Practically Speaking about Retail FM

Retail is in Good Hands

FM Business Practices and Strategies

While visiting EuroShop last month in Dusseldorf, Germany, it was striking to me how big the global retail industry really is.  PRSM Association members were among the 109,000 attendees from 110 nations at the trade fair.  EuroShop is the largest retail trade fair in the world featuring the upcoming products available to the global retail market.  Not only were there seasoned professionals, but there were tons of young adults from universities throughout Europe waiting for their turn in the retail industry.

Traditionally focused on design and construction, this year’s fair also featured many new features relevant to facilities maintenance and sourcing professionals who have the responsibility for maintaining the unique shop fitting and design elements of retail stores. Lighting technology was once again a big  draw for the attendees with LED lighting dominating the scene.  Unique flooring options were also prevalent and viable alternatives for high traffic retail environments.  

While at EuroShop, PRSM hosted an International Retail Exchange for approximately 20 European and U.S. Retail facilities professionals.  During the morning session, they had the opportunity to discuss current challenges of facilitating maintenance requests across country lines and finding qualified vendors to service their stores.  Retailers attending were from Abercrombie & Fitch, Apple, Bose, Fossil, Gap, and Tumi. 

I left Dusseldorf with a renewed respect for what retail professionals bring to the industry.  Their creativity, knowledge, and ingenuity make this a remarkable industry.   Follow this link for more information on EuroShop 2014.   

 


Hazardous Waste Problems Outlined, Solutions Offered in these New PRSM Resources

Codes & Regulations, Environmental, Health, and Safety, FM Business Practices and Strategies, Landscaping and Grounds, Sustainability, Waste and Recycling

In this climate of increased scrutiny of everything that might end up in the dumpsters behind your stores, FMs need to be well-versed in the Federal Resource Conservation and Recovery Act (RCRA), the Federal Insecticide, Fungicide and Rodenticide Act (FIFRA) and the Clean Water Act (CWA).

A recently released PRSM white paper, “HAZARDS IN STORE: A Waste Handling Primer for Retailers,” written by authors from PSC Environmental Services, discusses current waste management regulations and activities, as they apply to retailers, including some notable recent enforcement actions, while providing guidance on what retailers can do to make sure they comply with these complex legal obligations.

The paper provides a baseline of understanding of the issues and answers these and other questions:

  • Do retailers actually get in trouble under these laws?
  • What do you mean by “hazardous waste”?
  • I do handle hazardous waste. What now?
  • What could happen if I don’t comply with RCRA?
  • I’ll comply with RCRA. Is that it?
  • What programs do I need to put in place?

Click here to access the white paper at www.prsm.com. For additional reading and assistance click here for the

Waste & Recycling Request for Proposal (RFP) Template and supporting documents: Download the Green Sourcing Survey Template for Retail FMs here

These documents are the latest components of PRSM Association’s online Sustainability Resource Center, (SRC) providing strategic and tactical information, tools and templates across a number of recognized environmental focus areas.

 


Designing and Maintaining Stores in Europe: be prepared for anything when going global

Budgets, Finance and Metrics, PRSM, Real Estate, Landlord, and Tenant, Technology

Content Contributed by Nick Gustav, PRSM Magazine

Very little strikes more fear into the hearts of retail organizations than these three words … “we’re going global!” Marketing will obsess over the product’s viability to the foreign consumer; finance will fret over the cost of doing business in vastly different marketplaces and while the best strategists and operations people will be focused on expansion, who will prevent erosion of the core domestic market?

If the global train hasn’t arrived at your particular station, yet, it’s likely to be there soon, according to industry experts speaking at the National Retail Federation’s 2014 Big Show in New York, earlier this month. Industry expert Alison Kenney Paul, Vice Chairman and U.S. Retail and Distribution Leader, Deloitte LLP, and Jim Fielding CEO of PRSM Member Claire's Inc. both shared stories of how the industry is faring in markets outside the U.S. borders.

“Globalization is one of the most important trends facing retail and it’s not one of the easiest to manage. The challenges and setbacks are many,” Paul outlined.

  • Do you have the operational capability to expand into new markets and maintain market share across your core domestic?
  • Will your brand resonate in new markets without major retooling of message or product specifications?
  • Will expansion increase shareholder value?

Although some best practices have emerged, Paul stressed, the U.S. operational model (including facilities management) is not a “drag and drop” over into new markets. One tried-and-true approach begins with expansion into complimentary markets, such as Canada and the UK, where cultural differences are likely to be more manageable for U.S. brands.

When PRSM Members gathered in Basel, Switzerland, for the 2013 International Forum, facilities managers shared a great deal about their challenges going global. See the full report in the November/December PRSM Magazine, online.

Fielding talked at length about his company’s global expansion, which he said began some 20 years ago. “We’re global and it’s a competitive advantage … we’ve had successes and have made mistakes,” but our overarching model is to “keep it simple,” he said, adding, do your research and adapt to the environment.

The European store footprint, Fielding explained is smaller than in the U.S. Typically Claire’s “stores are 30 percent smaller internationally than in the U.S.” he said, reflecting issues with space, cost and availability. “Expect the unexpected,” he concluded, recommending his fellow retailers remain adaptable on all levels, especially when it comes to store design.

 


Key Takeaways from Industry Overview Benchmarking Report

Budgets, Finance and Metrics, FM Business Practices and Strategies, Refrigeration

When the Benchmarking team assembled questions for its FM Industry Overview Benchmarking Report, the goal was to help the industry better understand how facilities departments are managed and organized. Respondents met that goal, while providing a wealth of additional knowledge. See below some of the key takeaways: 

-       Retailers spend an average of $5.02 per square foot on store maintenance.

-       The maintenance cost per square foot increases with store age, in cycles, peaking at 20 year intervals.

-       HVAC is the biggest expense for 43 percent of respondents. 

Additionally, retail FMs reported that they are increasingly taking on new responsibilities, fending for corporate offices, distribution centers and warehouses and inside their organizations are more closely aligned with their construction and property development departments. 

Visit the PRSM Association Benchmarking Resources for more information on this survey. 

Methodology: Approximately 40 percent of PRSM Association retail members participated in the survey. Results are representative of PRSM Association retail membership at a 95 percent confidence level and a 7.5 percent margin of error.

PRSM Association benchmarking for the retail industry was initiated in 2011 to provide facilities managers with data and insight into many aspects of store maintenance. Industry surveys have provided valuable metrics on retail HVAC systems, janitorial products and services and other topics. Future reports will focus on other key areas of retail FM. Retailers are encouraged to register to receive invitations to participate in future surveys to provide the industry with valuable and actionable data.   


Two New PRSM Association Tools Aid Your Efforts Towards More Sustainable Operations

The PRSM Waste & Recycling Request for Proposal (RFP) Template includes three documents to help retail FMs generate a comprehensive, working process to engage with and solicit responses from prospective vendors for waste and recycling services.

The Waste & Recycling kit consists of customizable documents to guide retailers through the process of issuing a request for proposal, separating the different costs associated with a waste recycling program as well as organizing and comparing bidder responses.
 
The PRSM Green Sourcing Survey Template for Retail FMs was created to help retailers assess whether a product or vendor is able to support their sustainability initiatives. The survey is designed to retrieve information in a number of areas, including:
  • Vendor Corporate Policy: allows the vendor to explain their company’s own goals for sustainability.
  • Measurement and Documentation Support: can the vendor support the retailer’s need for data collection and analysis?
  • Sustainable Product Attributes: specific to products, not services, this section helps retailers understand what standards are upheld by various manufacturers whose products are used in the upkeep of their stores. 
These documents were created with support from the PRSM Association Sustainability Council.  Download the Waste & Recycling Request for Proposal (RFP) Template and supporting documents here. Download the Green Sourcing Survey Template for Retail FMs here. These documents are the latest components of PRSM Association’s online Sustainability Resource Center, (SRC) providing strategic and tactical information, tools and templates across a number of recognized environmental focus areas.

 


Compare Your Vendor Payment and Invoicing Practices

To assist the industry with an additional benchmarking mechanism to complement our in-depth reports, the Association has developed a “snapshot” program to provide members with a rapid-response to immediate informational needs.

Recently, PRSM received a great response to a brief survey regarding vendor payment and invoicing practices. Survey results showed that approximately half of the retailers - fifty-one percent - use Net-30 as their primary vendor payment term, the time during which they will pay for services performed. Seventy-eight percent of vendors, however, do not penalize their retailer clients for payments made when they are past due. 

Another interesting result we found was that forty-five percent of the retailers who responded use 30-Days as their invoice term, the time during which they require an invoice to be issued for services performed. Many retailers revealed they can choose to forfeit the payment of an invoice if the invoice is not received in the agreed upon time period, as per their service contract.

Additionally, we found that large box retailers generally use longer payment terms than smaller box retailers - between five and seven percent of the larger box retailers use Net-60 or longer payment terms versus only two percent of the extra-small box retailers.

To learn more PRSM Members can download the full results. Additionally, if you would like to work with our Industry Programs team on your own Benchmarking needs, or if you have additional questions regarding this survey, contact Monica Munoz, Director of Industry Programs (mmunoz@prsm.com) or Amruta Vantipalli, Industry Programs Manager at avantipalli@prsm.com).

 


International Best Practices Shared at Forum in Switzerland

Even though the vast majority of us could not attend the Association’s International Retail Exchange, held in Basel, Switzerland, and hosted by PRSM Member Fossil Group Europe GmbH, Inc., we can all benefit from a few lessons shared during the group’s open discussion.

Several retailers in attendance – the group consisted of FM professionals from Apple, Abercrombie & Fitch, Bose Corp., Fossil Group Europe GmbH, Dollar Financial Group, Inc., Gap, Guess? Inc., Triumph International, and Tumi – presented case studies, detailing specific problems they were solving across their network of stores in Europe.

Case Study 1 – O­rganizing general maintenance issues across entire store network:

  1. This fashion retailer was experiencing a high call volume for general maintenance requests to resolve a wide variety of issues, across its 160-store European footprint. They contracted with a multi-purpose vendor to visits to all stores and fix a wide variety of problems, from issues to  from doors, shelving, light bulb replacement, HVAC, flooring and other complications to store appearance.
  2. The program’s success resulted in a reduction in repair orders in addition to a large amount of store data gathered in the process. This data is now being used to help the FM team lower costs and get better organized around its lighting issues and other needs. 

 Case Study 2 – Developing the right vendor service model: Continue with the outsourced team or bring the operation back in-house?

  1. This fashion retailer it was dissatisfied with its third-party, outsourced service provider for maintenance needs across its numerous UK stores:

a.    Poor visibility and lack of control.

b.    Inflexible agreements.

c.    Excessive costs.

  1. As a result, the retailer initiated a program to bring facilities management/administration back “in-house” to:

a.    Gain transparency of costs and services.

b.    Increase flexibility – using specialists vs. a single vendor.

c.    Align suppliers with business goals and needs.

d.    Improve rapport with store personnel.

  1. After nine months the retailer reported better relationships between FM operations and store management, appropriate expertise and knowledge levels with its vendors, more accountability across the entire value chain and an estimated 20 percent future costs savings.

“Thanks to our ongoing member interaction, members are learning and sharing more of their FM experiences leading us to a greater understanding of the commonalities  and differencesacross the global landscape. With the exception of country-specific requirements, facilities professionals globally are dealing with many of the same issues and are deploying many of the same solutions,” said Patricia Dameron, Executive Director, PRSM Association.

PRSM Association’s International Retail Exchange events occur approximately twice a year and are hosted by a European Retail Member. To learn more and participate contactmembership@prsm.com.

 

 


Will Your Stores be Impacted by Water Shortages, Price Hikes?

According to data released this summer by the U.S. Drought Monitor, nine U.S. urban areas are under "exceptional drought" conditions, 11 of the nation’s western and mid-western states are experiencing prolonged drought conditions, which some say could lead to significant cost increases for water.

To combat water waste, some retailers have begun to track usage and implement conservation measures. The Home Depot is leading the industry in both of these areas, as well as promoting “green products” on its store shelves.

In the coming 2014 Trends Report, issued each year by the Association to keep the industry abreast of changes in retail facilities management, The Home Depot reveals key aspects of its wide-ranging sustainability program.     

The Home Depot’s approach to water management begins with a clear understanding of how much water is being used at every store. Ron Jarvis, Vice President of Sustainability/SCR at The Home Depot, and who leads the chain’s sustainability efforts, cautions other retailers not to assume they know where the water in their operations is being used.

Jarvis and his team learned this lesson themselves: “We … assumed that 90 percent of the water was going to the garden center, but we looked at them and discovered that for a couple of them, people were using water to clean off sidewalks, to clean off the floors, the back loading docks, and that’s where most of the water was being used.”

Read more about The Home Depot’s water conservation and sustainability efforts in the PRSM Association 2014 Trends Report, to be delivered with your copy of the September October PRSM Magazine.

 

 


New Resources for Improving Air Quality and Outdoor Site Maintenance

This week PRSM launched new resources to help retail facilities managers improve in-store air quality and develop a comprehensive approach to all outdoor maintenance operations, especially landscaping.

According to the new 10-page guide, Retail Facilities Indoor Environmental Quality & Comfort, “Emerging code and green building programs endorse Indoor Environmental Quality & Comfort programs to protect the health and well-being of occupants - whether that occupant is a shopper in the store for 30 minutes, a full-time employee or a vendor visiting on-site to do a specific task.” 

Realizing indoor air quality is still emerging as a requirement in the overall landscape of Corporate Social Responsibility, the guide provides retail FMs with seven “first steps” to get started. They include guidance in these areas:

  1. Outdoor Air Delivery Monitoring
  2. Increased Ventilation
  3. Reduced Particulates in Air Distribution
  4. Indoor Environmental Quality and Comfort
  5. Tobacco Smoke Control
  6. Occupant Comfort
  7. Thermal & Lighting Comfort Monitoring. 

According to the new guide, Retail Facilities Outdoor Site Maintenance, “standards exist for sustainable structures (green buildings) yet, there are no comprehensive guidelines and performance benchmarks for those who want to create and measure sustainable landscapes. Landscapes have great potential for both environmental benefit and severe environmental damage.” 

To support the Retail FM in taking advantage of this opportunity to advance their company’s green mission, PRSM Association’s Sustainability Council has developed metrics, development options based on store needs, tools and case studies to help facility managers modify their outdoor service plan, which includes roofing, landscaping, sidewalks, outdoor pest control, outdoor lighting and storm water runoff. The guide provides retail FMs with six “first steps” to get started. They include guidance in these areas:

  1. Building Exterior and Hardscape Management Plan
  2. Integrated Pest Management, Erosion Control and Landscape Management Plan
  3. Stormwater Quantity Control
  4. Heat Island reduction, Non-roof
  5. Heat Island reduction, Roof
  6. Light Pollution Reduction

Information in these guides is broken out into these segments: Leadership Defined, Measurement and Benchmarks, Suggested First Steps, Tools & Getting Involved, LEED requirements, Retail Examples and Case Studies, Education and Conferences, Continued Reading.

Download copies of these latest components to PRSM Association’s online Sustainability Resource Center, (SRC) providing strategic and tactical information, tools and templates across a number of recognized environmental focus areas.  

 


Is Traditional Contracting Still the Best Way to Go?

Although the traditional method of contracting and budgeting for materials, plus labor has evolved greatly over the years, the debate continues over when to deploy a fixed contract, over one with bundled services. Summarizing a conversation between members at last year’s Mid-Year Conference I posted current thoughts and opinions in this blog post, “To Fix, or not Fix, the Total Cost of Service: That was the Question.”

On a recent PRSM Association Peer2Peer call, retailers discussed different approaches they used to initiate fixed cost or bundled contracts. Facilitator, Myriah Kingen of Burlington Coat Factory, posed the question to her fellow retailers, “How does your company do more with less?” One common theme was clear by the end of the call: there is no “right” way to manage facilities. Choosing fixed cost or bundling is determined by the trade – not the budget. Plumbing needs a different plan than HVAC and preventative maintenance requires a different solution than emergencies.”

A few retailers on the call revealed their success with benchmarking to help budget for the next year. One company found a 10-percent savings when bundling all their plumbing services with one vendor. Each item was categorized and tracked throughout a six month study. A close relationship with the vendor allowed the company to track whether the experiment was working at the store level. However, large jobs or emergencies were not covered in the contract. Now the retailer says they have charged all of their vendors, for all different trades, with finding cost saving solutions.

Several retailers on the call agreed preventative maintenance should be bundled. When the costs are negotiated up front, it is easy to make sure each store has the same treatment and the customer experience is unaffected. Scorecards also help evaluate whether vendors are meeting expectations. One retailer who uses scorecards stresses how important the onboarding process and future communications are the key to being successful.

Besides the type of trade, there are a few more considerations for the choosing traditional or non-traditional options such as the region, size of the store, and company policies. How does your company choose? Let us know below in the comments section.

For further reading, in the 2013 Best Practices Book, Member Deborah Kleopfer of W Services writes about how bundling “reduces store management time by eliminating multiple redundant scheduling requirements … can significantly reduce the issues/number of complaints … enhances the customer experience and enhances the environment for the store employees.”  Kleopfer argues in her Best Practice that “implementing this program reduces store management time and involvement, meets or reduces annual budget amounts and delivers a higher level of service quality.” 

 


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