Opinion

Rearranging furniture

BY Dave Wendland

As spring approaches in Wisconsin — finally — it’s always a great time to renew, refresh, and, for me, rearrange some furniture. There’s something about a “winter arrangement” that keeps my living room chairs situated for cozier and more intimate conversations. However, come spring, I look for ways to open up the room a bit more and let in more of the sun’s glow and warmth.

As I considered more “ideas I haven’t thought of” themes for this series, I felt that a spring cleaning within a retail setting can be an important part of keeping store displays fresh and consumers and staff motivated. Rearranging the “furniture” provides the opportunity to enhance the overall layout, refresh fixtures and displays, and update the operation to enhance the shopping experience and bolster sales.

I’ll be the first to admit that adjusting a retail setting merely for the sake of adjustment often falls flat on its face. Not only will a haphazard approach lead to shopper confusion, it may equally frustrate the retail staff. However, walking through the primary entrance of any retail setting with a fresh set of eyes and open-mindedness can lead to tremendous results.

Here are five things I recommend be considered…and they are the same five things I take stock of before rearranging my living room furniture.

Establishing a goal

Before simply moving the furniture in my living space, I consider what I hope to accomplish. Is it to move things away from the walls, incorporate a new focal point piece of art, create conversational areas, etc.? Similar characteristics should be acknowledged when assessing retail space. If the goal is to reduce a claustrophobic feeling, then adjusting inventory levels and the number of fixtures may be the solution. If the goal is to increase visibility across the store, then lower fixtures may help. Perhaps the goal is to allow shoppers easier movement from section to section and across the entire store layout, so angles and shorter gondola runs may meet the objective.

First impressions

Consumers form an impression of a retail space within seven to 10 seconds. (In the case of my living room, it took my daughter about five seconds to say what she liked and what she disliked!) If you want shoppers to feel energized, does your initial appearance match? If you’re hoping that customers pause for a moment or navigate a certain direction, does your store design provide that opportunity?

Shedding some light

For me, I’m a fan of well-lit retail spaces flooded with natural light, where possible. Especially given our aging population and deteriorating eyesight, ensuring adequate lighting has become a necessity. Think back to the last time you rearranged the furniture in one of your rooms. How important was getting the lighting just right? Why is it any different on the retail floor?

Freedom of movement

Fluidity in arranging furniture in my home is important. In other words, I’m ensuring that my guests can easily get to a comfortable chair or couch and not have to hurdle hassocks, coffee tables, or other disrupters. I cannot tell you the number of times that I’ve become frustrated at a retailer who expects their guests to clear/jump/leap displays or vault pommel horse past sale merchandise. Of course, there is a fine line between making the space seem too sparse (however, minimalistic retailing is on the rise) or overcrowding the area to the point where it is like walking through an unkempt closet.

Line of sight

In my open-space concept at home, I want to ensure that if I’m on the opposite side of my kitchen or near the breakfast bar, that I can still maintain eye contact and conversation with my houseguests. Putting up barriers that prevent this line of sight is unthinkable. So, why is it that many of the retailers I visit have displays that are far too high, obscuring the line of sight across the store, or configurations of displays that make it non-conducive to have a conversation?

After a long winter, shoppers are looking for just about anything to brighten their day. Whichever goal you are adjusting your “living space” to achieve, moving, changing, or altering fixtures can invigorate in-store traffic and sales.

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Opinion: Reasons why Walmart may consider Humana merger

BY Neil Saunders

Why would the world’s largest retailer want to buy a health insurance giant? On the surface, there doesn’t seem to be much logic to a deal between Walmart and Humana.

The risks of becoming entangled in the complex U.S. healthcare industry are considerable, especially at a time when Walmart is grappling with the competitive challenges of a rapidly shifting retail market. The hammering out of any agreement — which would be Walmart’s largest ever corporate deal — would, of itself, be an enormous distraction.

Integrating and running the business would be even more challenging. It would mark a significant change of direction for Walmart, which would, overnight, move from being a retailer to a more diversified consumer services company.

Despite the risks, there is some appeal and a bit of logic in a partnership between the two firms.

The U.S. healthcare industry, including insurers, has never been particularly customer-centric. The tendency to overcomplicate options and plans has led to confusion, low satisfaction, and a lack of trust. On top of this poor experience, the industry is riddled with inefficiencies. These things are an anathema to most retailers, particularly so to Walmart.

Therein lies a potential opportunity for Walmart to bring some much-needed focus and discipline to the health insurance industry. However, on its own, this is too vague a notion to act as a catalyst for a deal; other things have to be in play to make the risks of any tie-up worthwhile.

One of these is the potential to use customer data to improve decision making and health outcomes. Like Amazon, which has also sent signals that it wants to disrupt healthcare, Walmart has an in-depth knowledge of customer analytics and behavioral patterns. This can be used to provide more tailored services and plans to end users.

The second area of interest is the linkages between insurance and lifestyles. As the country’s largest retailer and the biggest seller of food, Walmart is in a unique position to help consumers lead healthier lives and make informed decisions about things like diet. As the potential owner of a health insurance firm, it would also be in a position to reward customers for making healthy choices. As much as this raises ethical concerns about privacy, there would be logic in sharing data between the retail and insurance divisions.

The third reason is the other linkages Walmart could make between healthcare and retail. This includes health services in stores, drug and prescription sales, and the sale of all manner of health devices and products. The connections might be somewhat oblique, but Walmart’s reach and its nationwide store coverage mean that there is an opportunity to be exploited.

The fourth reason is the need to diversify for growth. As much as Walmart can grow organically and through retail acquisitions, the company is of such scale that the opportunities for future expansion in the U.S. are limited. Healthcare is a huge market and a significant area of both consumer and corporate expenditure. It is also a major growth sector. Moving onto this turf would give Walmart a whole new arena in which to expand. Something that would be valuable at a time when its retail margins are under pressure.

The final driving force is the likely risk of Amazon getting into health insurance and healthcare. Walmart will have read these reports and will understand the threat of allowing Amazon to get too powerful a grip on the lives of consumers. Although Walmart is unlikely to initiate any deal merely to fend off future competitive risks, Amazon will be at least part of the consideration.

It is far from certain that any deal will come off. There are financial and regulatory hurdles as well as enormous corporate considerations. However, that the deal is even being discussed shows how much both retail and healthcare are changing.

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Newfangled collaboration: Part two

BY Dave Wendland

I first offered ideas on this topic a little over a year ago and remain passionate about the possibility of unlikely bedfellows creating new shopper experiences. With recent news of relationships between Kohl’s and Aldi, and Kroger and Ace, and recent innovations in the grocery channel — Dollar General opened a gorgeous, fresh-focused format in Florida and The Salvation Army opened their own grocery store, DMG (Doing the Most Good), in Detroit – I felt it a great time to revisit the concept.

For purposes of this article, I’ll first examine the pros and cons of these two more recent mash-ups and then offer a few ideas to help fire up your imagination.

For Kohl’s, which frankly has been experimenting in a number of ways, it is yet another example of a department store looking to not only attract new shoppers but increase the appeal to visit more often. If you recall, Kohl’s has been working with Amazon in a limited scope trial to serve as drop-off points for Amazon return efforts. Additionally they have not been bashful about foretelling that the space within their traditional footprint needs to be reengineered to create a better experience. Not sure they will go as far as the two entrance test underway with rival Target, but undoubtedly they are considering all options.

As to the pros, I like the idea of bringing more reasons to the forefront for shoppers to visit Kohl’s department stores and the profiles of Aldi and Kohl’s shoppers may not be that dissimilar. Another advantage is that the real estate choices made by Kohl’s may, in many cases, lend themselves to offering grocery in high demand markets.

The cons are certainly worth noting. Placing the Aldi outside the physical structure does little to nothing to leverage the physical footprint of Kohl’s square footage. Also, the two operations may simply coexist in the same proximity (e.g., parking lot) which does not do much to cross-pollinate shoppers nor build the basket. However, I can’t blame them for staying separate – the grocery experience within Target has definitely not reached its stride and many critics suggest it is a failed model.

Turning my attention to the possibilities of the Kroger and Ace combination, I’m a big fan. In fact, not terribly long ago I had suggested a similar home improvement and drug store alignment to meet the needs of family caregivers modifying their homes for home care.

The pros, in my opinion, far outweigh the cons. Not only does such a partnership build a stronger market basket and take advantage of the frequency of trips to the grocery store, but it also is largely non-competitive. For Ace, it adds store count and visibility – two things that can be achieved without the expense of real estate or less-than-optimal inventory. For Kroger, their shoppers should welcome easy access to everyday hardware products.

On the con side, I do see spatial issues. Hardware merchandising demands substantial space. Furthermore, the size, variety, and logistical aspects will put additional strain on supply chain management. I’d also be curious how other Ace franchisees are feeling about this new “competitor” potentially entering their neighborhood.

Wondering which potential partners may boost your bottom line? Don’t confine yourself to traditional thinking. Who would have imagined meatballs in a furniture store (e.g., IKEA)? Here are several other far-reaching partnerships that I can imagine evolving. Feel free to reach out and offer your ideas – remember the impetus for this blog series was my late father’s mantra, “I have ideas I haven’t even thought of yet.”

  • Could fitness centers introduce mini-electronics’ kiosks with headphones and cases inside (think the vending type machines we see at most every airport)?
  • What might a natural skin and personal care “store within a store” look like inside a massage franchise?
  • Would it be inconceivable to team a mini version of the struggling Toys-R-Us assortment within a drugstore operation?
  • How could a disaster recovery or first aid supply-focused retailer reside in a grocery store?
  • Is it possible that a more experiential offering like a sporting goods retailer (Dick’s or Bass Pro Shops) could show up inside a department store?

Keep dreaming. The possibilities are indeed endless. Retail must continue to evolve and I truly believe we ain’t seen nothin’ yet!


Dave Wendland is vice president, strategic relations and co-owner of Hamacher Resource Group, a company focused on improving results across the retail supply chain located near Milwaukee, Wisconsin. He directs business development, product innovation and marketing communications activities for the company and has been instrumental in positioning HRG among the industry’s foremost thought leaders. You may contact him at (414) 431-5301 or learn more at Hamacher.com.

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