMH Conveyors designs, sells and services products throughout the United States, Canada, Latin America and Europe. Among the company’s well-

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known brands are Nestaflex, BestFlex, BestReach and MaxxReach. Additional markets for FMH Conveyors are tire handling and wine/spirits, the handling of which is highly specialized.

Ecommerce Market Loading trucks that are handling ecommerce orders is also a big market for FMH Conveyors. In 2015, FMH Conveyors launched BestConnect conveyors, which is a mobile, modular system of conveyors that can be reconnected and reconfigured easily. It is ideal for startup operations during seasonal peaks to increase capacity.

“There has been a need for new users and new entrants in spaces like ecommerce that would like to get some of the benefits and productivity that a conveyor system can do but don’t have the scale or the capital structure to make a firm

SOLUTION PROVIDER investment in a complete warehouse management system,” Huelsman says.

“BestConnect is an opportunity to have a portable and modular system that is the stepping stone into what customers may want to do in a more fixed basis down the road. It allows them to get some of the benefits of having an automated conveyor system within their facility that will help them be more productive in distribution so they can focus their time and resources on their core business of increasing volume.”

Such systems also can be used during busy periods such as the holiday season when business might increase tenfold and then drop back afterwards. A mobile, modular system such as BestConnect can help out during such periods. BestConnect rigid reconfigurable conveyors can be combined with any NestaFlex or BestFlex products for versatile system solutions.

New Facility FMH Conveyors is consolidating its three manufacturing facilities currently located in Suwanee, Ga., Jonesboro, Ark., and Hampton, Va., into one new 195,000-square-foot facility in Jonesboro that will combine the operations of all three locations. Due for completion

in November, the facility will include manufacturing and office space and represent an investment of approximately $12.5 million.

“The layout and configuration will offer better productivity and material flow,” Huelsman says. “We are a builtto-order business, so the demand comes in different shapes and sizes over a period of time. Being in one location will allow us to be flexible with our production team and handle the work that we have in front of us. We will be able to manage the peaks and valleys of demand better in one location than across three.”

That also will mean consolidating each location’s R&D efforts. “Combining the engineering team will allow us to put more effort into future design and development,” Huelsman declares.

FMH Conveyors also is installing a new enterprise resource planning system at its new location that will enable it to better serve its customers as a supplier.

FMH Care A portion of FMH Conveyors’ business that is growing is its FMH Care program. “FMH Care is the new brand name for what is becoming an increasingly more important part of our busi-

ness that is primarily centered around the service segment,” Huelsman says. “The program includes installation and preventive maintenance services, as well as on-call repair. We wanted to invest more into making sure that our equipment is installed, connected to adjacent equipment and also maintained properly.”

Although FMH Cares is growing substantially, the major portion of FMH’s business is still the design and manufacturing of conveyors. “We are very excited about the investments we’re making in the new operation, putting together the right infrastructure and the right people,” Huelsman says. “We are very committed to our customers and continuing to develop new products and solutions for the truck-loading and unloading conveyor marketplace.”

He attributes the company’s success to its innovation. “I think the company’s historic success is based on the individual ingenuity and persistence of each location during their development and growth in the market,” he concludes.

“Our company helped create a category and continued to evolve on the success to bring it to where it is today. Now, together, that strength will carry us forward for decades to come.” O

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SOLUTION PROVIDER SEDLAK

Supplying Expertise Sedlak listens to retailers’ supply chain needs and recommends effective methods without bias that utilize a seamless mix of solutions. BY RUSS GAGER

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etailers face increasingly complex challenges in their supply chains to keep up with consumer demands Patrick Sedlak, for an “anytime, principal anywhere” shopping www.jasedlak.com Cleveland experience. That requires a seamless mix of mobile, ecommerce and brick-and-mortar solutions along with omnichannel fulfillment. Developing and maintaining the William O’Brien, optimal strategies, president facilities, operations and systems to meet these challenges can be overwhelming for many retailers.

For nearly 60 years, retailers of all sizes and types have trusted Sedlak to find the right answers for their distribution and logistics needs.

“We’ve got a very rich history in retail,” Principal Patrick Sedlak points out. The firm has helped all of the major names in retailing as well as niche retailers, and covers the spectrum of brick-and-mortar and direct-to-consumer companies. “We work across the supply chain – sourcing, inventory and physical distribution,” Sedlak adds.

The company also provides services to wholesalers, manufacturers, third-party logistics (3PL) providers and healthcare companies.

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Vice President Lou Cerny (left) reviews the sorter function during the testing phase of a facility implementation.

Senior Consultant Jamie Knapp inspects an equipment installation at a client facility.

equipment, inventory and warehouse management and control systems. And after decades in the business, “We’re the most trusted advisor in the physical distribution business for retailers in the marketplace today,” Sedlak asserts.

The company has consulted for all types of retailers, including those who sell soft goods, hard goods and food and beverages. “One of the things we pride ourselves on is listening to the client to learn what their needs are, then fashioning the right solution to support their goals and direction,” Sedlak says.

President Will O’Brien compares Sedlak’s methods to those of a good physician. “We listen to our client and discern their unique needs, then diagnose the core issues and prescribe the right solution for them,” O’Brien says.

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Cognex Corporation Cognex is a leader in image-based barcode readers for logistics, retail distribution and parcel/postal and offers solutions for many applications such as those used in automated sorting, hand sorting, and bulk sorting. By leveraging the power of machine vision, an image-based system can deliver the highest read rates, offer visual performance feedback for review of data, and have no moving parts which results in greater product life and reliability. Contact Cognex at 844-BARCODE (844-227-2633) or mvsd. insidesales@cognex.com.

Gray Founded in 1960, Gray is an integrated design-build firm offering engineering, architecture and construction services to domestic and international customers throughout the U.S. We are proud to have partnered with Sedlak Management Consultants for more than 35 years.

for it because they have a sore back, we owe it to our clients to challenge their initial requests of us and provide a careful analysis of their situation based on our expertise before offering a cure.”

Not Always Distribution Problems that show up in a distribution center might not be a distribution problem at all, O’Brien points out. If a distribution center is not meeting service levels, it could be due to a carrier missing appointments, thereby causing stock-outs or starving off a just-intime cross-dock program. It also might be an inventory management issue that could be solved by removing out-ofseason or outdated merchandise to increase the distribution center’s capacity.

“We visited a major U.S. retailer recently, and they wanted us to help their distribution center gain more capacity,” O’Brien relates. “It would

have been easy for us to do that and be done, but we realized that they really needed better control of how they buy product and exit each season.

Their growth is significant and will require some additional capacity, but we can minimize that by helping them alleviate their inventory management and product flow challenges.” According to O’Brien, Sedlak’s expertise in the retail industry helps the firm relate bigger-picture realities to their clients and land on the right solutions.

Not an Automatic Solution Sedlak evaluates and recommends automation in distribution centers as it deems appropriate. “Not all distribution centers have to be highly automated,” Sedlak emphasizes. “We go to our clients and suggest the right design and the right level of automation for what their specific needs are.”

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SEDLAK He adds that Sedlak’s independence is a critical part of its business model. “One of the reasons that we’re the most trusted group in retail distribution is because we’re independent of all those technologies – we don’t sell any equipment or applications,” Sedlak says. “So when a customer comes to us, we give them the answer that is right for their needs. If we give them the roadmap to success, then we ourselves will succeed.”

One trend in the industry that is driving increased use of material-handling technology – such as automated storage and retrieval systems, multishuttles, miniloads, autobaggers and high-speed sorters – is an increasing scarcity of labor.

“There’s a shortage of available labor, or labor coming in at different skill levels, or speaking multiple languages within one building,” O’Brien says. “The concentration of distribution centers in Columbus, Ohio, Louisville, Ky., Nashville, Tenn., and other markets is outstripping the availability of labor. We have a client in Columbus that said, ‘I have been in this market my entire career, and I’ve never had a problem with labor availability until the last two years, and this year is much worse than last year.’” The right level of automation can help reduce labor needs and increase productivity for companies facing this challenge.

In addition to material-handling equipment, a distribution center also needs the right software to support operations. “Without software, none of it works,” Sedlak stresses.

Warehouse management, execution and control systems, along with bar coding or voice picking software, might be necessary depending on the client’s situation. Among the considerations for when and how to utilize these technologies is whether a retailer has separate warehouses dedicated to ecommerce and brick-and-mortar, or combines both operations in a single distribution center. In combined operations, the right software can readily drive both case-pick for retail stores and unit-pick for online order fulfillment, Sedlak explains.

The way in which the software is configured also can have unexpected benefits. “If a retailer employs workers with disabilities – who make a great workforce in a distribution operation – and you can present the information to them in a way that they can work with it, they become highly efficient and independent, which can positively impact their lives and be a pretty rewarding part of what we do,” O’Brien says.

Third Parties Can Help Sedlak also assists retailers in determining whether or how to outsource distribution operations to a third-party logistics (3PL) provider to solve supply chain challenges.

“A significant part of our business is gathering the requirements and facilitating the bidding process for working with 3PLs,” O’Brien points out. It’s a decision that depends on multiple factors.

One factor might be the addition of a new sales channel.

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SOLUTION PROVIDER

“

When a customer comes to us, we give them the answer that is right for their needs. portion of its overall business, might consider 3PL, O’Brien says.

Sedlak might also consider recommending 3PLs if clients need greater expertise than they can provide on their own for a specific distribution function.

This could include returns processing or product repairs.

Building a Career Part of the reason for Sedlak’s long-standing success is the way it treats its associates. “We are a family run business and we treat our employees as family,” Sedlak declares. “We have an average of 13 years’ retention of our associates because we pay attention to our associates’ needs. We respect our associates and support them personally and professionally.”

Sedlak encourages promoting from

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within. “We try to provide an environment for our associates to be successful, and we’re very proud of that,” Sedlak continues. “We’ve got the best people in the industry working with us, and they want to keep working with us. We provide for them, and they provide for us – it’s a great ecosystem. Everything we offer – experience, knowledge, personality – is delivered by our associates.”

O’Brien recalls accompanying one of his project managers to a client’s grand opening of the distribution center Sedlak designed and deployed on time and on budget. He noticed the project manager was hugged by every one of the client’s employees with whom she had worked. “That is the level of satisfaction that Sedlak aims to achieve on every project,” he says.

“I’ve seen plenty of people that can design, build and open a facility on time and on budget, but people don’t always love them afterwards,” O’Brien remarks. “I’ve seen plenty of people who are personally liked by their clients but might not have delivered the project on time and on budget. Combining those is rather remarkable.”

Looking to the future, Sedlak plans to continue to expand its core services in distribution, as well as build a new practice focused on logistics. “It’s hard to find an opportunity in distribution that doesn’t have tentacles in transportation or how you’re flowing goods into the facility,” O’Brien concedes. “If you overwhelm the building’s capacity in storage or receiving, it might look like a distribution problem, but it also could be a poor product flow plan.”

The company has confidence in its growth, with repeat client business at a healthy 70-plus percent and new client business steadily increasing. “Our growth plans are coming along very nicely by every measure that we take,” O’Brien reports. O

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