06/01/2008

Two Retail Chains Talk About Product Standardization

Learn how retailers determine the products used in their chain stores

By Linda Monroe

 

For the facilities, design, and construction professionals involved in such proactive retail chains as Burger King, selecting the building materials and finishes that brand their structures can help differentiate them from their competition.

How Does Green Fit In?

As you've undoubtedly heard, for Bentonville, AR-based Wal-Mart Stores Inc., sustainability initiatives are changing the way this retailer will manage its future facilities. Wal-Mart's plan, which is being put to the test in two experimental stores in McKinney, TX, and Aurora, CO, is predominantly based on reducing the energy and natural resources required to operate and maintain stores. At the same time, the company and its project teams are committed to reducing the amount of raw materials needed to construct each facility.

Is this dedication to sustainability the norm among others in the retail industry? According to Stuart D. Kaplan, partner and real estate development practice group leader at New York City-based Blank Rome LLP Counselors at Law, "Retailers are certainly interested in the bottom-line objectives of operating green, particularly as energy prices continue to increase."

Kaplan does a significant amount of leasing work for both office and retail clients. Not surprisingly, he finds the most progressive green development occurring in the office sector, as building tenants seek spaces that address quality-of-life issues. "A lot of what's driving green is the moral issue of good citizenship," he adds.

Noting that, in terms of green compliance, retail developers are becoming more cognizant of the obligations and expectations that can be passed on to tenants, Kaplan offers the following advice: "It's important to know what your local jurisdiction can offer in [terms] of tax incentives, rebates, and even processing advantages for building applications. If you are, in fact, willing to develop green, there are benefits, but every state and local municipality is different."

He likens the green movement to the ADA and its initial enactment. "Building owners were scratching their heads, trying to figure out what the law meant and how to allocate compliance responsibilities between themselves and their end-users," says Kaplan. "Presently, sustainability initiatives are like that, too, and it will take some time for industry players to understand and adapt to this mindset."

Retailers know what it takes to sell products to a discerning public. Perhaps that's why the facilities professionals charged with supporting these businesses are particularly shrewd and savvy when it comes to selecting the building materials and finishes that brand their structures and their companies' reputations, and separate them from the competition.

Take a quick note from two retail chains - Burger King and DSW Inc. - that have had success with product selection. Burger King established a method that ensures product consistency from store to store, and DSW discovered a way to make sure that product consistency doesn't interfere with its desire to be different.

Product Selection at Burger King
As senior director of equipment and facilities purchasing at Restaurant Services Inc. (RSI), a Coral Gables, FL-based organization that handles purchasing negotiations (primarily in the United States) for Burger King, Jay Rodriguez balances product selection with the cost of ownership. "In the QSR [quick-service restaurant] business, equipment must be able to withstand heavy usage, day in and day out," he explains. "Obviously, it's important to find a product that can best do the process it's designed to do, but it must also be reproducible and repeatable. Part of the QSR mission is consistency: Customers expect the same experience [whether they're] in New York or Los Angeles. That can only be achieved if consistency extends to the products and equipment used [in the buildings] as well." And, in QSRs, consistency is everything. Customers support these organizations because, when they spend money there, they know exactly what they're getting. If you lose the consistency that customers have come to know and expect, you'll probably lose their business, too.

Members of Rodriguez's team have been working with a short list of suppliers on a new décor package. This package is comprised of many of the interior elements that make up the Burger King experience (tables, seating, wall treatments, etc). The general look and feel of the spaces are both important elements when maintaining consistency; however, the group must also factor in improvements in food-service technology and Burger King's energy-efficiency goals, among other objectives, when making decisions about products.

Because of the many objectives being considered, the product-approval process doesn't happen swiftly or easily for Burger King. "There's a lot of lab and field testing conducted, both by the engineering folks at Burger King and the franchisees in the marketplace with a long-term interest in their investment. There's a pretty extensive timeline associated with these decisions," says Rodriguez

National contracts with preferred vendors would seem to be the easy answer, but Rodriguez says that's just not the case. "The problem with a lot of national contracts is that very few of them are truly national; they tend to be, by default, regional," he explains.

Rodriquez advises facilities professionals to do their homework when considering new products and vendor partners. "Suppliers should be able to provide you with return-on-investment information, as well as [explain] how a particular product can bring your organization the best value, both financially and operationally," he says. "There's nothing wrong with casting a broad net and gathering as much analysis and information on companies [as possible] to make the right decision. Elements of short- and long-term ownership are complex," he says. "It's crucial to align yourself with suppliers and companies that talk the talk and walk the walk."

DSW Creates Distinctive Experiences
The needs of the quick-service restaurant business may seem unique, but these deliberate, well-planned design and procurement practices extend to a variety of other retail venues, too. While consistency remains key to the success of most chains, retailers also recognize the importance of differentiating themselves from their competition.

For DSW Inc., headquartered in Columbus, OH, a combination of selection, convenience, and value - housed in a distinctive, yet consistent, store setting - provides consumers with personalized shopping experiences that fullfill a broad range of style and fashion desires. This retail chain certainly does that with its product offerings (many of its 270 stores hold more than 30,000 pairs of shoes), but it also follows through with a store design that's both standard and flexible. Because its locations range from lifestyle centers to power centers to malls, each exterior is adapted to its site. Once inside, however, the consistent branding experience begins. "We have a standard store design that fits perfectly in a 100- by 150-foot box," says Dave Crawford, vice president of store planning and construction at DSW, who oversees new construction and renovation activities for the company, as well as the maintenance of all existing facilities. "The only time we modify or make significant changes to that standard design is when we explore odd-shaped spaces and must make the design fit."

DSW's marketing group drives the brand, which never stops evolving. It's Crawford's responsibility to translate these creative outlines into practical applications. "Fortunately, I report to a very conscientious group; that makes my job - to initiate change, but retain consistency - much, much easier," he says, noting that the company has launched a new design during the past 18 months. This year, as the rollout continues in new store construction and several major renovation projects, his group is fine-tuning - without compromising - the standard design to improve on its efficiency and return on investment.

"We analyze our fleet to figure out the right places to spend shareholders' money," Crawford explains, "and these decisions are generally based on our expectations for a resulting ‘lift' in sales volume. Sometimes, it is reflected in individual store locations. Other times, we might work an entire market so that our customer, who may shop in two or three of our stores, gets the same shopping experience."

Crawford is an advocate of developing good relationships with preferred construction vendors. "That definitely helps from branding and consistency standpoints, as well as changing things on the fly, which is really important in retail," he notes. "In addition, we typically get a quantity discount, so there's a positive dollars-and-cents benefit. We try to bid out as much as we can once a year and break our orders down into two or three blankets per year with any one vendor to limit our exposure."

The only constant in retail is that it's constantly evolving, so facilities professionals in this marketplace will continue to be tasked to thoughtfully and fruitfully manage and implement change. In order to balance consumer expectations with company objectives, remember: Buy well to sell better.

Linda K. Monroe (linda.monroe@buildings.com) is editorial director at Buildings magazine.

 


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Visit our website today to learn about the design flexibility of a Morton building and the endless possibilities of partnering with our designBUILD team.


Wood construction is both cost and energy efficient. Check out Morton Buildings and our designBUILD team online today to discover all the benefits of post-frame construction.


When choosing a metal-clad building for your next construction project, consider Morton Buildings, Inc., and their designBUILD team, we’ll make your dream a reality.

We Can Help You Reduce Energy by 30%

Our mission is to help our customers manage their buildings' energy costs, improve reliability, and enhance performance while having a positive impact on the environment.
CLICK HERE to find out how.

Bluebeam® Revu® simplifies digital facilities document management from design review to leveraging as-builts, maintenance manuals and O&Ms submittals.

 


 
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