Tag Archives: retail

Live video feed of a 100 house gingerbread community

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If you are looking for holiday architecture, check out this live feed of a 100 house gingerbread community. Curbed provides a brief description of the community:

Design-y Japanese retailer Muji has taken the whole genre up another notch, this time with a tiny gingerbread town, complete with 100 houses created from 15,000 Muji snacks. There’s a commuter train; hay bales; tiny residents shoveling snow, heading to work, and chatting with neighbors; and even mini video projections. The burg is on display in Toyko until Christmas Day, but the company has also installed a 24-hour live feed for virtual visitors. And yet again, Muji has enlisted children to help build stuff—watch the video and see some close-up shots below.

I checked the live feed last night and it looked like the gingerbread village was asleep. The music is also catchy but I imagine it could get annoying really quickly. I’ll have to check back today to see if the town is more lively today…

Two other notes:

1. Does gingerbread architecture differ across cultures? While this community was put together by a Japanese corporation, it looks like it is made up of fairly traditional and Western architecture.

2. Since this is put together by a retailer, I assume this is supposed to lead me to buy something. Gingerbread house kits? Model train sets?

Illustrating problems with big retail in Naperville: push for more landscaping but offer sales tax rebate

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The response from the city of Naperville to a proposal for a new Walmart in the suburb illustrates some of the issues communities face when approving big retail stores:

Councilman Grant Wehrli said he would like to see the store follow the lead of nearby Costco and Whole Foods by going “above and beyond” the city’s landscaping requirements.

“I would love to have Walmart come in, but I’m concerned about the landscaping. What I would like to see done there is for Walmart to follow the lead of the other two developments, literally across the two streets, and go above and beyond with the landscaping. It’s relatively inexpensive and the benefit to society is massive,” Wehrli said. “If we go to the higher standard of landscaping, we’re not just going to be like the Walmart in Buffalo Grove. It’s going to take that intersection to a higher level.”…

Wal-Mart representative Aaron Matson called the timing of the request “eleventh-hour,” but said they were doing the best they can to address the concerns…

“If we’re not careful with what we’re asking for, they may decide to say, ‘Hey, let’s move right across the street (to Aurora),” Krause said…

Wal-Mart officials still hope to break ground this year on the store that has also been awarded a $1.75 rebate in sales tax revenues over 10 years.

Here is how I interpret this:

1. The community is concerned with how Walmart looks and how it fits in with the nearby Springbrook Forest Preserve. Naperville has its share of ugly retail stretches, notably Ogden Avenue east of Washington Street and Route 59 south of the Burlington Northern tracks. In order to present a nicer image befitting of a wealthier suburb, Walmart needs to add some landscaping and go beyond typical requirements. I am amused by the comparison to Buffalo Grove. According to the Walmart Store Locator, there is no Walmart in Buffalo Grove though there is one very close by in Wheeling. Regardless, Naperville doesn’t want to have any run of the mill Walmart; they want one that reflects Naperville and helps distinguish it on the higher end from other suburbs.

2. Yet, the city may not be able to push the landscaping requests too far because Walmart could still locate their new store in nearby Aurora. In other words, the city has to offer a sales tax rebate because it cannot pass up this revenue source. Naperville officials may be particularly attuned to this because Naperville has lost retail business to Aurora before. In one notable case, the developer for the Fox Valley Mall played Naperville and Aurora against each other in the early 1970s, Naperville was less willing to budge, and the mall was built just across Route 59 in Aurora.

Overall, the community needs the tax money Walmart generates but they also want the store to be presentable. Such are the tensions today regarding big box stores.

Mapping Walmart’s rise

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I’ve seen this before but it is still a cool set of maps: watch Walmart expand across the United States.

Several things I like about this:

1. The flowing data is a nice touch as you can see changes over time. Maps can sometimes appear to be static but merging them into a time-series presentation makes it more dynamic.

2. This is a reminder that Walmart began as a Southern regional retailer who then expanded greatly. Though it is hard to remember a time when Walmarts were not located pretty much everywhere, its rise was not inevitable and it was relatively recent.

3. I remember the first Walmart that opened in our area in the Chicago suburbs. It did seem like an oddity as it had such a range of products and low prices. For example, I bought many of my first CDs there as it was significantly cheaper than the local music stores like Tower Records or Sam Goody. Of course, that initial store looks paltry compared to the more recent editions that feature even more products including a full grocery section.

4. I wonder if this couldn’t be enhanced with some other layers of data. Perhaps color shadings for each state that would show Walmart’s share of the retail market. Or the sales figures for each state. Or the number of Walmart employees per state. For critics, perhaps the number of local businesses that were forced out of business by Walmart (though this would probably be difficult to quantify).

Globalization relies on pallets

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Tom Vanderbilt exposes the hidden workhorse of globalization: the humble pallet.

And yet pallets are arguably as integral to globalization as containers. For an invisible object, they are everywhere: There are said to be billions circulating through global supply chain (2 billion in the United States alone). Some 80 percent of all U.S. commerce is carried on pallets. So widespread is their use that they account for, according to one estimate, more than 46 percent of total U.S. hardwood lumber production.

Companies like Ikea have literally designed products around pallets: Its “Bang” mug, notes Colin White in his book Strategic Management, has had three redesigns, each done not for aesthetics but to ensure that more mugs would fit on a pallet (not to mention in a customer’s cupboard). After the changes, it was possible to fit 2,204 mugs on a pallet, rather than the original 864, which created a 60 percent reduction in shipping costs. There is a whole science of “pallet cube optimization,” a kind of Tetris for packaging; and an associated engineering, filled with analyses of “pallet overhang” (stacking cartons so they hang over the edge of the pallet, resulting in losses of carton strength) and efforts to reduce “pallet gaps” (too much spacing between deckboards). The “pallet loading problem,”—or the question of how to fit the most boxes onto a single pallet—is a common operations research thought exercise…

As USDA Forest Service researchers Gilbert P. Dempsey and David G. Martens noted in a conference paper, two factors led to the real rise of the pallet. The first was the 1937 invention of gas-powered forklift trucks, which “allowed goods to be moved, stacked, and stored with extraordinary speed and versatility.”

The second factor in the rise of the pallet was World War II. Logistics—the “Big ‘L’,” as one history puts it—is the secret story behind any successful military campaign, and pallets played a large role in the extraordinary supply efforts in the world’s first truly global war. As one historian, quoted by Rick Le Blanc in Pallet Enterprise, notes, “the use of the forklift trucks and pallets was the most significant and revolutionary storage development of the war.” Tens of millions of pallets were employed—particularly in the Pacific campaigns, with their elongated supply lines. Looking to improve turnaround times for materials handling, a Navy Supply Corps officer named Norman Cahners—who would go on to found the publishing giant of the same name—invented the “four-way pallet.” This relatively minor refinement, which featured notches cut in the side so that forklifts could pick up pallets from any direction, doubled material-handling productivity per man. If there’s a Silver Star for optimization, it belongs to Cahners.

I will attest to the importance of pallets from my two summers spent working in a book publisher’s warehouse. The second summer, much of my work day consisted of loading boxes onto pallets, driving the forklift with the pallet to an unloading area, and then unloading the boxes so that workers along the line could start the books moving down the line to what would become packed boxes. Without pallets, I have trouble imagining how so many boxes of books could have been moved.

This did raise some other questions for me:

1. How much money can be made manufacturing pallets? Clearly the world needs a lot of pallets…

2. How many pallets become unusable each year and what happens to these pallets?

3. Do people like products that are specifically designed for better packing on a pallet, like Costco’s rectangular milk containers?

h/t Instapundit

When the store with a cult following comes to town

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I recently ran into an article about “16 Brands That Have Fanatical Cult Followings.” This got me thinking about how people want certain stores to move near them. Take this example from this article as several people expressed how much they wanted a Wegmans.

On its website, Wegmans writes that in 2003, almost 5,800 loyal customers wrote “love letters” to the company, with almost half of the letters including pleas to build supermarkets in their communities. One letter included rewritten lyrics to “Yesterday” by the Beatles:

Yesterday,
A Wegmans store, it seemed so far away.
But a new one opened in Dulles today.
Now I will drive
Towards Wegmans’ way.

Wegmans mania reached a new high when a group of musical theatre students in Massachusetts created an entire musical based on the brand. They rewrote popular Broadway songs in praise of the store.

That’s some devotion. And yet, this sort of interest isn’t uncommon. I’ll briefly mention some of the stores that prompt reactions from loyal residents and communities:

-Trader Joe’s is on this list. Multiple friends have told me how much they like this store and one mentioned how while on trips he was prone to finding the Trader Joe’s before leaving to grab things for home.

-I’ve heard similar things about Ikea.

-The article has an interesting conclusion: do some of the bigger brands count as cult favorites?

The infamous Cult of Mac spans far and wide, with a deep obsession with anything and everything Apple. Starbucks blankets America, driving endless droves of coffee-lovers to its baristas. Whole Foods fans swear by the huge supermarket chain’s pesticide free cantaloupes.

Are these followers still a cult if the companies they fawn over have grown into some of the world’s biggest and most successful multinational corporations?

I say yes. Even though these may be big brands, having one of these stores indicates that the community is on the map. This is a bit of strange logic – corporate America wants to be near us! – but it suggests some prestige. Plenty of communities around the United States would have to have a Starbucks. Now only would it bring in revenue and people, having a Starbucks indicates a community has a certain kind of customers (i.e., people with money to spend on coffee) and can also help attract other businesses. Second, I saw that several Facebook friends were very excited about Whole Foods moving to Mishawaka, Indiana. This is a classic case of a cult brand moving in: the South Bend/Mishawaka area is more blue-collar, middle America but having a Whole Foods suggests it has some more sophistication and wealthy residents. Third, Apple stores are less common so perhaps more meaningful: the Apple store in downtown Naperville suggests the place is akin to an upscale shopping mall or thriving big city.

Granted, there is some breaking point to this. Not every place is thrilled to have a Starbucks and some might argue that there are too many already (the company itself suggested this in recent years). In comparison, fewer people are thrilled about a Walmart moving in. There must be some threshold when too many chains are viewed negatively and start impinging on local culture. This threshold likely differs by type of place: places that hope to be “up and coming” likely welcome such stores while wealthier communities with some tradition and enough prestige resist such chains, no matter how cult friendly.

This discussion of cult brands also gets at the heart of Naomi Klein’s arguments in No Logo. Do we want to live in a world where people regularly select and interact with cult brands? Does this kind of devotion detract from more authentic civic life?

Should we care that Apple pays its retail store employees relatively little money?

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The New York Times has a long piece about what Apple pays its retail store workers. Here are some of the details:

About 30,000 of the 43,000 Apple employees in this country work in Apple Stores, as members of the service economy, and many of them earn about $25,000 a year. They work inside the world’s fastest growing industry, for the most valuable company, run by one of the country’s most richly compensated chief executives, Tim Cook. Last year, he received stock grants, which vest over a 10-year period, that at today’s share price would be worth more than $570 million.

And though Apple is unparalleled as a retailer, when it comes to its lowliest workers, the company is a reflection of the technology industry as a whole…

“In the service sector, companies provide a little bit of training and hope their employees leave after a few years,” says Arne L. Kalleberg, a professor of sociology at the University of North Carolina. “Especially now, given the number of college kids willing to work for low wages.”

By the standards of retailing, Apple offers above average pay — well above the minimum wage of $7.25 and better than the Gap, though slightly less than Lululemon, the yoga and athletic apparel chain, where sales staff earn about $12 an hour. The company also offers very good benefits for a retailer, including health care, 401(k) contributions and the chance to buy company stock, as well as Apple products, at a discount…

“It’s interesting to ask why we find it offensive that Wal-Mart pays a single mother $9 an hour, but we don’t find it offensive that Apple pays a young man $12 an hour,” Mr. Osterman said. “For each company, the logic is the same — there is a line of people eager to take the job. In effect, we’re saying that our value judgments depend on the circumstances of the employee, not just supply and demand of the labor market.”

I find two things very interesting from the quoted sections above:

1. This is a reminder that we now live in the era of the service economy. While Apple may generate tremendous profits and have a really high stock price, the majority of its jobs are low wage. This is what our economy looks like today: many jobs are relatively low-trust and low-paying and not everyone will have an opportunity to parlay it into a better, more fulfilling job. One could criticize Apple for such policies but they are hardly the only company doing this and it appears to be effective for generating profits.

2. The difference in perception between Apple and Walmart is indeed intriguing. One company has a better image than the other. Both rely on similar methods as they look for ways to make their products in a more cost effective way (though they aren’t exactly operating in the same price levels in the market – it will be some time before we see Apple computers sold at Walmart), have a number of jobs overseas (or at least their suppliers do), and are looking for ways to maximize their market share. It would be interesting to know if any of the recent reports about Apple employees in China (see this NYT story about Foxconn) has influenced people’s perceptions of Apple as well as altered their consumption habits.

This story got me thinking: what would happen if US Apple retail store workers decided to unionize and demanded better wages (perhaps even a living wage)? Apparently there is an effort underway to unionize the stores:

“People have definitely listed [pay] as a top issue,” said Moll, who started the Apple Retail Workers Union in an attempt to unionize U.S. store workers. “Because of our low wages we often can’t afford to buy the technology that we sell.”

Would Apple strongly fight these efforts and if so, how much negative attention would they receive?

Are strip malls at “the end of the road”?

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One sociologist argues that while strip malls have seen much better days, they can be transformed in ways that they can once again be beneficial:

Strip malls — once anchors of postwar North American suburban neighbourhoods — are doomed, with thousands across Canada and the United States already derelict and eyed by land developers.

But at least one Canadian academic sees value in maintaining the ubiquitous local retailing plazas, and has amassed proposals such as adding community gardens or toboggan slides, or morphing them into giant bee hives or parking lots for food caravans.

“Strip malls were once the economic hubs of new suburbs,” said Rob Shields, a sociology professor at the University of Alberta in Edmonton, who received a government grant to rethink strip malls to benefit communities around them…

More than 11 per cent of strip malls in North America are derelict, representing 27 million square metres of vacant retail space, according to the Washington-based Urban Land Institute.

You can see some ideas generated for “reinventing the strip mall” here. This sounds like it fits into a larger idea, retrofitting, where developers and planners take “failed” projects, such as strip malls or big box stores, and design more sustainable, more urban places.

A few more thoughts:

1. If the strip mall is indeed in inevitable decline, I wonder if anyone is tracking what happens to all of the old strip malls. Is there a common use for them or more frequent uses? Will a majority simply be demolished and replaced with something more profitable?

2. It would also be interesting to hear how suburbanites themselves perceive the decline of strip malls – do they prefer “power centers” or is there something lost when strip malls disappear? Perhaps many won’t rue the loss of strip malls because of their very functional design but there may be more who don’t like the disappearance of some of the businesses, like Radio Shack, that once thrived in strip mall size settings.

3. Are strip malls excellent places for small businesses to start and thrive? Perhaps they are not used in this way but I was trying to think of commercial uses that might be particularly suited to a strip mall.

IKEA neighborhood to be built in London

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IKEA is planning to build a sizeable east London neighborhood in the next few years:

The new district, Strand East, will include 1,200 homes, of which about 40 percent will have three or more bedrooms. Strand East will also have a 350-room Courtyard by Marriott hotel, 480,000 square feet of offices, shops, cafes, restaurants, a school, a nursery, and a health-care facility, allowing residents to accomplish daily errands and needs without having to drive.

The 26-acre neighborhood-in-progress is being designed to include car-free pedestrian zones, courtyards and landscaped grounds, while the planned underground parking means vehicles will be stowed tidily out of sight. The parcel is bordered on two of three sides by waterways, so the community might take on a Venice-like feel, with a water taxi service, a floating cocktail bar, and moorings that will be available for residents’ use…

Although some planning approvals are pending, construction is planned to begin in 2013 — after the Olympics — and is expected to take about five years. However, one section, Dane’s Yard (pictured at top) has been approved. It will feature a 40-meter-high (131-foot) illuminated sculpture in its public square, and a Grayson’s restaurant that will focus on ethically and locally sourced foods. It will also retain renovated versions of some of the historic buildings.

“We will turn it around for sure,” says Müller. “Not being arrogant, but for sure it will be a new hotspot in London.”

This isn’t IKEA’s first time pursuing something like this: the article suggests they have had “similar developments in Poland, the Baltics and Romania.” It is too bad the article doesn’t tell us more about those projects.

The redevelopment project itself doesn’t sound too startling; it sounds like they want to create a new vibrant neighborhood that will take advantage of some of the settings for the site which includes water access. What I assume will catch people’s attention is that the development company is part of IKEA. Does this immediately change the perceptions about the project? Compare this to Celebration, Florida – is it better or worse to have IKEA versus Disney build a neighborhood/town? How involved will IKEA be with the neighborhood after the neighborhood is constructed? What would happen if other retail companies, say Target or Walmart or Costco, decided to build neighborhoods?

I wonder how many jokes could be made about this. Do residents have to assemble their own homes out of a box? Will the design all be Scandinavian minimalism…?

The growing sales share of big box stores

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In recent years, big box stores have increased their share of overall retail sales:

In the past two decades, the share of sales going to the top general merchandise stores has soared from 47 percent annually to 73 percent, according to an analysis of census data by University of Oregon sociologist John Bellamy Foster and University of Illinois at Urbana-Champaign communications professor Robert McChesney…

“In pretty much every category, you’ll see that the biggest guys are a lot bigger today than they were 10 years or 20 years ago,” said Lawrence Ring, business professor at the College of William & Mary in Virginia.

The implications of retail consolidation are varied: lower prices for consumers, but also less energetic hiring of workers and a more streamlined economy overall…

Whatever the big stores are doing has been working: Walmart’s U.S. sales last year were $308 billion. Target’s were $78 billion; Costco’s, $59 billion; Sears, $35 billion; Macy’s, $25 billion; Kohl’s, $18 billion; and J.C. Penney, $18 billion.

More points of evidence in a long-running discussion about the value of big box stores in the United States.

Another way you can tell how powerful these stores are: how many communities will turn them down if a big box store wants to open in the community and provide jobs plus tax revenues?

The Main Streetification of shopping malls

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Perhaps you have seen the advertisements for Small Business Saturday – it will be fascinating to see if this campaign works. While the national retail market is not good overall, this piece suggests that “Main Street [is] making a comeback at the expense of the shopping mall.”

In short, the most successful malls usurped the role of Main Street as the commercial and even cultural center of the communities they served.

Now, however, many shoppers want Main Street back.

Development of new malls has almost completely stopped, with only two being erected in the country since the beginning of 2009, according to the International Council of Shopping Centers.

Outdoor town center concepts, featuring brick sidewalks, streetlights and even public clocks evoking the Main Street of yore, are climbing to a degree that many owners of enclosed malls are considering dramatic makeovers, some including plans to tear off the roof of, or “de-mall” enclosed shopping centers.

I feel this headline is a bit misleading: we’re not talking about a return to traditional downtowns. Rather, it is taking older shopping malls and adding “older” elements, creating a 21st century facsimile of what retailers and Disney want you to think old downtowns were like (but with modern amenities). This isn’t that different than the strategies a lot of older downtowns have pursued in order to become a little more mall-like. Perhaps the real story here is that we are moving toward an amalgamation of shopping mall and downtown where people want to purchase the latest and greatest but really feel like they are in a community setting. Perhaps we could call these new facilities “Main Street malls.” (Though I wonder how these are different from some of the new “lifestyle centers,” particularly the New Urbanist ones.)

I am a little miffed that the article provides little evidence that shoppers really want “Main Street malls.” Are developers not building malls because they are not needed or have the tastes of shoppers changed?