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Thriving in a post-pandemic world will require retailers to retool the way they refresh their portfolio. After a year of uncertainty, customers are different. Stores have to evolve to meet new expectations around convenience, health, and safety. Retailers also need to find ways of appealing to a changed consumer if they have any hope of lifting foot traffic.

The challenge, of course, is doing this cost-effectively. Today, the need to keep project cost down has never been greater. 

On a recent episode of The Rollout by RetailSpaces, Jessica Itchue, AVP of Branch Experience Design for Citizens, Heather Gisewhite, Vice President of Store Planning and Design for Tommy Hilfiger, David Kolkka, Director of Procurement for Capri Holdings (Michael Kors, Jimmy Choo, Versace), and David Mullane, President of Capitol Light, explored the concept of a "smart remodel."  

Whether it’s lowering cost or reimagining the store or adhering to the aggressive sustainability commitments, adopting a smarter approach to store remodels will be vital in this new era.

Focus on the Customer

For Citizens, the process of remodeling existing bank branches has hinged on their customers and what their needs are, Itchue said. 

"I think it is doing what truly makes sense for the customer," she said. "Investing in the key things that transform the experience, and not sweating the small stuff that won't improve the experience." 


Itchue said that when making any remodel decisions they always ask whether the investment will improve the customer experience. If not, Citizens will not pursue it, as a means of only investing in what’s necessary,

As part of that, Citizens looks at the interior and exterior of its branches separately. For the interior, they focus on what that specific branch's customer looks like, what they need when they come in. For the exterior, they focus on the billboard value, and how many eyeballs will be seeing the location. 

"By separating, we can provide the best customer experience," she said. "That's how we design to innovate on meeting customer needs."

Sustainability Focus 

In 2019, PVH — parent company of Tommy Hilfiger — joined the Global Fashion Agenda to help the apparel industry move toward a sustainable future. Since then, the company and Tommy Hilfiger have worked to ensure retail spaces are also designed and operated with sustainability in mind. 

"We have a strong mission now, we want to build back better," Gisewhite said. "A smart remodel is looking at how to design so that things can be repurposed, thinking about the future, sustainability and circularity." 

That concept, circularity, has become a key area of focus for Tommy Hilfiger, Gisewhite said. In meeting the goal of zero waste and energy efficiency by 2030, the company has taken a hard look at its entire footprint, ensuring that how it remodels stores line up with its sustainability focus. 

“It starts with the product, the materials, the course of its life, and how you bring it back around to use it again,” she said of the concept that has helped influence what Gisewhite calls “retrofit lite.” 

A precursor to sustainability, the retrofit lite idea entails preserving existing perimeters, display cases and otherwise repurpose what is already on hand at Tommy Hilfiger stores and its wholesalers.  

Of course, the brand has kept customers in mind as well. Gisewhite said that they follow what customers and the next generation of shoppers want. 

"It's forcing us to take a hard look at how to make changes within our world, materials, finishes, lighting," she said. "It's a journey.”

Building Relationships

At Capri Holdings, which operates brands like Michael Kors and Jimmy Choo, Kolkka said one of the keys to a successful remodel is collaboration and understanding between departments within the company. 

“A smart remodel is going to be sustainable, cost-effective, but keeping the environment and look and feel that's as glamorous as possible," Kolkka said of smart remodels within Capri's brands, which are also part of the fashion pact with an eye on sustainability. 

To achieve the goals set out by the pact and keep remodels cost-effective, Kolkka and his team have worked to build strong relationships with other departments at Capri and with vendors. 

"We've built strong relationships and partnerships to figure out what they want and need and try to get them what their needs are at affordable prices,” he said. 

Still, Kolkka admitted that cost avoidance and cost reductions can be difficult to achieve during the pandemic. 

“Where you can find any cost avoidance is by working with partners and vendors and giving them business in areas they may not have had before. You can also look at overall volume to keep costs down,” he said. 

"We were doing some transitions to LED in existing stores, doing retrofits," he said. "But because capital was being pulled back because of COVID, we have had to come up with innovative solutions." 

Thinking Outside the Box

When Capitol Light noticed that retailers were having to pull back on planned lighting retrofits to address financial challenges presented by COVID-19, they came up with a plan to continue work but receive payment later. 

"If you had money to invest and you were guaranteed 110% ROI would you invest?"

 

In the past, Capitol Light would provide a turnkey retrofit for retailers, providing an investment analysis for lighting and control changes, showing the ROI and how quickly it pays for itself. 

"If you had money to invest and you were guaranteed 110% ROI would you invest?" Mullane asked. "I think everyone would raise their hands." 

But at the moment, many retailers do not have the ability to make many investments that are not COVID related. 

"There are a lot of retailers that don't have expendable capital right now," Mullane said. "What we've come up with is a no cash, no problem scenario." 

Under the program, Capitol Light completes the same process, but no cash is exchanged. 

Instead, for a hypothetical $100,000 remodel that resulted in an estimated $25,000 energy savings each year, Capitol Light would keep a portion of that savings until they get their cost back. 

"It doesn't cost a dime to the retailer, it's a win/win situation, the retailer gets new lighting, and those savings go into your pocket after time," he said. 

To learn more about Capitol Light's shared savings retrofit program go here.

Ashlee Kieler

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Ashlee Kieler is an experienced multimedia journalist based in Iowa. She is passionate about telling stories about healthcare, education, retail and a smorgasbord of other topics.

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