CSA - 1019

September/October 2019

Top 100 Retailers Philadelphia’s Retail Resurgence Retailers Take On Machine Learning

Protecting Customer Trust

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State of the Industry Report sponsored by

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from the editor’s desk

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tech viewpoint: a retail tech column

On the Level: A real estate column

Contents VOL. 95 SEPTEMBER/OCTOBER NO. 5

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State of the Industry Report from Worldpay: Protecting Customer Trust

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Top 100 Retailers

FEATURES

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Decathlon, the world’s largest sporting goods retailer, brings its value-priced, all private brands retail format to the U.S.

Growing demand for ‘responsible retail’ requires new level of transparency by retailers.

Commentary: Gen Z bring unique perspective to the workforce.

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TECH

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Walmart, The Home Depot and Joann are among the retailers leveraging machine learning.

Bob’s Discount Furniture enhances digital furniture with 3-D, AR

CSA (USPS 054-410; ISSN 0193-1199), is published bimonthly by EnsembleIQ, 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631, on a controlled basis to qualified retailer titles and architects. Real estate and shopping center owners and developers $75 per year. All other nonqualified $125 per year. $190 per year for Canadian subscribers; $275 per year for foreign subscribers, air-mail only. Single-copy price: $20. Periodicals postage paid at Chicago, IL and additional mailing offices. ­POSTMASTER: Please send address changes to CSA, Circulation Fulfillment Director, P.O. Box 3200, Northbrook, IL 60065-3200. Subscription changes may also be emailed to chainstoreage@omeda.com, or call 847-564-1468. CANADA POST: Publications Mail Agreement # 40612608. Canada returns to be sent to Bleuchip International, P.O. Box 25542, London, ON N6C 6B2. Vol. 95, No. 5, September/October 2019. Copyright ©2019 by EnsembleIQ. All rights reserved.

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Contents VOL. 95 SEPTEMBER/OCTOBER NO. 5

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STORE SPACES

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The North Face’s new format will serve as model for updating the majority of its locations.

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Meet the SPECS 2020 Advisory Board.

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Moisture mitigation is one of the biggest — and costliest — challenges in flooring.

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Q&A: HFA’s CEO, Dave Wiglus, discusses the benefits of being an integrated A/E firm.

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Shoptalk: Update on trending stores includes new Puma and Nordstrom Local openings in New York.

REAL ESTATE

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Trending Topics: Gap Inc.’s new spin on renewable energy; Target’s updated energy goals; and Walmart’s mothers’ room pilot.

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The top five areas vulnerable to facilities overspend include funding maintenance already under warranty.

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Fashion Returns to Philly The retail void created when The Gallery closed in 2015 has been filled by Fashion District, a big, bright and airy collection of 100 stores, restaurants, and entertainment options.

A Tale of Retail in Center City PREIT & Macerich’s Fashion District leads a pack of new multi-use developments rising up in one of the most densely populated downtowns in America.

Hot Markets: Philadelphia Prime retail locations are hard to find in the No. 8 metro; vacancy rates in prime areas are below 2.5% The Great Centers of North Florida The Sunshine State is experiencing a jobs and population boom that has retail centers rising, renovating, and expanding. Go on the road with CSA to visit the hotbeds of retail in Jacksonville, Gainesville, and Orlando.

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CHAIN STORE AGE

FROM THE EDITOR’S DESK

The Apocalypse That Isn’t

Sometimes perception gets in the way of reality. Such is the case, I think, with the death of physical retail.

There is seemingly no end to the ongoing stream of reports trumpeting the death of brick-and-mortar. Headline after headline calls out that the “retail apocalypse” is upon us, reaching a fever pitch every time a retail chain files for bankruptcy or downsizes. It’s an intriguing narrative, one that would have you believe that physical retail is going the way of dinosaurs. The fact that it’s not true seems to be beside the point.

Yes, online is growing at a faster rate than offline — but how could it not given the maturity of brick and mortar? And yes, some retailers have closed up shop, undone by debt burdens, overexpansion, outdated business models, evolving consumer preferences or a failure of imagination (or any combination thereof). More are likely to follow. But to judge the health of an industry as huge as retail based on its weakest players makes no sense to me.

Some recent data serves as an inconvenient truth to the ongoing retail apocalypse scenario. Most revealing is the new study from consulting firm IHL Group, “Retail Renaissance — True Story of Store Openings/Closings,” which found that, on average, more than five (5.2) retail chains are opening stores for every retailer closing stores in 2019.

Supermarkets, drug stores, convenience stores and mass merchants/warehouse clubs represent the fastest-growing sector in terms of new store growth: For each company closing stores, 9.5 are opening new locations. The biggest growth is in convenience stores and dollar or extreme-value players such as Dollar General and Five Below. Fast-food also continues to expand at a torrid pace and is the fastest-growing category in the restaurant sector.

“U.S. retail has increased $565 billion in sales since January of 2017, fed not just by online sales growth but net store sales growth,” said Lee Holman, VP of research for IHL Group. “Clearly there is significant pressure in apparel and department stores.

However, in every single retail segment there are more chains that are expanding their number of stores than closing stores.”

What’s more, the closings are not being driven by a limited group of retailers, but the overall market, IHL found. Twenty companies — led by Payless Shoe Source with a whopping 2,354 locations, Gymboree, Charlotte Russe and Dressbarn among others — represent 75% of all store closings. Sixty-four percent of retailers are increasing the number of stores in 2019, 12% are decreasing and 24% report no change in store counts.

Sales Growth: The promoters of the “store is dead” narrative seem to forget that the vast majority of sales still occur in-store. Total retail sales were $3.63 trillion in 2018, according to the U.S. Department of Commerce. Of that, consumers spent $513.61 billion online.

The National Retail Federation forecast that retail sales (excluding automobile dealers, gasoline stations and restaurants) during 2019 will increase between 3.8% and 4.4% to between $3.82 trillion and $3.84 trillion. Online sales, based on expected growth of 10% to 12%, would fall between $751.1 billion and $764.8 billion (included in the overall total.). Looking further ahead, IHL expects 81% of all retail sales will still go through stores by 2021.

Finally, consider Gen Z. According to a new survey by A.T. Kearney, consumers ages 14 to 24 overwhelmingly prefer to do their shopping in stores. Eighty-one percent of Gen Z respondents said they prefer to purchase in stores, and 73% said they like to discover new products in stores.

The bottom line is that physical retail is not poised for extinction. Simply put: Stores still matter.

“Without question there are many challenges to [store] retailers today, but overall that state of the industry is strong,” the IHL report stated.

Marianne Wilson mwilson@chainstoreage.com

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CHANNELS chainstoreage.com > COMMERCE > CUSTOMERS

An EnsembleIQ Publication

Corporate Office: 8550 W. Bryn Mawr Ave., Suite 200, Chicago, IL 60631

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Reprints: To order reprints contact Wright’s Media at EnsembleIQ at wrightsmedia. com or (877)652-5295. Minimum: 100 copies. Permissions: Materials in this publication may not be reproduced in any form without written permission. Direct permission requests to Gary Esposito, Publisher, Chain Store Age, 11-43 Raymond Plaza West, 16th Floor, Newark, NJ 07102. Contact Copyright Clearance Center, 222 Rosewood Drive, Danvers, MA 01923, (978) 646-2600 or (855) 239-3415, or on the Web at copyright.com for immediate authorization to photocopy from Chain Store Age (ISSN 0193-1199). Editorial Calendars: chainstoreage.com. Back issues: (813) 627-6707. News Tips: Call Marianne Wilson at (212) 756-5261 or e-mail: mwilson@ chainstoreage.com. Letters to the Editor: Must include name, address and daytime phone number for confirmation. We re­serve the right to edit correspondence for clarity and space. Send via e-mail: mwilson@chainstoreage.com or via mail: Marianne Wilson, Editor, Chain Store Age, 11-43 Raymond Plaza West, 16th Floor, Newark, NJ 07102

Corporate Officers Chief Executive Officer Jennifer Litterick Chief Financial Officer Dan McCarthy Chief Digital Officer Joel Hughes Chief Innovation Officer Tanner Van Dusen Chief Human Resources Officer Ann Jadown Executive Vice President, Events & Conference Ed Several

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NEW CONCEPTS

Decathlon Goes Big In San Francisco

French sporting goods retailer trades in low prices, private brands

By Marianne Wilson Decathlon, the world’s largest sporting goods retailer, has dropped anchor in the United States. But don’t expect Nike, Puma or any other familiar global brands.

The value-priced French retailer, which operates more than 1,500 stores across 51 countries, entered the U.S. in spring 2018, opening an 8,313-sq.-ft. “lab” store in downtown San Francisco where it tests and sells products. It opened its first full-scale location, a 47,000 sq. ft. “experiential center” at East Bay Bridge shopping center in Emeryville, Calif., this past April. Next up, in November, is a 38,000 sq. ft. store at Potrero Center, a power center in San Francisco.

As a retailer, Decathon is an outlier in the sporting goods industry in that it is completely vertically integrated. Founded in 1976, the company began designing and manufacturing its own products in 1986.

To date, it has created more than 25 private brands across nearly every sport and fitness category, from running and golf to snorkeling and fishing to badminton and table tennis. It files up to 40 patents annually.

“What really sets Decathlon apart from

other sports retailers is how we innovate, design and manufacture our own brands for each individual sport, which we make available direct to our community of sports lovers,” stated Decathlon USA’s chief executive officer Michel d’Humières. “Each of our products is the result of extensive innovation to ensure the highest quality product at the most affordable price, thereby making sports more accessible to everyone.”

Decathlon’s vertical business model allows it to sell products at prices far below other sporting goods retailers that, for the most part, still rely on well-known brands. The assortment in Decathlon’s U.S. stores include all its in-house brands plus a few U.S.-based items, including some baseball gear and U.S.-made bike brand Detroit Bikes.

Technology: Decathlon’s U.S. store experience is infused with technology, with an eye to making shopping as seamless as possible.

The retailer runs store operations — including payments, clienteling, inventory management, fulfillment, and order routing — in its Emeryville location via iPhones. The employees are equipped with a corporate

Tally, a fully autonomous inventory robot, roams store aisles to help monitor inventory.

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iPhone that runs the NewStore omnichannel platform, which features an integrated, cloud-based order management system and a mobile POS solution.

The store has no traditional checkouts.

Customers can approach any employee when they are ready to make a purchase. The associate places a customer’s item (or entire shopping cart) inside a mobile checkout station that is equipped with an internal RFID scanner that automatically reads all the items.

The associate then uses their iPhone to scan a unique QR code on a static sticker placed top of the mobile checkout station, which receives all the price data on the items inside.

This opens a scrollable shopping cart in the employee app, which can also be used to scan individual products.

The NewStore system is connected to store security systems, so items that have been paid for will not set off security alarms when a customer exits the store.

Associates can also use their iPhones to offer endless aisle inventory access to shoppers.

By scanning an item’s barcode, associates can inform customers of all available colors, sizes and other variations of the product, and locate any desired SKU. If a specific item is not in stock, the associate can have it shipped to the store and filled for a home delivery or in-store pickup. (A 50,000 sq. ft. warehouse in the San Francisco suburb of Oakland currently services all of Decathlon’s U.S. stores and online ordering.)

Decathlon also deploys autonomous inventory robots (“Tally,” from Simbe Robotics) in its U.S. stores. Connecting to the retailer’s back-end systems, the bot roams the aisles, using RFID and computer vision technology to conduct precise, daily inventory counts and provide specific location information for products.

All of Decathlon’s in-store technology frees up store associates, said Decathlon’s director of communications and public relations, Jennifer Tetrick.

“This allows our teammates to interact more with customers, offer input on product and provide a better overall experience,” she explained.

Rather than a massive retail launch across the country, Decathlon has chosen to focus on San Francisco. Expansion plans beyond 2019 will largely hinge on the success of its initial group of stores.

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ANALYSIS

Growing Demand For ‘Responsible Retail’ Retailers should prepare for new level of transparency

By Jill Standish It’s set to be a strong holiday season, with many reasons to be positive for retailers. New research shows most consumers are feeling good about their holiday spending, with 85 % of shoppers planning to spend the same or more than they did last year.

Accenture’s 13th Annual Holiday Survey of 1,500 U.S. consumers found shoppers plan to spend an average $637 on holiday shopping, with gift cards and clothing and footwear topping the list of expected purchases.

But, more than ever, retailers know they must find ways to sustain the seasonal surge across the whole calendar year. The leaders recognize a clear brand purpose and greater customer-centricity is the best way to get the most valuable consumers to buy into the brand beyond the holidays.

That means being able to respond quickly and creatively to changing consumer behavior, while understanding that not every customer delivers the same value to the business. Those that fail to do so could face profitability challenges.

A New Green Deal It’s no surprise that environmental sustainability is front of mind for today’s climate-conscious consumers. More and more are willing to trade retail “extras” like next-day shipping and even product packaging in favor of greater environmental responsibility.

Accenture’s survey shows many consumers want to reduce their carbon footprints — whether through slower shipping, less packaging, or buying second hand. In fact, nearly half of consumers say environmental factors are important in choosing which retailer to shop with in the first place.

You can see the impact in fashion. Consumers are increasingly looking to reduce “fashion waste” by favoring rentals over outright purchases. Nearly a quarter of surveyed consumers said they’re likely to rent rather than buy

clothes for their holiday parties (rising to a third of older millennials).

It’s all part of a growing demand for “responsible retail.” And it goes deeper than the environment. More than half of consumers think retailers also have a responsibility to address wider social issues through their business practices and working conditions (and nearly as many will decide who to shop with on this basis).

That is a new level of transparency retailers need to be prepared for.

The Physical Touch Still Matters The physical store remains a critical retail channel, especially over the holidays. Indeed, Accenture’s research shows consumers expect to do around half their holiday shopping in store this year.

What’s more, consumers are significantly more likely to say they’ll purchase in store, not just browse. That implies fewer shoppers are treating retail stores as “showrooms” for online purchases when they get home.

That’s great news for stores — if they can sustain the trend beyond the holidays. In doing so, retailers should see the festive period as the perfect opportunity to focus on the customers that deliver the most value to the business.

Blending strong data and analytics capabilities with creativity around the store footprint, they can use the surge in holiday traffic to attract the new customers who look most like their most profitable existing customers — those on whose loyalty they can depend all year round.

But they also have to get smarter about discounting. To avoid the blanket “one size fits all” discounting that can hit retail profits hard, retailers need to get much more innovative.

Imagine offering “precision promotions” for a specific customer at a specific moment in a specific store based on real-time inventory.

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More than half of consumers think retailers also have a responsibility to address wider social issues through their business practices and working conditions Sounds radical, but hotels and airlines have been doing this kind of thing for years. It’s more complex in physical retail, but this is the level of ambition needed across the sector.

Land Grab For High-Lifetime-Value Customers Continuously shifting patterns of consumer behavior make retail far more complex than it once was. To keep up, retailers need to understand that it’s not about making false distinctions between online and in-store retail channels. Rather it’s about recognizing that the customer is the channel — and serving each one as an individual.

That means being much more proactive and forensic with customer data — something which has been a perennial challenge for the sector. But it’s now an imperative. Retailers should be using micro-segmentation to orient the whole strategy around the needs and expectations of the most valuable customers.

By translating that level of data sophistication into a “humanized” form the whole workforce can get behind, and combining it with a clear brand purpose centered around responsible retail, retailers can ensure they deliver for their customers over the holiday period, and long into the future.

— Jill Standish is senior managing director and head of Accenture’s global retail practice.

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Protecting Customer Trust

State of the Industry Report sponsored by

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CONTENTS 14

Ensuring Trust

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Spotlight on Data Collection Data Breaches & Customer Sentiment

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Third-Party Providers: Compliance is Key How To Reduce Risk

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Make Data Protection Mission Critical

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CSA’s Top 100 Retailers

Fighting Fraud With AI

Ensuring Trust As soon as a customer engages with a retailer or any other type of business, the company instantly takes on a vital responsibility: protecting the customer’s personal data. Cyberattacks and data breaches not only have financial consequences, they run the risk of losing the most important asset in any organization — customer trust.

This state of the industry report on customer data looks at the use of data in today’s marketplace and how its use has elevated data protection to critical levels.

It will examine the risks and rewards of managing data assets in the high-pressure retail environment and the technologies retailers are using to protect customers data. The report will also look at future trends in data protection, including the use of artificial intelligence.

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DATA BREACHES & CUSTOMER SENTIMENT

Spotlight on Data Collection he importance of providing outstanding and personalized customer experiences is an often-discussed topic in the retail world. Privacy and security are also top-of-mind among those responsible for the success of retail organizations. But it’s vital to link the two discussions to understand why protecting customer data is so important today.

Retailers collect and manage more types of customer data than ever before because it represents the core materials used to capture payment and craft the personalized customer experiences that are so essential to successful retailing in a mobile-first world. A good customer experience helps set brands apart,

Retailers are developing the skills to craft customer experiences that go beyond their needs to surprise and delight customers as never before.

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allowing them to engage and win customers in today’s hypercompetitive market.

Retailers also collect customer data because it has become essential to their mission of creating brand loyalty, which is key to repeat business. Take, for example, data from fitness apps that may offer diet and workout information to enhance a customer’s overall fitness experience. This type of service allows retailers to retain and grow their business by identifying what interests their clientele.

Additionally, data can be used to help retailers put a better plan together to provide incentives or coupons designed to provide rich and seamless customer experiences specifically tailored for that consumer. It’s this personal data that most retailers intuitively recognize as requiring greater care.

What’s exciting today is the growing ability to make meaningful connections between seemingly unconnected data points. Retailers are developing the skills to craft customer experiences that go beyond their needs to surprise and delight customers as never before.

Building better consumer experiences is central to the core business strategy of every retailer.

A brand’s reputation and credibility are beyond critical in a competitive and expanding retail market. Retailers strive to provide a positive, rich experience but if they don’t protect customer data, it brings them up for reputational risk.

Trust with your customers is fundamental to success — and once secured, it must be maintained. When organizations have data breaches or incidents, even the most loyal customers will find their way to the competition.

Consider just a few data points on consumer sentiment related to data breaches at retailers:

• A 2017 PwC report found that 85% of consumers won’t shop at a business if they have concerns about their security practices. Nearly the same number (87%) of consumers say they will take their business elsewhere if they don’t trust that a company is handling their data responsibly.

• A 2018 “Brand Trust Survey” by Janrain found that 48% of U.S. internet users try to buy exclusively from companies they believe will protect their personal data.

But none had full trust in any industry; 6.7% of US internet users trusted brickand-mortar retailers the least to protect personal data, while 4.4% trusted online retailers least.

• A 2019 Verizon study found that 69% of survey respondents would avoid a company that had suffered a data breach, even if it offered a better deal than competitors. More than half (52%) of the consumers surveyed said if they were personally affected by a data breach, they would avoid the company that had compromised their information for four to six months; 29% said they would never use the brand again.

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HOW TO REDUCE RISK Retailers have their work cut out for them when it comes to protecting customers, especially if they process or store cardholder personal- and paymentrelated data. The U.S. leads the world in attacks and there are no signs of a slowdown on the horizon.

• The 2018 Thales Data Threat Report Retail Edition

found that half of all U.S. retailers had been breached in the past year, with three-in-four having suffered a breach historically

• Ponemon Institute’s 2018 Cost of a Data Breach

Study estimates that the average cost of a data breach globally exceeded $3.86 million, with the costs to U.S. companies by far the highest at an average of $7.91 million.

Third-Party Providers: Compliance Is Key etail organizations generally aren’t the only ones collecting data and creating rich database tables. They often go to a third-party service provider for demographic, behavioral and other data points. That’s where the industry is starting to see a lot of risk: Attackers are increasingly taking advantage of trust between data or analytics providers and their retail customers.

Threat groups exploit this trust and attack these third parties.

They can target a service provider that has access to hundreds, if not thousands, of retail organizations as customers. An attacker’s ROI is far greater pursuing third parties collecting this type of data than individual organizations.

Recently, eCommerce retailers have come under sustained attacks from a third-party campaign that targets customer service chatbot clients. Hackers inject malicious code to the chatbot client and the client is then embedded onto the checkout page. Because the merchant trusts the chatbot client, the client is infected, and the attacker walks away with cardholder data and personal information.

Third-party data services are increasingly essential components in providing more compelling customer experiences. Whether a company is a payment service provider, ISP, POS software, loyalty, marketing or any other third party, it needs to be vetted continuously.

Take the time to ensure the company is protecting your data and is meeting top quality data collection and storage practices and adhering to any industry standards that are in place, such as PCI DSS compliance for storage of payment related data.

When working with third parties, retailers should look at their annualized security requirements and build an effective plan to manage risk. Start with a working agreement and legal language, making sure that it meets and adheres to requirements. But always remain diligent. Ultimately, it’s up to each organization to be proactive as part of their annualized assessments and not just setting a contract and walking away.

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• Symantec estimates that 4,800 websites each

month are compromised by some form of hacking attacks in 2018 The good news is there has been a positive uptick in merchants that are getting smart about protecting consumers by deploying technology such as pointto-point encryption and tokenization. Point-to-point encryption is designed to protect data at the point of capture and in motion. Encryption helps protect cardholder and other personally identifying transaction data as it makes its way through the financial system. Tokenization goes a step further by removing cardholder data from the retail environment and replacing the personally sensitive cardholder data with tokens.

Attackers are ultimately going after payment card data through different points of vulnerability. With so many ways to accept payments today — in-store, online or through mobile apps — retailers need to stay protected in every channel and on every device.

Encryption and tokenization are solutions proven to reduce risk while preserving essential business functions and serving today’s consumer.

Tokenization solutions make it possible for the retailers to operate their business without all the risk. Using the token, which contains no actual cardholder data, merchants can bill a card-on-file and schedule automatic payments. Retailers can perform data analytics, identify consumer behavior patterns, or enable omni commerce, such as buying online and returning in store, without having to reacquire the customer’s credit card number.

Tokenization helps to ensure that if an attacker does get into an environment, there’s nothing that attacker can do with that data. The reason for this is that tokenized data it cannot be monetized and sold data on the dark web. It mitigates and devalues that data to ensure that attackers can’t benefit from the breach.

Merchants know they need to perform full risk assessment but often don’t know where to start. One resource is the National Institutes of Standards and Technology (NIST) cybersecurity framework. NIST is a great asset for organizations to understand how to assess and determine their own risk.

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Make Data Protection Mission Critical he entire retail industry is vulnerable in terms of attacks. Size doesn’t come into play: From small merchants to midmarket players to national chains, all retailers need to be on high alert.

With everything becoming more connected, it is likely the industry will experience attacks exploiting new vulnerabilities. The sophistication of bot attacks will expand to smart consumer devices in addition to enterprise infrastructure.

Encryption for all retail transactions should be a must for companies that capture payment data with retail purchases. It has been proven to reduce and thwart an attack. Tokenization is a must for a company that stores cardholder data, which is something that many larger enterprise and mobile commerce merchants do. But not all tokenization is created equal. A retailer should ensure that its service providers demonstrate practical current expertise at scale without impacting the merchant’s ability to provide excellent customer service.

There is no question that the implementation of data protection technologies such as encryption and tokenization is absolutely necessary in today’s environment. However, being confident that those solutions are operating as expected is also critical. A company should make sure its solution(s) also provides alerts to help identify

when there’s a problem. Finally, all retailers should have a documented incident response plan so that they can take quick and effective action as needed.

Retailers face both real and perceived threats that make protecting customer data mission critical. The material costs of a data breach are well documented, and retailers need to understand those risks and plan for their mitigation. If there’s a perceived security threat, customers will go elsewhere.

Customers will abandon their cart and their loyalty if they do not feel safe and secure.

Ultimately, a layered approach of security, encryption and monitoring represents the best practice for any organization seeking to protect customer data. Everyone has a house key to get in your door — but they probably also have an alarm and a smoke detector. Those are different tools designed for different attack vectors or threats in your house.

A similar approach is essential in preparing an effective defense of a company’s vital assets, including the customer data they are responsible for protecting. Retail organizations face a myriad of threats from a variety of attackers using diverse tools in heterogeneous environments. The importance of protecting customer data makes investments in layered defenses an essential pillar for any retailer security plan.

FIGHTING FRAUD WITH AI

Retailers are using artificial intelligence (AI) to help connect the dots required to protect their businesses from fraud and on the timeline that eCommerce demands.

AI is increasingly playing a crucial role in helping retailers to strike the right balance of stopping the fraudulent transactions while letting the good ones through.

Fraud detection traditionally used rules and configurations to work. If rules don’t mitigate the risk, you tweak the rules and change configurations. It’s somewhat of a manual process that uses real resources to make determinations and assess vulnerabilities.

AI helps identify and respond to threats with greater precision and speed than with traditional rules and configuration implementations.

Machine learning and AI make it easier for merchants to identify, understand, and respond faster to protect against fraud. AI makes a lot of that learning and preservation of data easier and more efficient.

AI is an exciting field with seemingly limitless potential.

Machine learning and AI embody the concept of continuous improvement, iterative cycles of intelligence, learning and interpretation. In the short term, it’s likely that artificial intelligence will get stronger and smarter, helping to combat the variety of susceptibilities that come with data storage and processing.

ABOUT FIS

The Worldpay from FIS solution suite is part of the FIS Merchant Solutions business, which serves merchants and eCommerce providers around the world. FIS acquired Worldpay on July 31, 2019.

FIS is a global leader in technology, solutions and services for merchants, banks and capital markets that helps businesses and communities thrive by advancing commerce and the financial world. For over 50 years, FIS has continued to drive growth for clients around the world by creating tomorrow’s technology, solutions and services to modernize today’s businesses and customer experiences.

By connecting merchants, banks and capital markets, we use our scale, apply our deep expertise and data-driven insights, innovate with purpose to solve for our clients’ future, and deliver experiences that are more simple, seamless and secure to advance the way the world pays, banks and invests.

Headquartered in Jacksonville, Florida, FIS employs about 55,000 people worldwide dedicated to helping our clients solve for the future. FIS is a Fortune 500 company and is a member of Standard & Poor’s 500 Index.

To learn more, visit www.fisglobal.com. Follow FIS on Facebook, LinkedIn and Twitter (@FISGlobal).

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TOP100

RETAILERS 2019

By Marianne Wilson

or all the disruption in retail, there is surprising stability in the upper echelons of Chain Store Age’s Top 100 Retailers list, an annual ranking of the nation’s largest retail companies based on their annual revenue.

As it has for the past 20-plus years, Walmart, the largest retailer in the world, tops the rankings. The $514 billion retail giant continues its successful transition to the omnichannel marketplace, investing in an array of tech-driven initiatives that seamlessly blend brick-and-mortar and online operations. The chain also is investing significant resources in updating its physical assets. Remodeling efforts include better lighting, wider aisles, selfcheckouts and such innovations as autonomous self-driving robotic floor scrubbers, automated shelf scanners and vending machine-styled pickup towers.

When it comes to e-commerce, Walmart is firing on all cylinders. Although it is still dwarfed by Amazon, the company surpassed Apple in 2018 to become the third-largest online retailer in the U.S. (eBay is second), according to eMarketer. Approximately 90% of the U.S. population lives within 10 miles of a Walmart location, giving it a leg up on the competition, particularly in the cut-throat grocery marketplace. The chain’s 4,750-plus namesakes stores serve as valuable hubs for e-commerce order fulfillment and delivery — nearly 3,000 of its 4,750 U.S. stores now offer pickup for online grocery orders and more than 1,100 locations offer same-day delivery for groceries. Walmart plans to expand its grocery delivery membership pilot, “Delivery Unlimited,” to more than half of its stores by the end of 2019.

Walmart’s investments have paid off handsomely in recent quarters and show no signs of losing momentum. The chain’s most recently completed quarter marked its 20th consecutive quarter of U.S. sales increases and its 19th quarter of traffic growth. E-commerce sales surged 37%.

Amazon: Walmart’s biggest and fiercest rival, Amazon, is No. 2 on the list for the third consecutive year. The e-commerce giant passed the $200 billion mark in 2018 for the first time in its history amid record sales. But the company’s online growth is slowing as its platform matures and

traditional retailers such as Walmart up their digital game. Amazon is expected to increase its share of U.S. online sales from 36.5% in 2018 to 37.7% in 2019, according to eMarketer. To spur growth, Amazon in investing in a number of initiatives, with a big focus on faster delivery to customers, from expanding its air delivery network, Amazon Air, to providing employees with $10,000 to start their own local delivery business.

The company is also increasingly focused on its third-party marketplace, where it collects fees for warehousing, fulfillment and shipping with no inventory risk. In 2018, third-party sellers accounted for 58% of all physical goods sold through Amazon, up from 30% in 2008. Amazon has released an array of tools and services to help merchants better manage their business, from brand analytics to global registration. Most recently, it bought technology startup INLT to help sellers simplify complicated cross-border sales processes.

Most of Amazon’s profit is still generated by its other business as it has expanded to become a major player in a wider variety of industries. The company’s cloud computing division, Amazon Web Services, is the world’s leading cloud-computing infrastructure service. And Amazon’s digital advertising business is reportedly on track to generate some $22 billion in annual sales by 2022.

Health Care: As Walmart and Amazon continue to look for new areas of growth, they are both diving deeper into the estimated $3.5 trillion health care industry. In 2018, Amazon announced a joint venture with Berkshire Hathaway and JPMorgan Chase to combat rising health-care costs among their employees, and also purchased online pharmacy Pill Pack. Most recently, it debuted Amazon Care, a healthcare pilot available to Amazon em-

METHODOLOGY: TOTAL REVENUE FUELS LIST Chain Store Age’s Top 100 ranks companies by total revenue (as opposed to only retail sales) as reported in a firm’s most recently completed fiscal year. The numbers for privately owned companies that do not release annual reports and/or financial statements are estimates based on independently published reports and CSA research (as compiled by contributing editor Debra Hazel).

The metrics listed in the Top 100 include net income and store count. For retailers based in North America, the data reflects the company’s total global store network (except where otherwise noted). For foreign-based companies such as Ikea, only the metrics relating to the retailer’s North American division are given (except where otherwise noted).

18

18-25_CSA_10_18_Top100.indd 18

ployees in the Seattle area. The program includes both virtual and in-person care, with telemedicine via app, chat and remote video, along with followup visits and prescription drug delivery in person directly at an employee’s home or office.

Walmart is also piloting new programs. In September, the chain opened its first-ever standalone facility devoted to health and wellness, in Dallas, Georgia, with a second location in the works. The new “Walmart Health” facility offers an array of services at “low, transparent prices,” including primary care, laboratory tests, X-rays and diagnostics, counseling, dental, optical, hearing and more.

The retailer’s Sam’s Club division recently launched a pilot in three states that offers its members four different bundled healthcare options that will help cover the costs of routine primary care, dental, optical and alternative medicine, and also offer select free generics.

Another Top 100 retailer, Best Buy (No. 14), has also entered the healthcare marketplace, with a focus on digital-health technology and healthmonitoring services. In 2018, the retailer acquired Great Call, a provider of provides health and emergency response services to seniors. More recently, it acquired Critical Signal Technologies, a seniorfocused health services company.

The Top 100 list has changed very little during the past few years, a tribute to the innovation and outof-the-box thinking embraced by the retailers that dominate it. The boundaries that once separated physical retail from online retail are rapidly disappearing. For the Top 100 retailers, that’s a challenge and opportunity that will define their future.

SEPTEMBER/OCTOBER 2019

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1

2

3

Walmart Inc.

Bentonville, Ark. 1/31/2019 www.walmart.com

Amazon.com

Seattle 12/31/2018 www.amazon.com

CVS Health Corp.

Woonsocket, R.I. 12/31/2018 cvshealth.com

4

Costco Wholesale Corp.

5

Walgreens Boots Alliance

6

The Kroger Co.

7

Issaquah, Wash.

9/2/18 www.costco.com

Deerfield, Ill. 8/31/2018 www.walgreens.com Cincinnati 2/2/2019 www.kroger.com

The Home Depot

Atlanta 2/3/2019 www.homedepot.com

8

Apple Inc. E

9

Target Corp.

Cupertino, Calif.

9/29/2018 www.investor.apple.com

Minneapolis 2/2/2019 www.targetstores.com

10

Lowe’s Cos. Inc.

11

Albertsons

12

13

14

15

Mooresville, N.C. 2/1/19 www.lowes.com

Boise, Idaho 2/24/2018 www.albertsons.com

Alimentation Couche-Tard

Laval, Quebec 4/29/2019 www.couche-tard.com

2018 Revenue [000]

2017 Revenue [000]

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

2017 Store Count

514,405,000

500,343,000

6,670,000

9,862,000

11,361

11,718

232,887,000

177,866,000

10,073,000

3,033,000

527

485

194,579,000

184,786,000

-594,000

6,622,000

9,900

9,803

138,434,000

126,172,000

3,134,000

2,679,000

762

741

131,537,000

118,214,000

5,031

4,101,000

18,500

13,200

44%

121,162,000

122,662,00

3110000.00

1,907,000

2,764

2,782

$3.84

11,121

8,630,000

2,287

2,284

77,022,550

66,577,860

NA

NA

506

502

$764.8

74,433.00

71,786,000

2,937,000

2,914,000

1,844

1,822

Source: National Retail Federation

71,309,000

68,619,000

2,314,000

3,447,000

2,015

2,152

60,534,500

59,924,000

131,100

46,300

2,275

$2,318

64%

59,117,600

51,394,400

1,833,900

1,670,600

16,000

12,740

of retailers are increasing the number of stores in 2019, are decreasing and

48,090,120

46,119,320

NA

NA

1,963

1,954

42,879,000

42,151,000

1,464,000

1,000,000

1,238

1,514

38, 973,000

35,865,000

3,060,000

2,608,000

4,306

4,070

The TJX Cos.

Framingham, Mass.

2/2/2019 www.tjx.com

trillion

; of that online sales will total between $751.1 billion and

100,904,000

Best Buy Co.

Richfield, Minn.

2/2/2019 www.bestbuy.com

, to between $3.82 trillion and

108,203,000

Ahold Delhaize

Chantilly, Va. 12/31/2018 www.aholddelhaize.com

Total retail sales in 2019 will increase from 3.8% to

billion.

12% 24%

report no change in store counts.

Source: “Retail Renaissance — True Story of Store Openings/ Closings,” from IHL Group.

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available, CHAINSTOREAGE.COM

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19

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79%

of consumers said personalized service from a sales associate is an important factor in determining at which store they choose to shop;

53%

of surveyed retailers indicated personalization is one of their top customer engagement priorities.

Source: “20th Annual POS/ Customer Engagement Benchmark Survey,” from Boston Retail Partners

38%

of retailers reported that they would experiment in 2019 with flexible formats like pop-ups to generate brand awareness and avoid the costs of long-term leases.

Source: “The State of Retailing Online 2019,” conducted by Forrester for the National Retail Federation

16

17

18

19

20

21

22

23

24

25

26

27

28

29

2018 Revenue [000]

2017 Revenue [000]

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

2017 Store Count

36,093,907

34,558,286

2,381,167

2,291,894

1,211

1,167

26,625,000

23,471,000

1,589,500

1,538,960

15,370

14,534

26,000,000

23,000,000

NA

NA

331

340

24,971,000

24,939,000

1,098

1,555

867

852

24,719,500

22,386,800

4,518,300

2,884,700

29,324

27,339

22,823,300

22,245,500

-1,590,800

1,714,300

15,237

14,835

21,639,557

21,528,968

-422,213

943,470

2,550

2,604

22,258,000

18,889,000

NA

NA

6,839

1700+

21,200,000

20,000,000

NA

NA

750

750

19,167,000

19,036,000

801,000

859,000

1,159

1,158

18,411,000

13,394,000

NA

NA

2,000

2,200

17,534,000

14,984,000

1,892,000

1,885,000

4,696

4,620

Grand Rapids, Mich.

2/3/2018 www.meijer.com

17,400,000

16,600,000

NA

NA

242

242

7-Eleven (US and Canada) E Irving, Texas 2/28/19 www.7-eleven.com

17,347,000

16,410,000

NA

NA

11,800

9,700

Publix Super Markets Inc.

Lakeland, Fla. 2/29/2018 www.publix.com

Dollar General Corp.

Goodlettsville, Tenn.

2/2/2019 www.dollargeneral.com

H-E-B E

San Antonio 10/31/2018 www.heb.com

Macy’s Inc.

Cincinnati, Ohio 2/2/19 www.macys.com

Starbucks Corp.

Seattle 10/1/2018 www.starbucks.com

Dollar Tree

Chesapeake, Va. 2/2/2019 www.dollartree.com

Rite Aid Corp.

Camp Hill, Pa. 3/02/2019 www.riteaid.com

Verizon Wireless ER

Basking Ridge, N.J. 12/31/2018 www. verizonwireless.com

Pilot Flying J M

Knoxville, Tenn.

12/31/2018 www.pilotflyingj.com

Kohl’s Corp.

Menomonee Falls, Wis. 2/2/2019 www.kohlscorporation.com

AT&T Wireless ER Dallas 12/31/2018 www.att.com

The Sherwin-Williams Co.

Cleveland 12/31/2018 www.sherwin-williams.com

Meijer E

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available

20

18-25_CSA_10_18_Top100.indd 20

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50%

30

31

32

33

34

35

36

37

38

39

40

41

42

43

2018 Revenue [000]

2017 Revenue [000]

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

2017 Store Count

16,580,000

15,855,000

1,003,000

848,000

3,666

3,594

16,500,000

16,300,000

NA

NA

352

345

16,053,440

14,664,780

NA

NA

1,900

1,750

15,480,000

15,137,000

564,000

437,000

379

366

14,983,541

14,134,732

1,587,457

1,362,753

1,717

1,622

14,070,000

10,404,000

1,324,000

1,043,000

2

2

13,237,000

12,632,000

644,000

983,000

2,943

3,075

The Gap

San Francisco 2/2/2019 www.gap.com

Wakefern Food Corp.

Keasbey, N.J. 9/29/2018 www.shoprite.com

Aldi Inc. E

Batavia, Ill. 12/31/2018 www.aldi.us

Nordstrom

Seattle, Wash.

2/2/2019 www.nordstrom.com

Ross Stores

Dublin, Calif.

2/3/2018 www.rossstores.com

Qurate

West Chester, Pa. 12/31/2018 www.qvc.com

L Brands Inc.

Columbus, Ohio 2/2/2019 www.lb.com

BJ’s Wholesale Club Westborough, Mass.

2/3/2018 www.bjs.com

12,724,454

12,495,995

127,261

50,301

216

215

12,028,797

12,349,301

-137,224

424,858

1,533

1,552

12,019,000

12873000

-255,000

-118,000

864

872

11,690,000

10,950,000

NA

NA

310

300+

Over of adults use click-andcollect and of those,

67%

buy additional items from that retailer when picking up their original order.

The top reasons for using clickand-collect are no delivery fees

(49%)

and receiving purchased items more quickly

(40%.)

Source: “ICSC Click-andCollect Survey,” from the International Council of Shopping Centers.

Bed Bath & Beyond Inc.

Union, N.J. 3/2/2019 www.bedbathandbeyond.com

J.C. Penney Co.

Plano, Texas 2/2/2019 www.jcpenney.com

Menards E

Eau Claire, Wis. 12/31/2018 www.menards.com

Trader Joe’s E

Monrovia, Calif.

6/30/2018 www.traderjoes.com

11,665,680

13,000,000

NA

NA

486

475

11,221,077

10,888,676

1,337,536

1,280,869

6,202

6,029

11,015,000

10,240,000

104,000

181,000

1,364

1,394

AutoZone

Memphis, Tenn.

8/25/2018 www.autozone.com

Office Depot

Boca Raton, Fla. 12/29/2018 www.officedepot.com

Unique dining options

(46%)

and grocery shopping

(42%)

are the top two factors influencing customers to visit an indoor or open-air shopping center more frequently.

Source: JDA

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available CHAINSTOREAGE.COM

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21

10/2/19 12:11 PM

Consumers are most interested in technologies that show whether a product is in stock

(55%)

, helps them compare prices or read reviews

(49%)

, makes it easier to find a product or its location

(47%)

44

45

46

47

47

49

, or try an item before buying it

50

.

51

(38%)

Source: Consumer View, NRF

52

87%

of retailers say taking a stand on social issues is worth the risk;

83%

believe failing to take a stand can negatively affect their bottom line.

Source: “2019 Retail Playbook,” by RetailMeNot.

53

54

55

56

2017 Revenue [000]

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

2017 Store Count

11,000,000

9,709,700

NA

NA

800

783

10,746,000

9,927,000

2,530

-1,017

NA

NA

10,600,000

10,000,000

NA

NA

842

800

10,000,000

10,000,000

NA

NA

245

245

9,598,000

9,380,000

2,888

4,536,000

2,200

2,200

9,580,554

9,373,784

423,847

475,505

5,109

5,183

9,580,000

9,790,000

NA

NA

2,962

2,852

9,536,428

8,977,726

1,324,487

1,133,804

5,219

5,019

9,352,910

8,391,124

203,886

317,903

2,146

2,073

9,200,000

8,700,000

NA

NA

99

97

9,055,800

11,484,200

NA

NA

552

704

8,900,000

5,951,400

NA

NA

474

169

8,700,000

8,600,000

386,000

376,000

4,000

2,700

8,700,000

7,900,000

NA

NA

500

481

Quik Trip M

Tulsa, Okla.

4/30/2018 www.quiktrip.com

eBay Inc.

San Jose, Calif.

12/31/2018 www.ebay.com

Wawa M

Wawa, Pa. 12/31/2018 www.wawa.com

Hy-Vee M

West Des Moines, Iowa 9/30/2018 www.hy-vee.com

T-Mobile

Bellevue, Wash.

12/31/2017 www.t-mobile.com

Advance Auto Parts

Roanoke, Va. 2/29/2018 www.advanceautoparts.com

Good Neighbor Pharmacy E

Chesterbrook, PA 9/30/2018 www.mygnp.com

O’Reilly Automotive Springfield, Mo. 2/31/2018 www.oreillyauto.com

Casey’s General Stores Ankeny, Iowa 4/30/2019 www.caseys.com

Wegmans Food Markets

Rochester, N.Y. 12/31/18 www.wegmans.com

Southeastern Grocers E

Jacksonville, Fla. 12/31/2018 www.bi-lo.com

Giant Eagle Inc. E

Pittsburgh 6/30/2019 www.gianteagle.com

Army & Airforce Exchange Service

Dallas 2/2/2019 www.aafes.com

57

2018 Revenue [000]

Racetrac Petroleum M

Atlanta 12/31/18 www.racetrac.com

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available 22

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58

59

60

61

62

63

64

65

66

67

68

69

70

71

Dick’s Sporting Goods

Coraopolis, Pa. 2/2/2019 www.dickssportinggoods.com

GameStop Corp.

Grapevine, Texas 2/2/2019 www.gamestop.com

Bass Pro Shops E Springfield, Mo. 12/31/2018 www.basspro.com

PetSmart M

Phoenix 1/31/2019 www.petsmart.com

2018 Revenue [000]

2017 Revenue [000]

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

2017 Store Count

8,436,570

8,590,472

319,864

323,445

858

845

8,285,300

9,224,600

-673,000

34,700

5,830

5,947

8,000,000

7,340,000

NA

NA

171

177

8,000,000

8,310,000

NA

NA

1,650

1,466

Mobile e-commerce sales will reach

$203.94

billion

in 2019, making up 34% of all U.S. digital sales.

Source: eMarketer

Foot Locker

New York City 2/2/2019 www.footlocker.com

Tractor Supply Co.

Brentwood, Tenn.

2/29/2018 www.tractorsupply.com

Transform Holdco LLC (formerly

Sears) Hoffman Estates, Ill. 1/28/2019 www.searsholdings.com

IKEA North America E Conshohocken, Pa. 8/31/2018 www.ikea.com

Staples E

Framingham, Mass.

1/28/2019 www.staples.com

Hudson’s Bay Company AX

Toronto, Ontario 2/2/2019 www.hbc.com

Ulta Beauty

Bolingbrook, Ill. 2/2/2019 www.ulta.com

Burlington Coat Factory

Burlington, N.J. 2/2/2019 www.burlingtoncoatfactory.com

Sheetz E

Altoona, Pa. 9/30/2018 www.sheetz.com

Ascena Retail Group Mahwah, N.J. 8/4/2018 www.ascenaretail.com

7,939,000

7,782,000

541,000

284,000

3,221

3,310

7,911,046

7,256,382

532,357

422,599

1,940

1,853

7,720,000

16,702,000

NA

(383,000)

397

1,002

7,679,700

8,278,469

NA

NA

70

56

7,240,000

7,630,000

NA

NA

1,102

1,185

7,133,261

7,219,992

-412,354

442,025

342

483

6,716,615

5,884,506

658,559

555,234

1,174

1,074

6,643,051

6,084,766

414,745

384,852

675

629

6,600,000

5,600,000

NA

NA

588

560

6,578,300

6,649,800

34,300

-1,313,800

4,622

4,807

Digital grocery sales will double during the next two years, reaching

$50

billion

by 2021 before accelerating further to more than

$150

billion

by 2025 and account for 14% of overall grocery sales.

Source: “Online Ordering in Grocery: State of the Industry Benchmark,” from Incisiv and AT&T.

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available CHAINSTOREAGE.COM

18-25_CSA_10_18_Top100.indd 23

SEPTEMBER/OCTOBER 2019

23

10/2/19 12:13 PM

72

Dillard’s

73

Signet Jewelers Ltd.

74

75

85%

of Americans shop in a non-grocery physical retail store during a typical week, and on average, they visit up to three stores.

That average goes up to four stores per week among millennial shoppers and 5.25 stores among Gen Z. Source: RetailMeNot

76

77

78

79

80

81

82

83

84

85

Little Rock, Ark. 2/2/2019 www.dillards.com

Hamilton, Bermuda 2/2/2019 www.signetjewelers.com

2018 Revenue [000]

2017 Revenue [000]

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

6,356,109

6,261,493

170,263

221,324

291

292

6,247,100

6,253,000

-657,400

519,300

3334

3,556

6,027,100

5,880,000

643,400

397,500

1,540

1,432

6,000,000

6,178,798

NA

NA

600

600

5,963,302

5,870,000

NA

NA

1,120

964

5,890,300

5,548,400

NA

NA

126

119

5,717,000

5,388,400

128,200

147,400

5,253

5,121

5,700,000

5,350,000

NA

NA

3,073

2,953

5,671,593

5,292,359

333,684

259,545

625

631

5,271,944

5,361,960

319,545

390,498

1,258

1,371

5,238,105

5,264,362

156,894

189,832

1,401

1,416

5,220,000

4,910,000

NA

NA

883

791

5,207,336

4,664,612

158,536

158,440

313

285

5,200,000

3,394,300

NA

NA

79

79

Tapestry

New York City 7/1/2018 www.coach.com

Cumberland Farms M

Framingham, Mass.

9/30/2018 www.cumberlandfarms.com

2017 Store Count

Sephora US AX Paris 12/31/18 www.lvmh.com

WinCo Foods M

Boise, Idaho 3/31/2019 www.wincofoods.com

Ace Hardware

Oak Brook, Ill. 12/29/2018 www.acehardware.com

AVB Brandsource M Nashville, Tenn.

12/31/2018 www.brandsource.com

Williams-Sonoma

San Francisco 2/3/2019 www.williams-sonoma.com

Michaels Stores Irving, Texas 2/2/2019 www.michaels.com

Big Lots Inc.

Columbus, Ohio 2/2/2019 www.biglots.com

Hobby Lobby E

Oklahoma City, Okla.

12/31/2018 www.hobbylobby.com

Sprouts Farmers Market San Bernardino, Calif.

12/30/2018

Demoulas Supermarkets M

Tewksbury, Mass.

1/2/19 http://www.mydemoulas.net/

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available 24

18-25_CSA_10_18_Top100.indd 24

SEPTEMBER/OCTOBER 2019

CHAINSTOREAGE.COM

10/2/19 12:13 PM

86

87

88

89

90

92

Baltimore 12/30/2018 www.underarmour.com

94

95

96

97

98

99

100

2018 Net Income [000]

2017 Net Income [000]

2018 Store Count

2017 Store Count

5,193,185

4,989,244

-46,302

-48,260

319

295

5,190,000

4,900,000

NA

NA

2,774

2,744

5,190,000

4,720,000

NA

NA

1,043

975

5,000,000

4,900,000

NA

NA

237

238

4,943,900

4,871,800

NA

NA

4,348

4,438

4,900,444

4,705,993

251,131

-531,759

69

82

Marathon Petroleum Corp. ARX

Findlay, Ohio 12/31/2018 www.speedway.com

Discount Tire M

Scottsdale, Ariz.

12/31/2018 www.discounttiredirect.com

Defense Commissary Agency Fort Lee, Va 9/30/2018 www.commissaries.com

Luxottica Group (North America) Port Washington, N.Y. Neiman Marcus

Dallas 7/28/2018 www.neimanmarcus.com

Academy Sports & Outdoors 12/31/18 www.academy.com

93

2017 Revenue [000]

Under Armour

12/31/2018 www.luxottica.com

91

2018 Revenue [000]

4,900,000

4,900,000

NA

NA

250

245

4,792,017

4,279,830

65,581

230,692

227

153

4,773,600

4,500,00

NA

NA

208

214

4,741,772

4,570,565

-112,115

-138,914

326

323

4,442,100

4,169,800

586,400

370,100

321

315

4,380,000

4,254,900

NA

NA

172

171

Save Mart Supermarkets Modesto, Calif.

12/31/2018 www.savemart.com

Smart & Final Stores Commerce, Calif.

12/30/2018 www.smartandfinal.com

Tiffany & Co.

New York City 1/31/2019 www.tiffany.com

Stater Bros. Markets E

San Bernardino, Calif.

9/28/2018 www.staterbros.com

Belk E

Charlotte, N.C. 1/31/2019 www.belk.com

4,380,000

4,290,000

NA

NA

292

294

4,200,000

4,170,000

NA

NA

1,500

1,502

4,092,805

4,002,700

53,874

200

199

Petco M

San Diego 1/31/2019 www.petco.com

Ingles Markets

Black Mountain N.C. 9/30/2018 www.ingles-markets.com

of consumers expect delivery to be free even on orders under $50, up from 68% a year ago;

65%

look up free-shipping thresholds before adding items to their online shopping carts.

Source: Consumer View, NRF

Camping World

Lincolnshire, Ill. 12/31/2018 www.campingworld.com

75%

97,365

Overall retail fraud attempts have doubled year-over-year and tripled since 2017. As a percentage of revenue, fraud cost the average retailer

1.86%

of their annual revenue in 2019, up from

1.47%

in 2016.

Source: “True Cost of Fraud,� from LexisNexis Risk Solutions

Source: Company reports unless otherwise noted E: Estimate, M: Media reports, R: Retail ops only, C: Results in Canadian dollars, NA: Not available CHAINSTOREAGE.COM

18-25_CSA_10_18_Top100.indd 25

SEPTEMBER/OCTOBER 2019

25

10/2/19 12:14 PM

COMMENTARY

Gen Z: A Rising Workforce Gen Zers bring unique perspective to workplace

By Sarah Alter A whole new generation has arrived and is entering the workforce, Gen Z. By the numbers, they make up 23.4% of the U.S. population and a third of the world population. It’s undeniable that they’re going to make a huge impact on the world, the economy and the workplace. Anticipating this, Network of Executive Women, in collaboration with Deloitte, recently released its Generation Z Report. Based on data from more than 1,500 Gen Z respondents [born between January 1995 and December 2002], the report separates the myths about Gen Zers from the facts and takes a deep dive into how members of this generation will impact our workplaces.

Gen Z is totally immersed in technology.

They also watched their parents struggle financially during the most devastating points of the 2008 recession. As they have grown, they have been cognizant of the rising cost of living and higher education.

The findings presented in this report give a three-dimensional and nuanced look at who Gen Zers are and how they think about the world of work. Here are some of the key findings.

• Gen Zers don’t want to be put into a box: One key difference between Gen Zers and past generations is that while they’re willing to sacrifice some level of personal fulfillment for financial stability, they aren’t interested in a job that puts them into a box. They want to expand their skills and actively seek opportunities to do so.

• Gen Zers are diverse … and they care about diversity: Gen Z is the most ethnically and racially diverse generation in history. They are also diverse in their sexual orientation and gender identity and expression. Gen Z prioritizes diversity and look at it as more than just a box to be checked — they expect diversity in marketing, and business, as well.

• Gen Zers care about education: They consider a traditional four-year college education highly important and are quickly becoming the most educated (and indebted) generation in history.

One of the most interesting findings of the report is that Gen Z is the generation most likely to demand a shift in the power dynamic between employees and employers. The report predicts that shrinking talent pools, combined with the need for next generation skills, will put incoming employees into a position to ask for the things they want out of the workplace.

Gen Zers don’t want to start their own businesses or work from home like the millennials who preceded them. What they do want is to lend their skills to companies that will offer them flexibility and the chance to act entrepreneurially in personalized rather than cookie-cutter roles. These young people are attracted to opportunities that will keep them interested while allowing them to continue developing their skills.

Many Gen Zers look to tech as an industry where they can attain these things. Out of the 1,500 surveyed, 51% of respondents ranked tech as a top industry to work in.

Interestingly, only 34% of Gen Z females seek technology roles, compared to 73% of Gen Z males. (This finding should have implications for tech companies aiming to bolster diversity among their ranks.)

Organizations that want to attract young talent are going to need to change their approaches to hiring, developing, and retaining their workforce. They’ll also need to focus on creating diverse and inclusive workplaces and considering their reputation with Gen Zers before they try to

26

26_CSA_10_19_Commentary.indd 26

attract them. They may even need to create latticed career paths with multiple work formats or introduce internal marketplaces to match projects to needed skills sets.

Given the above findings, businesses should be prepared to make changes to create workplaces that attract all kinds of employees and keep them happy, too.

What Can We Learn from Generation Z? I’ve thought a lot about the impact that the members of Gen Z are making on the world of work. As I see it, there is something very admirable about following one’s interests, staying true to one’s beliefs and asking for what one wants in life. Those are the hallmarks of this new generation and I couldn’t be more excited to see what they’ll bring to the workplace.

I can’t help thinking that we, as women, can learn a lot from this generation. There’s something so powerful about being confident in your needs and being brave enough to voice them in your workplace. Asking for what we want could be the key to attaining gender parity. Without speaking truth to power and demanding what we want, drastic change won’t come.

— Sarah Alter is president and CEO of the Network of Executive Women, a learning and leadership community representing nearly 13,000 in 22 regional groups in the United States and Canada. Learn more at newonline.org.

SEPTEMBER/OCTOBER 2019

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10/1/19 9:22 AM

TECH

Retailers Get Educated In Machine Learning Walmart, Home Depot and Joann leveraging ML

By Dan Berthiaume Some well-known chains are gaining early admission to a rapidly growing subset of artificial intelligence: machine learning.

Artificial intelligence (AI) solutions can be programmed to perform “smart” retail tasks, such as chatbots that automatically perform online customer service interactions. AI-based chatbots conduct conversations in a human-like fashion by applying advanced algorithms to data that is entered.

Machine learning (ML) solutions take the AI concept one step further by adding the capability to learn from experience and refine their performance, much in the same way a human being would. To continue the chatbot example, a chatbot solution with ML functionality can independently analyze the results of different interactions and optimize its responses to future customer inquiries, without the need for additional programming.

Here are three real-world examples of how national retailers are leveraging ML in different areas of their enterprises.

Supply Chain Connections According to the “Global Logistics Report 2019,” a recent survey of 533 global supply chain executives from JDA and supply chain logistics provider EFT, the most popular supply chain areas where retail and logistics respondents will apply machine learning solutions are: • Transportation management (62%).

• Supply chain control tower and orchestration (58%).

• Warehouse management (41%).

• Pricing (31%).

Home Depot: The only thing better than accurately detecting when fraud has occurred is determining when it is taking place, or even when it will happen beforehand. The Home Depot is trying to pre-emptively stop fraudulent activity by deploying the Zebra Technologies Savanna prescriptive analytics platform and Profitect sales and exception-based reporting (EBR) module to review its omnichannel sales data.

Prescriptive analytics applies AI and ML to analyze data in near-real-time to uncover ongoing issues and recommend remedial actions. Home Depot is rolling out the technology across its more than 1,900 stores in the US. Initially, the retailer will distribute prescriptive analytics insights within the asset protection department, but plans to share them across other departments in the future as well.

“Our top deliverables in asset protection are to drive value for our customers and shareholders by reducing shrink and mitigating total retail loss,” said Scott Glenn, VP of asset protection, The Home Depot.

Walmart: Walmart is testing an array of innovative technologies at a Neighborhood Market store in Levittown, New York, which the discount titan calls its “Intelligent Retail Lab,” or IRL. Among the leading-edge solutions being piloted at the store is a set of thousands of AI-enabled cameras housed in rows of overhead scaffolding. The cameras use 3D scans to identify the dimensions and characteristics of the store’s 30,000 SKUs. ML algorithms are applied to specific tasks, including monitoring product movement, determining freshness and ripeness of fresh merchandise, shortening checkout line wait times, and even tending to spills on the sales floor.

28

28_CSA_10_19_Tech.indd 28

Weight sensors identify when items are placed on or removed from shelves, and the AI cameras determine stock levels.

ML-enabled data alerts store associates when merchandise needs to be restocked or replaced — ensuring the freshest merchandise is available to customers.

“Technology is changing how our customers shop, how our associates work and how we run our stores,” said Walmart spokesperson Ravi Jariwala.

Joann: Craft and fabric specialty retailer Joann seeks to drive incremental EBITDA growth through ML-enhanced optimization of its promotions. Joann has deployed the Impact Analytics Promo$mart solution to help category managers analyze historical promos, simulate future scenarios through predictive modeling, and generate custom visualizations and reports for continuous, daily campaign and program monitoring to enable effective decision-making.

The heart of the Promo$mart tool is an analytics engine powered by advanced ML models built at an SKU level that drive all the insights. The net promo lift is calculated at an overall basket-level as the models capture affinity, cannibalization, pull forward, halo and other secondary impacts.

The tool allows for simulation of multiple promo types like BOGO, % off, $ off, etc.

“Promo$mart will be the one-stop-shop for all promotion management at Joann and will help us transition from a spreadsheet-based workflow to a cloud-based digital application that provides real-time insights,” said Chris DiTullio, senior VP stores, operations and chief marketing officer, Joann. “This allows us to eliminate 30%-40% of margin-draining promos and to reallocate those dollars to the best performing SKUs and categories.

SEPTEMBER/OCTOBER 2019

CHAINSTOREAGE.COM

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4/3/19 4:56 10/1/19 9:23 PM AM

TECH

Enterprise Platform Upgrade Bob’s Discount Furniture enhances digital experience with 3-D, AR

By Dan Berthiaume Bob’s Discount Furniture is supporting seamless retailing with augmented reality.

Founded in 1991 and based in Manchester, Connecticut, Bob’s operates more than 120 stores in 18 states. As it grew its store count, the retailer found that its e-commerce system had become dated and was not intuitive for customers to use. Bob’s also was unable to provide a consistent omnichannel experience.

“We wanted to get an enterprise platform for our e-commerce site and rock and roll,” said Scott Perry, VP, executive director of digital marketing and omnichannel experience at Bob’s Discount Furniture.

In the second quarter of 2017, Bob’s selected Deloitte Digital as a digital transformation partner and began rolling out new features and enhancements to its e-commerce site, running on an SAP Hybris platform.

“We launched a live chat feature, so customers could interact with an agent how and when they want,” said Perry. “We also rolled out videos for most products, which you can watch on your phone or computer, as well as ratings and reviews. Customers can upload photos of their furniture purchases inside their homes.”

To help save customers time in the crucial process of determining how a new piece of furniture would fit in their personal living space, at the end of 2018, Bob’s introduced an online 3-D room planning tool.

“It’s an immersive 3-D experience available on our desktop site, mobile site and app,” said Perry. “Customers can save 3-D models they create in the app.”

Filling The Digital Gap With Augmented Reality Bob’s also released a natively developed mobile app in late 2018. The app features augmented reality (AR) functionality that lets users visualize how furniture will look in their homes to a degree even beyond that

offered by the 3-D room planner.

“AR solves a major problem in furniture shopping – seeing what a product would look like in your space before visiting our store or website,” stated Perry. Enlisting product visualization specialists Marxent Labs to develop the app for Apple and Android mobile devices, Bob’s enables customers to scan any room of their home using their device.

The app then provides an incredibly realistic simulation of how furniture items would fit. Perry illustrated the process with the example of a customer considering a sofa purchase.

“A sofa appears in your living room to scale,” said Perry. “It sticks to the floor; you can walk around it or behind it and zoom in on the fabric. You can see the weave of the fabric or the grain of the leather and see what it looks like with your carpet, flooring, wallpaper or wall color. The lighting will be different in your home than in the store. You can see if the sofa fits in an area without blocking a doorway or covering a window. You can snap a photo of the AR image in the app and share it via text or social media.”

According to Perry, the app is also becoming a tool for customers to blend the in-store and online shopping experience.

“Inside the store, all product tags have a QR code. The app has QR reader capabilities, so customers can scan the code and view all online reviews, see videos and customer pictures, and add the product to their wish list and share it with a salesperson. We want the app to serve as an in-home and in-store shopping assistant that takes you through the entire journey. When a customer walks into the store, the app sees you’re there and sends you a welcome message. It’s as omnichannel as it gets.”

30

30_CSA_10_19_Tech BobFurniture.indd 30

Bob’s mobile app has an AR feature that lets users visualize how furniture will look in their homes.

Since launching its omnichannel experience with Deloitte Digital, Bob’s has seen a significant increase in online sales. “Customers can schedule their own delivery,” said Perry.

“A majority of orders are sold this way, but customers can also order over the phone with a salesperson.”

In addition, the Bob’s app is in the six figures for downloads and customers engage with thousands of AR experiences every week.

“We will integrate AR into different things we do,” concluded Perry. We want to give customers an experience in the store and online second to none. We want to best in retail, not just the best in furniture retail.

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

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Keeping Stores Busy – with help from e-commerce

By Dan Berthiaume Digital retailing will save, not destroy, brick-andmortar stores.

We all know that reports of the demise of the physical store are premature. But that does not mean all is well in the world of brick-and-mortar retail. E-commerce is growing at a rapid clip while sales at traditional stores move forward at a more leisurely pace.

The natural response of many retailers is to assume the growth of e-commerce comes with a corresponding contraction in brick-andmortar sales. This is not necessarily the case.

Executed correctly, e-commerce (and m-commerce) can actually serve as an enhancer, not cannibalizer, of in-store traffic and revenues.

Here are a few examples of how.

Hunt for treasure — across channels Brick-and-mortar retailing offers shoppers an opportunity to comb the shelves and discover “treasure” lurking in hidden corners. Online search does not lend itself to this type of uncertain reward scenario, which offers a thrill similar to gambling.

However, by seamlessly blending the digital and physical customer experiences, retailers can enhance the treasure-hunting aspect of brick-and-mortar shopping. Customers could purchase items online and then receive emailed or texted clues to locate them hidden in-store, possibly with a bonus prize for finding them within a certain time period.

A virtual net for safety stock Many of the products retailers sell may be seasonal, special offers, or otherwise only available for a short period. While these items may help drive store traffic and make for a more exciting shopping experience, they also can help create a negative customer impression.

A time-starved shopper who takes time from their busy schedule to visit a store for a particular

32_CSA_10_19_DanCol.indd 32

limited-time item, only to discover it is sold out, will not feel the thrill of the hunt. But if that same shopper is able to check availability of and purchase items online for in-store pickup, or could place online orders for out-of-stock goods from the store, it would help ensure everyone can share in the excitement.

And this concept doesn’t only apply to limited-time merchandise. Retailers may also find that some of the regular items they offer in-store are perennial top-sellers with a tendency to sell out. By making it easy for shoppers to digitally purchase those items when they run out, physical retailers can minimize the negative impact of stockouts on the customer experience.

Stash the boring stuff Customers who come to your store looking for a fun, engaging shopping experience probably aren’t stocking up on plastic dinnerware or tube socks.

All this “boring stuff” is perfect online inventory. By moving most or even all of your unexciting staples to your e-commerce site, you can free up valuable shelf space for eyegrabbing special items. Of course, a stockout on an unexciting item can still generate plenty of negative emotion. Retailers who decide to stash the boring stuff online need to invest in robust seamless purchase options, such as scanning an in-store QR code to instantly order items for same-day delivery.

Get social with promotions Retailers as diverse as Amazon and Taco Bell have had success promoting sales from mobile trucks by tweeting hints to their precise locations. There is no reason brick-and-mortar retailers cannot use tweets (or any other social posts) to create similar buzz around in-store promotions.

Furthermore, social media is an ideal channel to get consumers directly involved in driving store traffic. A customer who posts a photo of themselves holding a purchase inside a store could get some type of reward for every shopper who comes in and mentions their user name or special hashtag when buying it. Nothing beats word of mouth, and social media spreads word of mouth at global scale.

Dan Berthiaume dberthiaume@chainstoreage.com SEPTEMBER/OCTOBER 2019 CHAINSTOREAGE.COM

10/2/19 11:41 AM

CHAIN STORE AGE -INJURY 2/3 Vert May Sept_Chain Store 3/8/19 10:07 AM Page 1

Statement of Ownership, Management, and Circulation 1 Publication Title: Chain Store Age 2 Publication Number: 0054-4100 3 Filing Date: 10/1/2019 4 Issue Frequency: Bi-monthly 5 Number of Issues Published Annually: 6 6 Annual Subscription Price: $119 7 Complete Mailing Address of Known Office of Publication: 8550 W Bryn Mawr Suite 300, Chicago, IL. 60631 8 Complete Mailing Address of Headquarters or General Business Office of Publisher: See No. 7 9 Full Names and Complete Mailing Addresses of Publisher, Editor, and Managing Editor: (Publisher) Gary Esposito, Publisher, see No. 7; (Editor) Marianne Wilson, Editor in Chief, One Gateway Center 11-43, Rayomond Plaza West, 16th Floor, Newark, NJ 07102 10 Owner (Full Name and Complete Mailing Address): EnsembleIQ, see No. 7; 11 Known Bondholders, Mortgagees, and Other Security Holders Owning or Holding 1 Percent or More of Total Amount of Bonds, Mortgages, or Other

Securities: None 12 Tax Status (The Purpose, Function, and Nonprofit Status of this Organization and the Exempt Status for Federal Income Tax Purposes): Has Not Changed During Preceding 12 Months 13 Publication Name: Chain Store Age 14 Issue Date for Circulation Data Below: July/August 2019 15 See Chart Below 16 See Chart Below 17 Publication of Statement of Ownership for a Requester Publication is required and will be printed in the September/ October 2019 issue of this publication 18 Signature and Title of Editor, Publisher, Business Manager, or Owner: I certify that all information furnished on this form is true and complete. I understand that anyone who furnishes false or misleading information on this form or who omits material or information requested on the form may be subject to criminal sanctions (including fines and imprisonment) and/or civil sanctions (including civil penalties): Marianne Wilson, Editor. Oct. 1, 2019

Sections 15 and 16

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

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

17,827

18,813

14,066

14,979

0

0

0

0

0 14,066

0 14,979

3,761 0

3,834 0

0

0

0 3,761 17,827 0 17,827 78.9%

0 3,834 18,813 0 18,813 79.6%

7,099

6,163

21,165

21,142

24,926

24,976

84.9%

84.6%

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STORE SPACES

The North Face Sets Up Base Camp Outdoor apparel retailer debuts a store format meant to last

The North Face’s new store concept highlights its heritage.

The North Face is updating its store fleet with a concept that reflects its outdoor ethos and sustainability commitment — and the changing role brick-and-mortar

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plays in the marketplace.

Located in Manhattan’s SoHo neighborhood, the 8,000-sq.ft. outpost is part store, part base camp and part archive. The space is designed as a physical embodiment of the brand’s DNA and will serve as the model for updating the majority of The North Face’s existing locations by the end of 2024. Among the first locations to be updated: stores in Seattle and Cherry Hill, New Jersey.

Through its refreshed retail strategy, the

retailer said it will transform its existing locations into “base camps for exploration” as it looks to create a stronger connection with consumers and evolve The North Face retail environment to a space that feels more like the brand and less like a store.

“Our stores will continue to offer a convenient and seamless shopping experience, but it is no longer the sole mission of the store,” said Mark Parker, VP of direct to consumer, The North Face, a division of VF Outdoor.

“We’re now focused on creating an environment that highlights our heritage and allows consumers to deeply connect with the brand as they prepare for their own exploration, wherever it may be.”

Long-Lasting: The North Face said it set out to design a store as premium, long-lasting and sustainably-built as the products it creates. Similar to the SoHo location, all new

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stores will feature Forest Stewardship Councilcertified reclaimed wood, steel, granite and low VOC paints. The environments will be purposefully designed for longevity and to avoid the need for wasteful refurbishing throughout the years, according to the retailer.

Signs throughout the store — one reads, “If there is no wilderness, we aren’t going to have a business” — spotlight the brand’s sustainability message. Displays point out the recycled materials used to make various clothing items. There is also a donation box where shoppers can drop off footwear and clothing (from any brand), for recycling.

The North Face is named for the coldest, most unforgiving side of the Half Dome mountain in Yosemite National Park, and its heritage and values take center stage in the new concept. The company’s tag line, “Never Stop Exploring,” is prominently displayed just inside the space. So are the brand’s most signature, or “icon,” products, including its Mountain jacket and Himalayan suit.

Scattered throughout the store are glass cases that display products used by some of

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the brand’s sponsored athletes, including the duffel bag used by Conrad Anker who has climbed Mount Everest three times.

Other highlights include a museum-like archive of The North Face athlete expeditions. The atmosphere is enhanced by a fresh scent specially formulated to evoke the smell of the outdoors.

The rear of the main level is dedicated to The North Face’s most signature category: outerwear.

The jackets are displayed around an experiential “campfire” area where shoppers can relax and access resources and recommendations for trips tailored to local adventures. For ease of shopping, customers who are members of the retailer’s loyalty program can pick up (and temporarily store) online orders in lock-

A display highlights the brand’s signature products and tag line.

ers that are located behind the cash wrap.

To help build a sense of community and encourage exploration, the store offers an array of special events, including product launches, speaker series and screenings of its outdoor films.

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STORE SPACES

SPECS Show Update Annual event focused on planning/design, construction and facilities names advisory board

By Deena M. Amato-McCoy Physical retail will be top of mind at Chain Store Age’s annual SPECS Show. The event, now in its 56th year, will be held at the Gaylord Texan in Grapevine (Dallas), Texas, March 15-17, 2020.

The SPECS Show is designed for retail and food-service executives involved in the planning, design, construction, or maintenance of brick-andmortar stores and restaurants nationwide. A hallmark of the event are the educational sessions and workshops, which cover a broad range of topics.

The SPECS Advisory Board plays a pivotal role in planning this critical aspect of the program The board, which functions as a think tank, is comprised of approximately 45 industry leaders from retail companies — both traditional and non-traditional — and key supplier organizations, advises on the educational programming for SPECS 2020. As industry insiders, the board members’ insights and expertise are essential in the creation of sessions that will strongly resonate with attendees. The board will also serve as ambassadors for SPECS. Five SPECS veterans were selected as Executive Advisory Board members. In this role, these members guide their individual teams, and provide overall program direction. The SPECS 2020 executive leaders are: Aaron Ancello, VP, regional facilities manager lead, TD Bank; Craig Hale, AIA NCARB, CDP; Lori Koeppe, operations coordinator, The Buckle; Lisa Smola-Hollo, project manager, growth and development, Ulta Beauty; and Tracy Zaslow, senior director, design and construction, Luxury Brand Holdings.

The SPECS Advisory Board met in Chicago in June to start planning next year’s workshops. The group is currently firming up the agenda.

2020 SPECS Advisory Board Members Steve Bachman, president Retail Contractors Association Robin Baskin Ladner, VP, sales Global Facility Management & Construction Marilyn Brennan, associate director business development American/Interstate Signcrafters Bruce Brock, director of real estate Hungry Howie’s Jayson Burgess, facilities and equipment manager Chick-fil-A Isyol Cabrera, director, design & construction Carvel & Cinnabon Christina Cummins, managing partner CD Maintenance Company David Dillon, senior manager, facility standards Walgreen Co. Tony DiSpirito, director, store preservation Sephora Michael S. Ecke, strategic national account manager Benjamin Moore & Co. Continued on page 38

2020 Executive Advisory Board Members

Lisa Smola-Hollo

Lori Koeppe

Craig Hale

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Aaron Anecello

Tracey Zaslow

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STORE SPACES Richard Elkins, director of construction services Firehouse Subs

Roger Herman, director of national accounts Springwise

Casey Fitzpatrick, construction estimator Wegmans Food Markets

Keith Johnson, director of store design Dollar Tree & Family Dollar Stores Inc.

Todd Franke, architect Walmart Mike Gordon, consultant MG Consulting William (Bill) Graber, VP account management EMCOR Facility Services Scott Griffin, director, store design & construction Stein Mart Tom Haviland, senior VP of national accounts Atlas Steve Hearon, president BrandPoint Services

Katelyn Kazanowski, business development Promotion Technology Group (PTG) Kevin Kilgore, director of development & construction Jim ‘N Nick’s Bar-B-Q Sarah Kovac, director of architecture & engineering Maverik C.B. Kuzlik, president & founder Let’s Pave LLC

Bridget McCormick Lackey, senior manager, architecture & building design J.C. Penney Todd Lutwak, senior VP, business platform & development ServiceChannel Steve McClanahan, director, store maintenance and set up, customer satisfaction AutoZone Evan Mohr, national sales executive Progressive Flooring

Kevin Nolen, director of new store development b8ta James Owens, team lead / architect HFA Doug Pellock, VP, construction and purchasing Marcus Theatres David Shotwell, construction manager Flynn Restaurant Group Jennifer Sorrells, senior manager, integration strategy & execution, real estate T-Mobile

Tom Muck, VP retail strategic accounts Tarkett Monica Munoz, director, asset & facility management DaVita Kidney Care

John Stallman, marketing director Lakeview Construction, Inc.

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BiBi Sukey, senior tenant coordinator Brookfield Properties Retail Joshua Witte, director of store operations, brand maintenance and repair Ross Stores Bret Woodland, project manager H.J. Martin and Son Jason Woods, head of retail development SandboxVR

SPECS Highlights The SPECS educational program, which combines interactive workshops, roundtables and panel presentations, will provide deep dives related to the planning, design, construction and maintenance of brick-and-mortar stores as they evolve and adapt to an omnichannel marketplace. Session content will highlight innovative solutions and strategies that can help retailers deal with current challenges as well as give them an edge on the future.

Here are just a few of the sessions on the agenda: • The Future of Store Design A look at how savvy retailers are embracing more immersive shopping experiences, big data intelligence, and deep operations and systems integration to innovate store designs.

• Ask the FM Experts: Energy Conservation and Waste Management This interactive session offers attendees the opportunity to question facilities management executives about the challenges they are struggling with most.

• Here Come the Robots Discover how leading-edge retailers are using autonomous devices to handle repetitive, time-consuming tasks such as floor scrubbing to improve facilities management and customer service.

• Smart Job Site: Leveraging IoT Solutions Learn how connected devices — from smartphones to wearable sensors — can help companies better manage construction and provide job site benefits, such as improved worker safety, greater visibility and efficiency.

SPECS attendees can also expect a rich and diverse lineup of keynote speakers and Main Stage presentations, enhanced networking receptions (including the annual Women in Retailing event) and Chain Store Age’s annual Breakout Retailer Awards, which honors growing brick-andmortar retail and restaurant concepts.

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STORE SPACES

Avoiding Moisture Mitigation Excess moisture in the concrete slab can result in serious flooring failures

By Curtis Colegrove and Dan DeRenzo To keep up with online shopping and the ever-changing desires of the modern consumer, retailers are spending billions of dollars redesigning their stores. Many retailers have also adopted pop-up shops, constructing temporary spaces to quickly take advantage of new or seasonal trends.

With all of these rapid changes in the retail environment, the approach taken to remodels and new construction of stores is vital.

Flooring in particular is a key component of retail redesign and new construction.

Retailers must deal with multiple challenges when it comes to flooring replacement. First, the timeframe to complete a store remodel is limited and many retailers keep their stores open during redesigns, so the flooring installation needs to be clean and efficient.

In new construction, the timeline is equally constrained due to aggressive deadlines. Second, since retailers need the ability to quickly change layouts and add in pop-up shops or new sections, the flooring needs to adhere to these new demands and be easily modifiable.

Overcoming Time Constraints: In today’s retail construction, contractors want floor installation done overnight. This causes concerns, particularly when the concrete slab is damp and moisture mitigation is needed. If not properly addressed, excess moisture in the concrete slab can result in serious flooring failures. Recent technologies can help speed up the installation of moisture mitigation solutions.

Previously, the approach to moisture mitigation was to use a two-part epoxy to seal the slab surface, creating a substrate that was ready to accept finish flooring materials. While effective, this method requires surface preparation, multiple steps and a long cure time, potentially delaying the project schedule.

An alternative approach is to use a proven moisture mitigation solution, such as

Kovara moisture barriers, prior to installing the finished flooring. Moisture barriers are sheet membranes that serve as a protection layer. They are designed to be laid down above the concrete slab but underneath floor coverings such as carpet, vinyl or ceramic tile. When working on a retail renovation, moisture barriers can also be placed over intact existing flooring to avoid demolishing the old flooring.

Limited timelines put pressure to complete floor installations overnight, which causes concerns when the concrete slab is damp and moisture mitigation is needed.

These sheet membranes offer significant advantages compared to epoxy technologies. Epoxy involves a time-consuming, manual application process, and no other work can take place during installation and the subsequent lengthy curing process.

This halt in a project schedule represents an expenditure of time and money for the retailer and contractors alike. Unlike epoxy, these moisture barriers can be installed in a single night, so the store can be back in business the next morning. This allows a retail store to shut its doors in the evening, renovate its flooring overnight and then return to business the next day.

The other advantage is that retailers have the flexibility to stay open if the flooring is being installed during the day. Unlike epoxy, these moisture barriers can be installed without a specialized crew of trained applicators and do not require the use of noisy shot-blasting. The barrier can be installed in up to half the time compared to epoxy solutions. (The process is simple: Roll onto the surface, tape the seams, cut

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in and that’s it.) This allows stores to stay open with customers walking right by the active installation, without any mess or dust. And the flooring can be installed right around the displays, without unstocking and restocking the shelves.

Modifiable Flooring: Retail establishments are working hard to keep their environments on trend for their customers.

Today, retailers are consistently removing flooring for new décor and design changes as well as to add seasonal sections. And, for stores that utilize short-term leases, they are responsible for restoring the rental space back to its original condition, which includes the finished flooring, once the lease is complete.

A solution to this challenge is to install a moisture barrier under the initial finished flooring. This means all that needs to be done to change the floor to a new design is to pull up the existing tile and the membrane, then replace it with a new layer, followed by the finished flooring. Both can be removed easily, allowing retailers to replace their flooring time and again, without ever needing to disrupt the old flooring underneath.

Moisture barriers can also be installed over existing tile that is smooth, flat and well bonded to the substrate. Next, simply install the new finished flooring over it.

This is extremely useful when stores want to install a pop-up shop or other temporary space. The membranes can also be used as a loose lay underlayment, which is not adhered to the substrate at all, allowing removal as soon as desired, without damage to the permanent flooring. This is particularly useful for flooring that is designed to be there for a very limited time, such as for a specific shopping season.

— Curtis Colegrove and Dan DeRenzo are technical services representatives, GCP Applied Technologies, makers of the Kovara (formerly VersaShield) floor moisture barrier SEPTEMBER/OCTOBER 2019

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STORE SPACES

Reining In Facilities Overspend

By Alexandra Bonanno Although FM budgets vary from one organization to the next, it’s safe to say that a staggering amount of time, resources and manpower go into maintaining multisite businesses of all types and sizes. As a result, it’s vital for leaders to figure out where wasteful expenditures are occurring so they can attempt to salvage and funnel these funds toward more worthwhile projects. Or, they may want to bank the savings and boost their bottom line. Either scenario is a win for the FM department and the company at large.

Here are the top five FM service areas to focus on when assessing your organization’s (over)spending habits:

Improper Asset Management Managing your facilities’ assets requires some pretty tough judgement calls: When the HVAC system breaks down for a fourth time, do you repair it (yet again) or replace it altogether? While new FM equipment typically comes with a hefty price tag, it can be beneficial to replace failing or outdated systems rather than continually paying for repeat repairs.

With the help of a holistic FM platform, you can track your asset history, which gives you precise insights into how much time and resources you spend servicing each piece of equipment at each site you operate.

Mismanaging Budgeted Spend Nothing helps avoid overspending more than a properly planned, well-informed budget. But even the best intentions can lead to flawed budgeting practices, especially when organizations slash their budgets to not to exceed (NTE) limits. Trying to control costs through lowering NTE values seems logical, but it often leads to repeat service visits and higher labor costs.

This issue is compounded when companies budget based on hourly rates rather than work order averages. Establishing benchmarks that dictate how much a given work order will cost can not only save you from exorbitant hourly rates, but it can help you create a more nuanced budget.

For example, if a contractor charges $100 an hour and it takes them one hour and fifteen minutes to replace a broken toilet, the cost of labor will likely be rounded up.

However, with an established benchmark of, say, $75 per toilet replacement, you will not be held accountable for extra time spent on the task and will also be better positioned to budget for these types of repairs in the future.

Funding Maintenance Already Under Warranty Part of understanding your assets is understanding whether or not the equipment is covered under warranty, and if so, for how long. Retailers and facilities professionals frequently pay for repairs, replacement parts or maintenance services that should technically be provided at no cost. Check the terms of all purchases to determine which items may be covered under a warranty agreement. By utilizing FM technology, you can easily track warranties and other asset info — using whatever unique identifier you have selected for each asset — and search for details related to that asset, allowing you to get a jump on which warranties are due to expire and when.

Similarly, hidden or overlooked clauses within your lease agreements could wind up costing you if you’re not careful. Review any active lease agreements to ensure you’re not paying for repairs or services that should technically fall under your landlord’s purview.

Review any active lease agreements to ensure you are not paying for repairs or services that should technically fall under your landlord’s purview.

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Vendor Tech Fees In exchange for using their platform or portal, some FM vendor partners charge a “tech fee” on top of the other FM services or products they provide. From the facilities professional’s perspective, it’s pretty clear that paying extra for the simple use of a web portal isn’t ideal.

However, FM solutions providers that prioritize the client experience choose not to tack on additional fees for the use of their technology. This lightens the facilities manager’s load, and enables them to pocket those dollars they’d otherwise be squandering on unnecessary tech fees.

Misinformed Maintenance Schedule Creating a well-researched and carefully considered maintenance schedule is key to keeping FM costs down. In many cases, that means you should resist the urge to cut corners. For example, it may seem like a good idea to forego monthly floor cleanings for quarterly ones, but in the end, the money you save in the short term ends up costing you in the long term.

Skimping on routine maintenance — or eschewing it altogether — will lead to projects taking longer (and therefore costing more) when they are finally tackled. Facilities that adhere to a tight schedule will fall into a rhythm that allows them to maintain their business, while anticipating future expenditures and allocating funds accordingly.

Projects that fall under the facilities team’s purview are sure to be complex and costly, but also vital to any organization’s ultimate success. By taking stock of your FM budget, schedule and repeat expenses, you can be sure to avoid overspending and hold on to more of your company’s capital.

— Alexandra Bonanno is director of product development and training at Nest Multi-Facility Management SEPTEMBER/OCTOBER 2019

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STORE SPACES Q & A

Full-Service A&E Solutions

HFA, the multi-disciplined and fully integrated architectural and engineering firm, has served retailers for 25 years with a focus on client service and quality — and on designing for the customer experience. CSA recently spoke with Dave Wiglus, CEO, about HFA’s capabilities, its positioning in the market, and how it is using technology to enhance its services.

What sets HFA apart from other firms in the space?

It’s relationships. Ultimately, it’s about our teams building relationships with our clients to help move them move their programs forward. HFA teams are unique in that we are a fully integrated architectural and engineering firm that is licensed in all 50 states and we have successfully completed projects across the country. Our staff of 260 understand our clients’ objectives and work to build effective relationships to help them succeed.

What architecture services does the firm offer?

Our architectural, interior design and landscape architecture team provides the services a retailer or restaurant needs to grow their program or refresh and remodel their existing stores. HFA works with store branding and merchandising to design an effective prototype which we then implement with their site adapt program. Our team provides assessments of existing facilities as well as permit administration services as projects move forward to construction.

What about engineering?

HFA brings full-service engineering to our clients. We provide in-house mechanical, electrical and plumbing, structural and civil engineering, as well as, fire protection, refrigeration and fueling design to support client teams. Utilizing those disciplines, our professionals add value to our clients with commissioning and energy modeling as the industry continues to advance sustainable design practices.

Is there an advantage for your clients in HFA being an integrated A/E firm?

For our clients, getting stores open on time

is critical to the success of their programs and a major factor in meeting that goal is to deliver a quality set of documents on time. HFA structures our architectural and engineering teams around our clients’ programs so that we are fully integrated at the program level to serve our client’s needs and facilitate collaboration among team members. By utilizing REVIT models with both architecture and engineering supported by integrated disciplines and collaborative communications, we can support their program at locations across the country.

jurisdictions to accomplish the project approvals to keep projects moving.

What role does engineering play when it comes to designing or renovating a space?

Building systems play a key role in the building’s performance, our engineers are engaged early-on in the planning and design process with our clients and our team. We are also looking at how the systems can be cost efficient for projects in multiple regions under various climate conditions.

How is HFA using virtual reality and other technologies to help improve retail design and construction programs?

Working with our clients, HFA uses virtual reality as an interactive, design decisionmaking tool rather than a presentation tool. We have found the immersive experience allows our clients to see their design ideas and adjust as needed.

Our design team works with the retailer’s merchandising team to incorporate brand design into the model so the space can be viewed from a customer perspective.

Virtual Reality panoramics can be viewed on mobile phones and are used to communicate to other stakeholders regardless of their location. We also see augmented virtual reality as the next phase of VR use with concepts shown on sites.

Additionally, our technology investments allow us to increase our added value to clients utilizing building information technology (BIM) with live models used by the design team that supports their corporate operations and store life-cycle. The usable data from BIM applications, such as material takeoffs and quantities, are helping clients improve bidding and construction phases.

How do you manage remodels on a national scale?

Each of our clients has remodel and refresh programs underway as the retail landscape continues to evolve and HFA plays an integral role in their success.

Whether we are designing the rebranding or modifications to existing stores or adapting their prototypes to remodels, we implement those design changes to existing stores using our integrated teams in assessing existing facilities and then integrating those documents into our Revit models. Because we have an outstanding team of permit administrators who are part of the program teams, we incorporate the permitting process early on with the local

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How has technology impacted HFA? Technology is a major pillar in the infrastructure of our firm to serve this market on a national basis in a cost-effective delivery of services. With multiple offices and integration of both architecture and engineering, live data is shared within offices and fully integrated platforms. This design and communications technology allows our team members to work effectively from any location.

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SHOP TALK Trending Stores: Puma opened its first-ever North American flagship, on Fifth Avenue in New York City. The technology-infused, two-level 18,000-sq.-ft. store makes a dramatic brand statement, with double-height storefronts spanning across

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160 feet of wraparound frontage. The space is designed to offer an immersive shopping experience, with sports “engagement” zones, a customization studio and digitally connected offerings. … Online home furnishings company Wayfair unveiled its first, full-price permanent location, at Natick Mall, in Natick, Mass. The 3,400-sq.-ft. store features a curated selection of products for in-store purchase as well as items for home delivery. As it does online, Wayfair provides shoppers with the ability to view how furniture would look in a space, using virtual reality headsets. Experts are available for complimentary design consultations. …

Apple reopened its flagship on Fifth Avenue in New York City after a two-and-a-half-year renovation. The transformed store, which is located underground with a street-level public plaza entry, is nearly double the size of the original (32,000 sq. ft.). A higher ceiling and an infusion of natural light have eliminated the basement-like feel of the old space. …

Kroger’s new two-level, urban- format store in downtown Cincinnati is the brand’s first new

Get the latest news on retailers’ expansion and remodeling programs, new store prototypes, green initiatives, facilities updates and more. Find out who’s opening stores and where. CSA StoreSpaces covers retail development and facilities management inside and out.

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downtown location in nearly 50 years. The 52,000-sq.-ft. store features the grocer’s first-ever food hall. The venue houses five Cincinnati eateries, a full-service bar and Kroger’s own restaurant concept, Kitchen 1883 Café and Bar. It can accommodate up to 200 customers, with indoor and outdoor seating. … Consulting giant McKinsey & Co. opened a laboratory-styled retail concept, called Modern Retail Collective, at the nation’s largest shopping mall. The store offers retailers the opportunity to work with McKinsey and Mall of America to test new technologies and “discover what’s possible when multiple technologies, analytics and store operations work together to elevate in-store experiences.” It will be refreshed every three to four months with new retail brands, cutting-edge technologies and experiences designed around a theme. Mall of America is providing the retail space as well as its expertise on store design and buildout … Nordstrom’s inventory-free, service-driven and small-sized retail format, Nordstrom Local, made its Big Apple debut, with an 1,800-sq.-ft. outpost on Manhattan’s Upper East Side (photo, right). The offerings include are online order pick-up, fast returns and tailoring, plus styling consultations, handbag and small leather goods repairs and gift wrapping.

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STORE SPACES

Trending Topics

By Marianne Wilson

GAP INC. PUTS NEW SPIN ON RENEWABLE ENERGY Gap Inc. has entered into one of the largest offsite renewable energy contracts by an apparel retailer to date — one that addresses the specific needs of its leased sites. The retailer signed a 90-megawatt virtual power purchase agreement for the Aurora Wind Project with Enel Green Power North America. The 12-year agreement will enable the company to reach its 2020 goal to reduce absolute Scope 1 and 2 greenhouse gas (GHG) emissions for its owned and operated facilities by 50% compared to 2015.

The vast majority of Gap’s 3,300plus stores worldwide are leased sites located in buildings and malls owned by landlords, limiting the company’s ability to implement onsite renewable energy assets. The agreement with Enel Green allows the retailer to meet its renewable energy goal by aggregating its distributed electricity load in the U.S. and purchasing wind energy equivalent to the energy needs of over 1,500 retail stores in its global real estate portfolio, The retailer also announced it has set a goal to reach 100% renewable energy across its global owned and operated facilities by 2030.

COMPANY UPDATES: MERGERS & ACQUISITIONS identity as of 2020. … Private equity firm Brand implementation solutions compaMosaic Capital Partners acquired Boston nies MC Group and Icon have merged.

Barricade Holdings, provider of modular MC Group’s location in Mentor, Ohio, will construction enclosures and graphic installaserve as the corporate headquarters for the tion services. With the closing of the transaccombined organization; Icon’s headquarters in Rolling Meadows, Illinois, will be retained tion, Boston Barricade, in partnership with Mosaic, has become an employee-owned as a significant base of operations. … Brand company. … Facility maintenance company Point Services, full-service commercial maintenance, repair, refresh and remodel Ferrandino & Son acquired Enterprise Signs, a sign maintenance and installation company, has merged with Legacy Retail company, and BlueSky Paving, an asphalt Services, a digital media and fixture instaland concrete maintenance and installation lation company. The combined companies will operate under the BrandPoint Services company.

TARGET GOES ALL IN Target Corp. is committing to source 100% of all its electricity from renewable sources by 2030. The goal applies to all of Target’s domestic operations — stores, distribution centers and offices. Currently, an estimated 22% of the electricity Target uses to power its business comes from renewable sources. Additionally, the retailer has committed to tracking its progress and will source 60% renewable electricity by 2025.

Target is investing in variety of projects that produce energy through renewable resources, such as wind farms, to achieve its goal. The company also continues to upgrade its facilities to make them more sustainable. It will have rooftop solar panels on 500 of its locations by 2020.

In addition, Target was honored with the Environmental Protection Agency’s 2019 GreenChill Partnership “Best of the Best” Recognition for adopting innovative advanced refrigeration systems in multiple small-format stores. The retailer was cited for using stand-alone refrigerated cases with a very small amount of an environmentally friendlier refrigerant.

WALMART PILOTS PODS Walmart is looking to help solve a big challenge for its employees and customers who also are new moms. The retailer is testing freestanding lactation pods with a high-tech edge in three stores: Williston, Vermont; Gilbert, Arizona; and Bentonville, Arkansas. The pods, from Mamava, are also installed in six Walmart distribution centers across the U.S. The pods are designed to provide women who are breastfeeding with a private and comfortable space to nurse or pump while at work or on the go. They are connected to a smartphone app that allows moms to find the pod, opt into vacancy alerts and unlock the pod.

The app also allows users to adjust the pod’s airflow and lighting, play a selection of relaxing sounds, and even leave a few words of support for the next mom who visits the pod. Walmart is the first U.S. retailer to install the pods, which can be found at such venues as sports stadiums and universities across the nation.

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Cleanliness Still Counts

By Marianne Wilson The basics count when it comes to keeping consumers shopping in physical stores.

A recent report from ServiceChannel revealed that only 20% of shoppers said they have ever left a store because it lacked a specific technology. But 64% have left a store because of its physical appearance or disorganization. Just as revealing, 67% of shoppers said retailers are too focused on making stores overly tech-forward and not focused enough on the basic customer experience.

The study, “The State of Brick and Mortar Retail Report,” found that retailers who have not proactively invested in their physical presence leave themselves prone to disappointing in-store experiences and bad business consequences. The report focused on what causes customers to not return to a retail location, and highlighted the root causes for the 70% of shoppers who have endured a negative experience in the last six months.

A single negative experience such as a dirty bathroom, a broken shelf or a parking lot issue will endanger brand loyalty and repeat purchases, according to the study. Forty percent of shoppers said they will spend less money and time in a store if they had such a negative experience, and 43% said they are more likely to shop at a competitor after a similar negative in-store experience. The report further found that consumers expect good brands to “handle the basics” well, and will spend more money when retailers deliver.

Additional key findings include: • Messy stores contribute heavily to negative experiences.

Issues such as dirty bathrooms, messy floors, cluttered shelves, and or even poor parking lots have an outsized effect, especially with female shoppers, a powerful cohort in retail.

• One bad in-store experience is all it takes. Shoppers really care about consistent experiences, and when brands get it wrong just once, 69% of shoppers are less likely to return. For high-income shoppers (those earning more than $100,000 a year), expectations are even higher, with 76% citing they are less likely to return to a store after a single bad experience.

• Stores should be shoppable before experiential. Basic amenities and the ability to touch, try-on and take home purchases immediately leads to repeat visits. Yet two out of five shoppers encountered empty shelves or struggled with disorganized inventory. And only 19% of consumers seek out retail stores primarily for “non-basic” experiences and perks like food or entertainment.

• Retailers need to handle the basics before exposing consumers to too much “bleeding edge” technology. Four out of five shoppers would rather have a clean store than one that prioritizes tech, and two-thirds of shoppers think retailers are too focused on experimental tech vs. in-store basics. The most important tech for shoppers today are relatively simple capabilities like Wifi and mobile app integration.

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10/2/19 11:50 AM

ON THE LEVEL

The Experienceto-Stuff Ratio Economists at Northwestern, Stanford, and the University of Chicago have a novel method for predicting job growth.

They track the number and size of tax code provisions expected to change, scan reports from the Federal Reserve Bank of Philadelphia’s Survey of Professional Forecasters, and monitor the frequency of key words used in 10 major newspapers. The result is the Economic Policy Uncertainty (EPU) index, and it’s proved quite accurate. In 2009, when the EPU rose 60%, job growth fell 4%. In 2015, the EPU declined nearly 40% and jobs increased by 2%.

Real estate investors check indicators like these to gauge the timing of their sales and purchases. More jobs mean more home and retail purchases. Fewer jobs mean less. In a report called “A New Dawn in Retail,” MetLife Investment Management saw a 7% rise in uncertainty doubling to 15% in 2019 and predicted a job slowdown on the horizon.

MetLife researchers didn’t see this affecting the office and apartment real estate sectors, since the construction pipeline for 2020 and 2021 is running slow. Retail, meanwhile, they proclaimed too hard to call due to the winds of change roiling the sector.

The two big wild cards in retail are the growth of experience-based retailers and the future effect that e-com food sellers might have on grocery-anchored centers.

It’s no secret that a successful retail center of any kind in 2019 — be it an outdoor center or an enclosed mall — must rejigger its mix to include a wide variety of food, beverage, and entertainment-based

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tenants. In 2016, MetLife established a metric called the “experience-to-stuff ratio” that it calculated at 1.3x — that is, for every dollar shoppers spent on merchandise, they spent $1.30 on experiences like eating, bowling, movie-going, drinking,and Legolanding.

Just three years later, the experience-tostuff ratio has climbed to $1.5x, meaning that visitors to retail centers spend 50% more on experiences than they do on merchandise in stores. MetLife credits this trend for a move by retailers toward smaller store sizes. The report noted that that the median store footprint decreased by 1.2% between 2017 and 2018.

One percent doesn’t sound like much, but the decrease is coming from a segment of leading edge of sellers of stuff that are “right-sizing” their footprints by 20% or even 40%.

MetLife researchers wrote that “we believe many goods-based retailers are increasingly using their stores as showrooms, to help boost their online sales.

The result is less need for inventory, and less need for a large format space.”

They counted grocers to be chief among those shrinking their footprints, led by international grocers such as Aldi and Trader Joe’s that have employed technology to trim their inventories by customizing the shelves with products known to sell best in each location.

Online food merchants like Instacart, Amazon, and Peapod now claim just 2.5% of market share, but MetLife predicts that their portion will more than double to 7% in just the next four years.

A well-known brick-and-mortar grocer with one of the biggest store footprints in the land is listening. Sam’s Club has introduced Sam’s Now, a “mobile first” store that takes most of its orders online and has the goods ready for customers to pick up. The average Sam’s Club is 134,000 sq. ft. Sam’s Now stores are under 30,000 sq. ft.

Al Urbanski aurbanski@chainstoreage.com @AlUrbanski (Twitter) SEPTEMBER/OCTOBER 2019 CHAINSTOREAGE.COM

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10/1/19 9:32 AM

REAL ESTATE

Fashion Returns to Philly PREIT and Macerich’s Fashion District is the new center of Center City

BY AL URBANSKI Philadelphians stream into Fashion District’s main atrium on opening day.

Ribbon cutting honors are done

by Mayor Jim Kenney, Convention & Visitors Bureau president Julie Coker, PREIT’s Joe Coradino, and Macerich’s Tom O’Hern.

It’s a project that has been 15 years in the making, involving the purchase of three different properties that had comprised The Gallery at Market East in Center City Philadelphia. When that mall closed in 2015 it left a void in what had historically been the retail heart of a great city.

On Sept. 19, that heart began beating again with the opening of Fashion District, a 900,000-sq.-ft. joint venture of PREIT and Macerich that spans three city blocks adjoining the SEPTA train station and the Pennsylvania Convention Center.

Fashion District brings some 100 stores, restaurants, and entertainment venues — including Center City’s first multi-screen Cineplex — to a nexus that draws more

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than 20 million people a year. Steven Gartner, an executive VP in the Philadelphia office of CBRE, predicts that the new center will quickly achieve a regional presence.

“We are extremely compact in Philadelphia, only three miles wide. We’re not like big sunbelt cities where all the activity is on the outer ring.” Gartner said. “With our tremendous transit system, Philadelphia remains the heart of a region of 6.5 million people, so when something like this is built in Center City, it has a gravitational pull.”

Fashion District is the latest in a trend toward new-age enclosed malls in major cities, such as Brickell City Centre in Miami and The Shops at Hudson Yards in New York. It aims to provide an oasis for high SEPTEMBER/OCTOBER 2019

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volumes of residents, workers, and visitors to shop, dine, and party inside a clean and walkable environment.

• New dining options: Market Eats, a food hall accessible from SEPTA’S Jefferson Station platform includes offerings like Burger Fi, Chick-fil-A, Jamba Juice, Big Gay Ice Cream, Poke World, Oath Pizza, and Tiffany’s Bakery — an age-old institution of the station that continued to operate while Fashion District took shape around it.

• Entertainment: Fashion District’s eight-screen AMC cinema and a 60,000-sq.ft. Round 1 location wrap around an escalator bay to form a distinct and easily accessed entertainment level. More enter-

tainment is in the offing at a two-level City Winery serving up fine wines and live music in a two-level space with a street entrance as well as indoor access.

• Retail, retail, retail! The center is located on Market Street between 8th and 11th streets, a stretch that had been the retail center of the city since founder William Penn designated it as the market area. Fashion district’s strategy is to provide a mix of apparel, entertainment, and lifestyle offerings at a variety of price points to appeal to a wide-ranging customer base. Center City’s first Nike store and a flagship H&M location will be joined by Columbia, Ulta Beauty, Burlington, Hollister, Aeropostale,

The District’s outdoor video displays bring a little Times Square to Center City.

Century 21, and Bella Shoes, among many others.

• Uniquely Philly: A curated collection of local minority and female-owned small businesses that include American Hats, Dolly’s Boutique, South Fellini, and REC Philly, a 10,000-sq.-ft. co-working space for artists and performers.

• Events: A regular schedule of special events commenced on opening day with a live fashion show, a “Taste the District” food sampling, and Zen at the District, with a aromatherapy station, healthy food tips, and an interactive meditation experience.

PREIT CEO and Philadelphia native Joe Coradino expressed high hopes for Fashion District, predicting average sales per square foot of $700 at its opening and then “sky’s the limit” for the future.

“I think it’s going to be our Times Square,” Coradino said. “People are going to celebrate New Years Eve there. It’s where everyone will gather when our teams win the World Series or the Super Bowl.”

Poster art by local artists line the entrance to the center from the SEPTA train station.

Light and airy is the interior theme of America’s newest enclosed mall.

Fashion District boldly proclaims what it aims to be.

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REAL ESTATE

A Tale of Retail in Center City In Philadelphia, one of America’s most densely populated downtowns opens a new chapter in retail.

BY AL URBANSKI

The opening of Fashion District in Philadelphia is an historic event for the city, bringing nearly a million sq. ft. of retail, dining, and entertainment to Market Street. But the retail resurgence in Center City was underway well before the doors opened at the big PREIT-Macerich development.

“One thing many people don’t know about Center City Philadelphia is that it has the largest downtown population of any city in America except New York,” said Michelle Shannon, VP of marketing of the Center City District, which works with Central Philadelphia Development Corporation in increasing the vitality of the area with new businesses and projects.

“The amount of retail that we have had open on Market Street East in the past year has been astounding,” she said.

Millennials aged 20 to 34 make up 46% of Center City’s population. The next largest segment consists of empty-nesters abandoning the suburbs. Both are drawn to Philadelphia’s rich cultural and culinary offerings and, with average household incomes of $120,000, they can afford to indulge in them.

It’s an urban demographic that screams out for modern apartment complexes packed with amenities, one of which is retail.

National Development’s $400 million East Market development on 12th Street between Chestnut and Market, just a stone’s throw from Fashion District, will feature three high-rises when complete. Phase 1, with 561 apartments and 128,000 sq. ft. of office space is open and includes 128,000 sq. ft. of retail GLA inhabited by TJ Maxx, Mom’s Organic Market, Iron Hill Brewery, District Taco, and City Fitness.

MRP bought The Bourse, a Beaux-Artsstyle commodity exchange erected in the 1890s near Independence Hall and spent $40 converting it to a food hall serving up sliders, poke, pasta, pizza, Egyptian and Filipino cuisine, and of course, cheesesteaks.

Lincoln Square, just south of Center City,

National Development’s $400 million East Market project

has 322 luxury rental units, game rooms, a landscaped roof deck with dog run, and 100,000 sq. ft. of street retail. An urbanformat Target store anchors the property and is joined by Sprouts Farmers Market, PetSmart, Chipotle, Starbucks, and Fine Wine & Good Spirits.

Also creating customers for new retail businesses in Philly are a number of new hotels.

The Four Seasons Philadelphia and Pod Philly opened recently, and Ascend Hotels, W Hotels, and Hyatt will all be opening properties in the coming year. More than 1,700 hotel rooms are under construction downtown.

Outside of food and drink, the fastestgrowing retail segments in Philadelphia according to Center City District are: Grocery: Giant, Sprout’s, Whole Foods, Giant Heirloom Markets, Aldi Home and garden: TJ Maxx, CB2, West elm

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Wellness: Sweat Fitness, City Fitness Value/Outlet: Century 21, Burlington, DSW, Nike Factory Store, Levi’s Outlet Clicks to bricks: Bonobos, Warby Parker, MM LaFleur Shannon believes that the arrival of Fashion District and East Market will re-establish Market Street as a destination for locals and tourists alike.

“The large-format video screens on both of those projects bring an energy that has not been present on this street since the Fifties or the Sixties,” said Shannon, who in the Nineties served as the director of marketing at The Gallery mall that stood on the Fashion District site.

“I believe the success of these two projects will have a halo effect on connector streets like 10th, 11th, and 12th, and we’ll see new retail businesses opening there, too,” Shannon said.

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PHILADELPHIA RISING WWW.PHILADELPHIARETAIL.COM

We Film Philly

LOOKING FOR THE PERFECT DEMOGRAPHIC? WITH AVERAGE HOUSEHOLD INCOMES OVER $120,000 CENTER CITY’S PURCHASING POWER CONTINUES TO GROW. POPULATION BY AGE

EDUCATIONAL ATTAINMENT, POPULATION 25+

(0-19) CHILDREN &TEENAGERS CORE CENTER CITY

(20-34) MILLENNIALS

8%

GREATER CENTER CITY

46%

25%

26% 21%

25%

METRO AREA 0%

20%

40%

(55+) EMPTY NESTERS

HIGH SCHOOL OR LESS

25%

CORE CENTER CITY

24%

22%

GREATER CENTER CITY

24%

24%

PHILADELPHIA

27%

METRO AREA

20%

40%

14%

PHILADELPHIA

(35-54) MID-CAREER ADULTS

27% 60%

80%

100%

12%

9%

RESIDENTIAL UNITS AND 1,700 HOTEL ROOMS UNDER CONSTRUCTION IN CENTER CITY, PHILADELPHIA.

31% 55%

40% 0%

ADVANCED DEGREE

43%

14%

20%

40%

30% 24%

13%

24% 60%

21%

8% 14%

80%

100%

Source: US Census Bureau, American Community Survey 2012-2016

Fastest growing TOURISM ARE DRIVING DEMAND FOR MORE THAN 3,000

BACHELOR’S DEGREE

36%

25%

Source: U.S. Census Bureau, American Community Survey 2012 - 2016

INCREASES IN RESIDENTIAL POPULATION AND LEISURE

SOME COLLEGE

More than

MILLENNIAL POPULATION

$7 BILLION IN DEVELOPMENT

of any major U.S. city

investment in Center City

SECOND LARGEST

Since 2013 more than

CENTER CITY’S INCREASING PURCHASING POWER IS DRIVING OVER $1 BILLION IN RETAIL DEMAND.

downtown population in the country

77 NATIONAL RETAILERS have located in Center City

PHILADELPHIA RETAIL MARKETING ALLIANCE (PRMA) Learn why Center City Philadelphia is a perfect fit for your next retail location.

For more information, contact Chris Giuliano at: cgiuliano@centercityphila.org or 215.440.5533

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10/1/19 9:33 AM

REAL ESTATE Lincoln Square on South Broad Street in Philly

Hot Markets

Philadelphia

Retail centers bursting at the seams get some relief from Fashion District.

By Al Urbanski Construction of new residential and office stock in suburban Philadelphia and across the Delaware River in New Jersey have brought new people to the area, but prime retail locations are scarce, and the most popular suburban shopping districts find themselves near capacity. In the first quarter of 2019, Bala Cynwyd posted a retail vacancy rate of 1.7% and King of Prussia was at 2.5%.

Marcus & Millichap predicts that rents will grow by only 2.2% this year, but this follows a 6.9% surge driven by singletenant assets in 2018. Retail real estate investors have been taking advantage of opportunities to renovate historical assets in transitioning neighborhoods such as Northern Liberties, Fishtown, and Olde Kensington.

Meanwhile, the retail stock received a strong infusion this year with the opening of East Market and Fashion District in Center City. PREIT and Macerich’s District added 900,000 sq. ft., while National Development’s residential and office project added 130,000 sq. ft.

“What’s great about this space is that it is new and we live in an old city. Who doesn’t like physically new space?” said Steven Gartner, Executive VP of retail advisory for CBRE & Transaction Services in Philadelphia. “The retail world puts a premium on ceiling height and proper

signage, and these properties have strong signage.”

New multi-use stock is building up south of Center City, as well. The $100 million Lincoln Square project added 322 rental units and 100,000 sq. ft. of street retail, including a Sprouts supermarket built in an historic B&O Railroad train shed.

In all, however, 300,000 fewer square feet of retail were completed in the Philly metro versus last year, according to Marcus & Millichap. The vacancy rate remained flat at 4.8% during the 12 month period concluded in March. The average rent inched up slightly to $17.42 per sq. ft., though in certain suburban areas like Exton-Whitelands and Conshohocken, rents rose by 10%.

New construction is trending higher in the Jersey suburbs. Burlington and Camden counties are all planning sizeable deliveries this year, led by the 83,000-sq.-ft. retail portion of the Shoppes and Residences at Renaissance Square in Marlton.

But Fashion District is the headline retail story in Philadelphia this year and most likely will remain so for some years to come.

“Market street was our traditional shopping district, but then retail started moving to Chestnut and Broad [Streets],” Gartner said. “I predict it will be massively successful in attracting shoppers from throughout Philly and even regionally. It expands the geography of retail in Center City.”

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Philadelphia

By The Numbers

1,400,000 4.5%

sq. ft. retail GLA to be completed in 2019

vacancy rate

$17.42

average asking rent per sq. ft.

2.2%

increase in asking rent over previous year

72,314

Median household income

$4,051

monthly retail purchases per household Source: Marcus & Millichap

Photo: Christopher Giuliani SEPTEMBER/OCTOBER 2019

CHAINSTOREAGE.COM

10/2/19 11:53 AM

IS YOUR SUPERINTENDENT CERTIFIED?

Being a retail superintendent requires a unique set of skills different from other market segments. While all construction superintendents have responsibilities for schedule, productivity, safety, and quality on the project site, the challenges and constraints of the retail environment mean that a special training focus is needed. Superintendents must learn how to think like a retailer and a contractor throughout these projects.

RCA’s Retail Superintendent Training Program addresses this need.

Certified Retail Superintendents have:

Ask your GC if they have a Certified Retail Superintendent on your project.

• At least three years of experience in retail construction • Completed OSHA 30-hour certification • Completed RCA's two-day workshop, which includes in-depth training on retail-focused customer service • Passed the Certified Retail Superintendent exam

Learn more about the program & view a list of participating companies: retailcontractors.org/superintendent-training-program Toll Free: 800-847-5085 | Phone: 703-683-5637 | retailcontractors.org 56_CSA_08_19_RE_HotMark.indd 57

10/1/19 9:34 AM

REAL ESTATE

The Great Centers of North Florida The standard broker’s line about retail square footage in Florida is that it is not overbuilt, but under-demolished.

Yet the Sunshine State is in the middle of a job and population boom that has retailers scrapping over prime locations and new centers going up in several growing towns and regions. North Florida is one of them, so we hit the road to check out hotbeds of retail, both new and not so new.

By Al Urbanski

ST. JOHNS TOWN CENTER – Jacksonville When we called top Florida brokers to ask what to see in Jacksonville, the first words out of all of their mouths were “St. John’s Town Center.”

“In Jacksonville,” said one, “There’s St. Johns Town Center and there’s everyone else.”

In approaching the center after exiting the Jacksonville Beltway, it appeared that every national retail brand flocked to Simon’s North Florida gem, as well. Driving up Town Center Parkway, one is surrounded by outdoor centers on both sides, none of them Simon’s.

The site in St. Johns County was farmland when Simon acquired it from the real-estate rich Skinner family of Jacksonville. Now planted in the 51 acres are 167 stores ranging from posh to practical. One can reserve a parking spot in front of the Apple Store or the Microsoft Store on River City Drive at St. Johns Town Center, one of the few centers in Florida to contain one of each, according to its marketing director, Ashlee Schneider.

Past the koi pond on the tree-lined streets, one can shop Anthropologie, Kendra Scott,

Brooks Brothers Sur La Table, Arhaus, Tiffany, Vineyard Vines, and anchors Nordstrom and Dillard’s.

St. Johns Town Center also houses a more typical outdoor center with big boxes surrounding a parking lot. Brands in this section include Target, Ross Dress for Less, Petsmart, DSW, Staples, Ashley Home

Center, and Old Navy.

Like all top-drawer centers. St. Johns is constantly updating its tenant roster and recently added Lululemon, Pottery Barn, Lego Store, and Louis Vuitton.

“We have 20 surface parking lots to handle the 16 million visitors we get each year,” noted Schneider.

WINTER PARK VILLAGE – Winter Park A Cheesecake Factory is usually a telltale sign that the retail center you’ve entered is a going concern. The Cheesecake Factory on this property, which debuted in this affluent Orlando suburb as Winter Park Mall in 1964, stands out from the pack with a grand entrance supported by tall Romanesque columns. But what truly makes this structure unusual is what’s on the second floor: 58 loft apartments with “internal terraces” in what was the original mall’s Dillard’s department store.

Current owner Casto purchased the mall in 1997, razed it, and set about creating the upscale, town-center style Winter Park Village. Besides Cheesecake, main attractions at the center include a Regal Cinema 20, The Hangry Bison burger bar, REI, J. Jill, Joseph A. Bank, Ulta Beauty, Guitar Center, and Ruth’s Chris Steak House (whose national headquarters are in Winter Park Village’s office building).

Property manager Rachel Slater, who spent most of her retail real estate career in Florida as a leasing agent, was proud to show us some of the new features at the property, including the extension of a main drag called Lee Road right into the middle of the center.

“We’re really happy that our new Publix has one of only two Aprons cooking schools. Also, we just opened the first Bar Louie in the area,” said Slater.

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SEPTEMBER/OCTOBER 2019

CHAINSTOREAGE.COM

10/2/19 11:55 AM

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10/1/19 9:35 AM

REAL ESTATE

CELEBRATION POINTE – Gainesville

BUTLER PLAZA – Gainesville At most of our stops, we like to walk the center with one of the managers. At Butler, however, we quickly accepted property manager Brian Jablonski’s invitation to hop into a golf cart. Butler is more retail city than retail center, comprising nearly every segment of retail over 260-plus acres. Driving into the massive complex off I-75 and Archer Road, you’re sure you’ve entered a multi-developer retail zone, not a single property.

In fact, it all began with residential developments erected by Butler Enterprises founder Clark Butler in the Sixties and Seventies. Next came the Butler Plaza shopping center, a Publix-anchored strip center that blossomed into nearly a million sq. ft. of retail and dining options under the direction of Deborah Butler, Clark’s daughter and the company’s president. She oversaw the creation of Butler North, a bigbox center that opened in 2016 with Walmart, Sam’s Club, Lowe’s, and Dick’s Sporting Goods.

Butler’s store directory reads like a guide to American retail and dining: Dick’s, Sam’s, Target, Ashley, Best Buy, Bonefish Grill, Five Below, Walmart, Lowe’s, P.F.Chang’s, Guitar Center, Lululemon, Ross Dress for Less, The Cheesecake Factory. The list goes on and on. Oh, and there are two Publix’s, a Whole Foods, and a Walmart supercenter.

“People who say retail is dying haven’t been to Butler,” said Jablonski, who arrived in Gainesville nine years ago to manage the Target store at Butler and then managed the Dick’s store in the center before Butler Enterprises hired him to oversee the entire complex.

“We serve a 14-county area and these centers rock,” he said. “People drive in to spend the whole day here.”

Ever striving to be on top of the latest trends in retailing, Butler has opened the first phase of Butler Town Center at Stengel Field, named after an airfield that used to occupy the site. The grand opening of Gainesville’s first Whole Foods there last year drew some 2,000 people and, on the day we visited, the expansive dining area in the store was crammed with college students and local workers.

When all phases are open in 2020, the town center will include 152 luxury apartments, a 13,000-sq.-ft. food hall, and more than 300,000 sq. ft. of dining and upscale retail.

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Directly across I-75 from the Butler complex sits another indicator of Gainesville’s ascendancy as a metropolitan center in North Central Florida. Unlike Butler, this 160-acre mixed-use center that opened its first phase last year is more gathering place than retail mecca — though it did deliver Gainesville its first Bass Pro Shop, no small feat.

Celebration Pointe’s Citywalk section is surrounded by shops, restaurants, bars, a Hotel Indigo, and office space. Central to the success of this project that was 10 years in the making was the signing of Info Tech and SharpSpring as marquee residents of the two office buildings, which are fronted by a “Tech Park” wired with wifi.

An aggressive schedule of weekly events draws locals to the stage at CP’s fire pit area, which is surrounded by retail shops like Nike Factory Store and Tommy Hilfiger, restaurants, and bars. On Thursday’s, Miller’s Ale House plays host to Gator Talk, a syndicated radio show for University of Florida sports fans that features guests like head football coach Dan Mullen. A new dog park next to Bass Pro Shop began presenting “Sporting Dog Days” in September.

“We’re an entertainment-driven center with a retail component,” said Ralph Conti, managing principal of RaCo Real Estate LLC and development partner in Celebration Pointe “Our office component took off very quickly, our residential component is out of the ground, and the Regal Cinema is absolutely killing it.”

A lasting mark that Celebration Pointe has made on the area is a bridge that Alachua County required it to build over I-75, essentially connecting it with Butler to create an even more expansive retail nexus for the people of Gainesville.

“Gainesville has a knowledge-based economy — education, medicine, and not tech,” Conti observed. “Those are the main drivers of jobs and those jobs are all good jobs. Gainesville is on the rise.”

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SAWGRASS VILLAGE – Ponte Vedra Beach It’s possible that Rory McIlroy, this year’s winner of The Players Championship, celebrated at the Aqua Grill in this recently upscaled center. If you bear left instead of right while heading into Sawgrass Village, you could end up at Sawgrass Players Club, the course where the PGA tournament is played each year.

Genesis Real Estate Advisers acquired the 30-year-old center 20 miles south of downtown Jacksonsville in 2010, got it rezoned for mixed use, and proceeded to rebuild it practically from the ground up.

The Publix store was demolished in 2013 and replaced with a 49,000-sq.-ft. Publix prototype. In 2015, three office buildings were razed and replaced with two highprofile restaurants (Aqua Grill and Nona Blue). They now sit across the lake fronting the property, beckoning to passing drivers on Highway A1A. Shops catering to the tastes of denizens

of Ponte Vedra, one of North Florida’s most affluent communities, were installed on Village Main Street. The new roster includes Chico’s, Bluemercury, J. Turner & Co. Furniture, Scout & Molly’s, and Pineapple Post. Convenience retailers CVS and ABC Fine Wine & Spirits join with Publix to provide necessities.

“We spent two to three years redesigning and renovating Sawgrass Village and filling it with restaurants and neighborhood boutiques that fit the local lifestyle,” said Genesis president R. Stephens Tart.

“Average household income in Ponte Vedra, which is a community of about 60,000 people, is $160,000.”

Lakeside Village

Winter Park Village

Lakeland, Florida

Winter Park, Florida

Lakeside Village is a dynamic mixed-use complex that combines retail, hospitality, entertainment and office uses in Lakeland’s upscale Grasslands area.

Celebrating its 20 year anniversary, Winter Park Village is the area’s most exciting destination for upscale shopping, dining and entertainment.

Inspired ideas. Integrated real estate solutions. | www.castoinfo.com | 941.552.2700

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REAL ESTATE

VINELAND POINTE – Orlando Two different brokers with long histories working in Florida told us that this O’Connor Capital center off International Drive is the first groundup construction project to surface in Orlando in recent memory.

Vineland Pointe sits across the street from Simon’s Orlando International Premium Outlets, perhaps the most popular shopping destination in town for tourists. “Luggage shops do well there,” one broker told us.

“Tourists buy big suitcases and load them up with their purchases.”

Vineland provides a counterpoint to luxury on the cheap with a lineup of popular big-box retailers on one side of its parking lot, and a food and entertainment component on the other. It’s Target, Burlington, Marshalls and Ross across from Chipotle, Mod Pizza, and Panda Express.

Coming soon are Cheesecake Factory and Alamo Draft House.

O’Connor’s president of property management Peter Bergner says that Vineland Pointe — in a good location that includes a new Sun Rail stop in the area — fills a void in Orlando that will draw retail and restaurant chains as well as shoppers.

“We’re providing access to an active and growing market to retail brands that are having a hard time finding locations in existing outlets,” Bergner said.

A third phase at Vineland featuring lifestyle tenants is slated to open next year.

THE MALL AT MILLENIA – Orlando When this mall, patterned after The Forbes Company’s Somerset Collection mall in Detroit, first opened in 2002, its location on Conroy Road off of I-4 had little in the way of an identity. Forbes’s luxury retail gem

changed all that; the neighborhood is now known as Millenia.

Pulling into the parking lot early on a Thursday afternoon, we were surprised to see so many cars in the lot. Walking

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in through the main entrance, we were confronted with one reason why. The Orangeries Cafes, which could only be described as a food atrium, was packed with customers to whom it provides bountiful choices (Johnny Rocket’s, Chick-fil-A, Chipotle, California Pizza Kitchen, to name a few), a clean and expansive seating area, and the biggest, nicest, cleanest restrooms I’ve seen in a retail center.

The circular central point of the mall is ringed with stadium-light-like displays presenting video art shows that work in the tenant brands that are the main attractions in this mall. Aside from the fact that this chronometer fan counted more individual brand Swiss watch shops than could be found on Fifth Avenue, the choices included Hermes, Carolina Herrera, Pottery Barn (and Pottery Barn Kids), newby brands like UntuckIt and Warby Parker, Under Armour, Prada, and Jimmy Choo.

Should you visit Millenia, be sure to walk the upper level while peering down at the lower level, whose flooring and furnishings are an art show unto themselves.

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