A blog for all things retail and licensing.

Answer These Four Sales Tax Questions

Answer These Four Sales Tax Collection and Filing Questions to Avoid Expensive Issues

Guest Blog by Jonathan Barsade

It’s a sign of success when a company starts to experience rapid growth. Expanding into new markets and adding to your customer base is exciting. But it’s important to make sure you stay focused on all aspects of the business, not just your growth trajectory: Don’t allow growth to distract you from the administrative aspects of running your business, including sales tax collection and filing.

Most business owners have the best intentions when it comes to collecting and filing sales taxes, but they may not fully understand how it works. To avoid liability for major penalties and interest payments, you have to make sure you know the answer to these four sales tax collection and filing questions:

1. When should I file? This is an important question because filing cycles can be different across multiple tax jurisdictions, and taxing authorities may set deadlines on different days of the month. When you expand into new markets, it’s critical to consult all relevant taxing authorities and make sure you know when to file in every jurisdiction to maintain compliance.

2. What do I have to file? Sales tax isn’t the only levy business owners may be required to collect. In some instances, companies must collect use taxes. Your obligations will depend on the requirements placed at the point of registration. By understanding what you’re required to file up front, you can avoid costly penalties and interest assessments later.

3. Where do I have to file? A pizzeria on Staten Island that crosses a bridge to deliver pies in New Jersey may create a “nexus” – a business presence in a tax jurisdiction other than the one they primarily operate in, meaning the business must file sales taxes in both states. It’s vital to understand where to file to ensure compliance with tax obligations.

4. How do I file correctly? Generally speaking, the onus is on the business owner to file correctly, and that includes the obligation to present all relevant documentation. For example, if a customer claims to be eligible for a charitable organization tax exemption, it’s a good idea to ask for a certificate so you can document eligibility if asked later by a tax agency.

Taxing authorities generally don’t give business owners a break for good intentions, so it’s critical to make sure you understand when, what, where and how to file in advance. Failure to know the answer to any one of these questions can result in the requirement to pay major back taxes and penalties.

Instead of going it alone in a complex tax environment, many companies rely on a partner to assist them with sales tax compliance. An automated solution that applies the latest rates and regulatory rules to accurately collect and file sales taxes across jurisdictions can allow company leaders to get back to what they do best — running the business.

But whether you choose to handle your sales tax obligations in-house or find a reliable automated platform, it’s important maintain focus on administrative functions, even when entering a period of rapid growth. Knowing the answer to these four questions is a great first step that will help you make sure you fully comply with your sales tax and use fee obligations as you grow your company.

Jonathan Barsade is CEO of Exactor

Lost in Translation: When Great Designs Become Mediocre Displays

Guest Blog by David Muller

A great display is not only a work of art, a thematic rendering of a winter wonderland that evokes children’s stories and mythical creatures, an extravaganza of locomotion – of marching soldiers and dancing bears, of rotating cityscapes and the to-and-fro of villagers descending snow-covered slopes – that, through a combination of lighting, paint and hidden wires, tells a story and attracts a crowd.

A great display is also an example of coordination and translation, where a professional can actualize an artist’s vision into a three-dimensional model of perfection.

And yet, too often what we see on paper – what I see on paper – bears little resemblance to the nuances and flourishes, and the angular shapes and sharp lines, that represent an artist’s vision.

Whether a result of poor communication, or a product of too many chefs in the proverbial kitchen (in this case, too many artists in the studio), there is an increasing disconnect between designs for various displays and the construction of those respective plans.

From the majestic window displays of Manhattan’s fashion emporiums, in which the facade of a French Renaissance revival mansion looks like the reels in a movie that includes tuxedo-clad aristocrats and stylish flappers, and Colorado cowboys and Grand Prix drivers, to huge conventional halls where vendors use displays as conversation pieces and an informal means of business development, one thing is certain: If the construction of these displays falters, if a designer outsources too much of this work to too many firms (of differing skill and accountability), then that business will suffer.

Again, I issue this statement from experience because, where there is more one-on-one collaboration between a designer and the person responsible for bringing a blueprint to life, the chances for success improve markedly.

This point may seem obvious – indeed, it is obvious – but, in the face of deadlines, tightened budgets, searching for the right materials, and the back-and-forth of messages and in-person meetings, collaboration can soon descend into chaos.

The logistics become even more complicated, when trying to corral representatives from different firms to convene in a physical location.

What soon happens is an unintentional, and far from comical, version of “telephone” where a designer and one of several builders enter a conference room and talk to a squawk box – a hoot-n-holler piece of wired plastic with pinhole speakers – that connects to other vendors working on the same project.

Between the overlapping voices and poor sound quality, along with the difficulty of knowing who is on the line, the effect is like one very bad auditory hallucination: All noise, and no signal.

Therein lies the difference between a display that resonates with viewers, inducing suspension of disbelief before this cinematic depiction of the good life, and some cardboard cutout that is as unremarkable as it is forgettable.

The fact is that converting an idea into a tangible object is a discipline unto itself. It involves so many moving parts, literally, that to have the gears built and assembled by artisans, on the one hand, and drones, on the other; to extol craftsmanship, as you simultaneously invite the poverty of mediocre thinking into the workplace, is to have a display that will intellectually collapse because of its contradictions and physically crumble because of its shoddy construction.

Clarity demands the end of this conflict of visions.

Design mandates the erasure of confusion.

A great display requires great professionals, period.

David Muller is Founder and President of DCM Fabrication

Merchandise Monday: Zalemark Will Produce M&M’S Jewelry Collection

Mars Retail Group and Zalemark Holding Company, Inc. have announced completion of a jewelry licensing agreement enabling Zalemark to design, market and distribute a line of M&M’S Brand fashion jewelry. Currently under development, the collection may include earrings, bracelets, necklaces and rings incorporating the colorful fun of the iconic candy brand and the whimsical M&M’S Characters.

The M&M’S Brand jewelry line will be available for retailers to preview in late 2015, with distribution in first quarter 2016. With price points ranging from $49 to $129, the new line will appeal to a wide range of consumers – from trendy twenty-somethings to style mavens and collectors of M&M’S Brand memorabilia.

The world-renowned candy brand is no stranger to success in the jewelry industry. In 2010, an M&M’S Brand jewelry collection sold briskly in major department stores, a national grocery retailer, independent retailers and online.

“We’re thrilled to work with Zalemark, a company known for producing unique jewelry,” says John Capizzi, general manager of Licensing for Mars Retail Group. “I’m looking forward to sharing the stunning M&M’S jewelry designs with retailers and consumers.”

“M&M’S Brand parallels well with our other global brand, Crayola,” remarks Steven Zale, CEO of Zalemark. “With the historical testing of this product line, we predict it will move into the market place swiftly. The upward momentum of Zalemark is on a rolling path as we continue to add well-known brands to our line-up.”

Retailers tap technology and mobilize operations for streamlined execution, communication

Guest blog by Vladik Rikhter

The lives of field sales representatives and district managers require a certain level of dedication. Driving from store to store to check on the progress of a new promotion or a recently proposed sales strategy for an underperforming product is stressful and time-consuming enough. Then, there’s all that information to track from dozens of locations those corporate offices have to manage and assess. Even worse, the same data is coming from scores of stores and associates in different regions. Compiling that information and analyzing it takes time. Those are hours not spent traveling to stores to verify that a store manager installed a promotion appropriately or that products are on shelves properly. These are the real responsibilities of district managers and field sales representatives for retailers and consumer packaged goods companies (CPGs). Beyond that, organizations need to manage the information coming in from every store and process it in a way that can reveal insights into sales dips and other issues, which are tasks that take even more time to complete.

However, none of those standards or concepts for improving sales can be formalized without the data from managers and field associates. The metrics we use haven’t changed, but the way we collect the data and monitor its application has to adapt. Technology is the answer, and mobile technology, specifically, has the capability to simplify the process of reporting sales figures, unifying communications between different levels of management and improving operational execution for retailers and CPGs.

Bringing context to sales data, improving communication

The sales reports retail that field reps compile have always told us how much of a product sold, what the status of inventory is and the promotions that succeeded or failed. They’ve never offered additional context, though. There are reasons products move and why they go ignored by shoppers. Sometimes it’s a matter of placement; other times it’s just a simple mistake in the way the promotion was installed. Processing that feedback into something actionable prevent mistakes in retail execution demands a faster solution that helps get to the true root of the problem. Integrating mobile technology enables district managers and CPG reps to address this on two fronts. They can communicate instantly with store employees or corporate to verify the progress of a product or a promotion, whether through real-time data or shared images.

The planograms carefully developed to maximize sales and customer exposure to store promotions aren’t too difficult to understand or assemble. They are, however, heavily dependent on careful, accurate execution from store employees. Solutions that quickly enable store managers to share information related to planogram execution and hear about adjustments to make can save dollars. Even if it’s only a few hundred dollars a week, that amount of money adds up over time.

Communication solves problems in operational execution

Frequent communication, whether through conversation or the sharing of data and images, is the only way for management and sales teams to ensure success. Every store has some problems to solve. Looking only at their failures and simply saying, “it needs to improve” won’t lead to solutions. Data leads to a sounder understanding of the problems stores have and helps create a channel for store managers and sales reps to solve problems together. The more stores and management communicate, the more information can be created to piece together the actual cause of a problem. Technology gives teams what they need to do that. With mobile solutions and other tools that enable instant feedback and communication related to execution, stores can receive messages from their corporate offices to prevent problems from lingering. Additionally, we no longer have to wait a week to learn a problem exists. Visual evidence that a worker misaligned an element defined in a planogram or listed promotion prices incorrectly allows for instant problem solving.

Technology is about making our jobs easier. The seamless, speedy sharing of information is just one way technology has achieved that, and retailers and CPGs need to find solutions that wipe out persistent problems in the industry.

Even as retailers continue to thrive in the face of challenges from e-commerce and other trends, finding ways to improve operations is vital to continued success. Technology won’t solve every problem, but, in so many cases, it will clear a path to the solution.

Vladik Rikhter is CEO and co-founder of Zenput

You’ve Translated Your Website. What’s Next?

Guest blog by Judd Marcello

So, you’ve made your store’s website accessible internationally, at least in the regions in which you’re aiming to grow your presence – congrats! But if you think it’s now just a matter of watching customers from all over the globe immediately stream in, I’m sorry to be the bearer of bad news:

Translation’s only the first step.

It’s an incredibly important step, of course, but to really take advantage of translation and truly engage retail customers in varying countries and cultures, you must do more. Here are some of the next steps you should take.


All the content on your site – marketing materials, product descriptions, even tabs and buttons – must be tailored specifically to the region and culture you’re targeting. Successfully localizing your site requires research and an understanding of the behaviors, values, and needs of local consumers. Then, you must adapt your already established brand voice to meet those requirements. Personalizing content not only makes your site and business more inviting to new international customers, but it also helps to avoid translation mistakes that can hurt your reputation—occasionally, beyond repair.

This is relevant to images and styles on your website as well – visual items are the first thing most visitors will notice on your site, and if they push the customer away (or offend them), there won’t be anyone around to read the carefully-translated text, or buy anything. It’s also important to keep in mind that communication styles vary around the world—so keep your brand consistent, but tweak the message as needed to make sure it aligns with the intended cultural context.

Bring people there.

You’ve made the site relevant and hospitable to your target customers, but you still need to get them there. Use marketing, social media, and make sure all outreach adheres to the same principles of localization and translation that your website has been privy to in order to drive people to your site. Partner with local or international influencers to gain access to an already-established audience, and build further credibility by association.

Mix up your (product) mix.

The same theory described in localization above holds true here, as well. Curate the product offerings on your store’s site to reflect the needs and wants of the region and culture you’re targeting. For repeat customers and increased engagement, it’s important to offer products in accordance with local customs, tastes, and norms. These cultural traits can be nuanced and hard to define between groups of people, but are extremely important to individuals, in this case potential shoppers. As a result, you need to compete with local offerings that already understand this nuance, and missing the mark (or worse, offending the consumer) can let the air out of an otherwise well-executed campaign.

Build your brand specific to the new culture

Identifying which words are prevalent in a given language and how they can be used to drive keyword-specific searches in your target market is crucial if you want your multilingual website to succeed, so invest in market-specific SEO; if users can’t find your site via local search engines with their usual keywords, how are they going to buy from you?

Just like with your home language site, link checks, browser compatibility fixes, and other quality assurance checks must be routinely performed for all multilingual sites prior to launch, during the initial rollout, and on a rolling schedule on an as-needed basis. It’s important to keep your adherence to best practices consistent among all your language sites—if the site for a customer’s native tongue feels like an afterthought, the customer will likely feel like one, too.

Feedback loop

Getting it 100% right on the first time is rare in any field. Get feedback from consumers in regions you’re aiming to expand to as you begin your efforts, or better yet, in advance; identify what flaws there are in your strategy or campaign for that specific culture, and take steps to correct them. If necessary, step up the quality of translation—while translation management software can greatly help efficiency by streamlining the processes around translation and localization, the actual linguistic work should be done by humans to ensure quality.

Judd Marcello is VP of marketing, Smartling

Mixing Digital and Direct Marketing to Reach the Right Customers

Guest Blog By Art Hall

How do you take an exclusively online marketing strategy and reap extraordinary results with the introduction of direct mail? The answer lies in a company’s data. When one of the nation’s fastest growing online retailers of healthy living products established success with its digital marketing efforts, the company looked to direct mail as a new channel in its marketing mix to reach more customers and drive growth.

Designing the Right Media Mix

When a company’s commitment is to stay at the forefront of its industry to benefit customers with high performance, affordable and safe products, its marketing strategy should replicate that excellence in its approach to customer engagement.

When the online retailer engaged directly with consumers, it was exclusively through its website, email campaigns, paid search and other digital platforms. Its digital marketing efforts had been also solely focused on communications to two key groups – look-a-like prospects and new movers. Their data contained some geographic and promotional history about their core customer, but that wasn’t enough. They came to validate that using other channels would allow them to spend effectively and ultimately grow and extend the business.

The marketing team also quickly realized that true strategic insights were lacking, so the company turned to Quad/Graphics for support in developing an insights-driven marketing approach necessary to build a successful direct mail campaign.

The program launched with the application of Quad/Graphics’ proprietary consumer research, along with data and market analysis in combination with tailored messaging and creative. Immediately, they discovered that adding direct mail to their media mix would optimize customer response and maximize ROI.

Applying an Insights-Driven Approach

The partners’ foray into an insights-driven approach to direct mail began with the overlay of demographic, lifestyle, and proprietary survey data to model customers who had bought a product for the home at one time and recently moved. This data combined with the tracing of new residential addresses enabled them to deliver highly personalized direct mail pieces that resonated with those target customers.

Historically, their customers had come from online advertising, so early on they had to model from people purchasing online as opposed to those who purchase from direct mail. It was a challenge they overcame when they concentrated on areas that had the highest penetration of customers.

This customer profiling strategy enabled the retailer to reach the correct customers with creative that resonated. The result was eye opening and the marketing team was quick to determine that they wanted to move their direct mail efforts beyond only mover customers.

The team continued to use data to glean insight on how prospective customers might consume media, as well as their attitudinal preferences, in order to identify new prospective customer groups, recommend data driven creative, and develop a contact strategy. Specific segmentation strategies combining a tailored format and messaging approach were rolled out in phases targeting look-a-like households, relocated customers, and new mover prospects.

Achieving Measurable Success

Since early 2014 when the retailer began to blend its digital and direct marketing, the company has drastically reduced test and learn times compared to traditional testing methods and recognized direct mail results in half the time.

They also avoided incurring operational costs to support limited test responders, and combined conjoint analysis including quantitative with qualitative insights to commission the ‘best of the best’ in optimization.

In calculating their return on advertising spend, the company was able to measure gross revenue realized for every dollar spent, which was $1.50 for modeled prospects, $4.00 for new movers, $13.00 for relocated customers, and $5.00 for customer upgrades.

The measurable success of adding direct mail to its marketing mix demonstrates that the application of new multichannel approaches can drive continuous growth for an online organization.

Art Hall is Multichannel Sales Consultant of Integrated Data Solutions at Quad/Graphics

Best Tech for Managers to Keep Tabs on Their Store

Poor collaboration can kill your company and increase failures in the workplace, according to Salesforce. In fact, 97 percent of those surveyed think a lack of alignment with their team impacts the outcome of a project. To stay on top of your business, you need to do more than just stay in touch with your employees when you are out of the office. Instead, carefully pick and choose technology and collaboration tools to monitor what’s going on in your store even when you are out.

Set Accountability Measures

Do you really know what your employees and customers are up to? Establish a protocol for when you step out of the office to keep accountability among your employees. Set up a Google spreadsheet with a list of tasks ranging from running sales reports to organizing inventory and break schedules. Ask employees to log on and check off pre-designated tasks. Then, you can log on from a smartphone or tablet to look through the tasks to ensure the business is running smoothly. For longer errands and outings, ask for a brief status report on a Google doc or text message to stay on top of the latest developments in your store.

Stay in Touch Virtually

Using a smartphone is an obvious choice for keeping tabs on the office, but not all devices are created equally. Pick up a Samsung Galaxy S 6 with a free 128GB memory card to store more data, photos and videos. Ask employees to occasionally send over an image or video of what’s going on in the store. For example, you may need to see how promotional signage looks to pick up more supplies and inventory before heading back to the office.

Use an Electronic Gateway System

Rethink your electronic payment gateway, and switch to a system that makes it easy for you to log on remotely while doing errands or at a meeting. Choose a system that allows you to virtually access a transaction report. You can usually narrow down the search option by a credit and refund search to see how many customers are coming in for returns and how many are looking for your sale or newly stocked items.

Leverage Team Communication Tools

Incorporate a team communication tool like HipChat or Slack so owners, managers and employees can all stay on the same page. The idea is to use one central platform for both communication and tasks to keep tabs on the big picture of your business.

HipChat allows users to share comments and videos, and it integrates with services like Dropbox and Twitter. Store managers can ask employees to send out tweets alerting followers to new sales. Or, use Slack to monitor the tweets before sending employees a video file to look at for future social media posts.

Use a Webcam

Set up a basic webcam to see what customers and employees are up to for simple monitoring over your smartphone or tablet. Send back texts or notes to employees to ask questions or assign new tasks. For something more robust, try a security camera with remote access or get innovative with your options. Some stores use department store mannequins outfitted with audio and video recording capabilities. Ideal for large stores, managers can keep tabs on what customers are doing on multiple floors and ask employees to address issues as needed.

The Power of Reviews: Bringing In New Business

When prospects want to learn more about your company, they typically head directly to your website. If they like what they see, the next stop is online customer review pages to confirm that the claims you make about your offerings are factual.

But what if you don’t have any solid reviews out there for potential customers to view? There’s a possibility they may have doubts and take their business elsewhere.

Unfortunately, obtaining reviews from customers may be quite challenging if you’re crunched for time or don’t know where to start. Here are some ideas worth considering:

Get Active on Review Sites

Although there are tons to choose from, customer feedback from review sites are frequently viewed in the cyber world by curious prospects. Some reputable review sites include Angie’s List, Google Reviews, City Search, Yahoo Listings and Yelp. Also, confirm you haven’t missed any industry-specific review sites. After all, you wouldn’t want to be absent from Zagat if you own a restaurant.

Include Feedback Requests in the Sales Cycle

Once checkout is complete, encourage customers to leave a review in exchange for an incentive. If you’re a brick and mortar establishment, communicate to employees this should be done when handing over the receipt. (You could even print the incentive directly on the document). By contrast, online businesses can include a link to review sites or to a fillable form on their website at the top of the order confirmation page.

Leverage Your Company Website

Along with publishing genuine reviews on your website, you’ll also want to invite customers to share their own thoughts. Create a fillable form or post a direct link to your profiles on outside review sites. The responses received will serve as instant credibility boosters from the moment visitors enter the site.

Companies, like LifeLock, also dedicate a page on its website to customer reviews to demonstrate that its offerings live up to all the hype.

Use Social Media

Social media is an efficient and often effective way to request reviews. You can send out a tweet, ask Facebook followers to leave a detailed recommendation using the built-in tool, or use the option on the LinkedIn products and services page to share feedback.

And once your customers leave reviews, retweet, favorite or share them and respond to their specific comments or concerns if needed. The idea here is to single the customer out for going the extra mile, address any issues, and thank them for doing business with you. And by going the extra mile, chances are they’ll do business with you again and tell their friends about your company. Furthermore, other fans will be inclined to do the same to garner the same attention. (Even if the feedback is negative, fess up to your mistakes and use it as a learning experience to improve).

As the old adage says, closed mouths don’t get fed. And the same principle applies to your business with regards to customer reviews. If you sit back and expect the feedback to come rolling in without exerting any effort, don’t look forward to an overwhelming amount of feedback. But if you put in the work and express your gratitude towards customers for taking time out their busy schedule, the positive feedback will continue to roll in, and so will the sales.

Retailers, Stay on Offense

Early to Build Distribution Networks that Live Up to Intense Holiday Demands

“Ship from Store” fulfillment requires an integrated real estate strategy to meet retailers’ omnichannel objectives. Source: JLL.

Guest blog by Kris Bjorson

Delayed packages and mismatched orders characterized the 2013 holiday delivery debacle and last year saw retailers starting holiday planning months ahead. To compete effectively during the 2015 holiday season, retailers are taking a more holistic view of their supply chain real estate.

The journey to a flexible, functional distribution network is a dynamic model, and it’s vital to have the right real estate strategy in place to support growing omnichannel expectations.

For those beginning to shop for the right retail distribution real estate, we’ve captured some key changes executives can expect in today’s market:

  • Supply chains are now customer-facing. In omnichannel retailing, the supply chain is no longer hidden; it’s as customer-facing as the check-out counter. Retailers are applying systemic changes to the entire supply chain not only to streamline fulfillment and delivery, but also to make it as cost-effective as possible. Retaining flexibility in the supply chain has become critical as competitors are using the customer delivery experience as another way to delight consumers and win market share. According to JLL research, seven out of 10 retailers are still shaping their omnichannel strategy and customer commitments.
  • Network strategies are now constantly being re-evaluated. Implementing a smart distribution network strategy has forced retailers to re-evaluate their entire supply chain every three to six months rather than every two to four years. Many have brought the supply chain analysis function in-house to ensure a constant tweaking of scenarios. Supply chain executives are also being more proactive about repurposing existing property assets by investing in technology for front to back-end systems support, and creating dynamic inventory deployment strategies.
  • Advance testing has become essential. The monthly Global Port Tracker report, released by the National Retail Federation and Hackett Associates, predicts that shipments, on average, will rise nationwide during the first six months of 2015. This is a chance for retailers to test their supply chain strategy before holiday crunch time. For example, with the congestion and recent port closures on the West Coast retailers continue to diversify their distribution networks to the East Coast. This means competition will intensify for space near East Coast seaports and force rents to rise in locations such as New York/New Jersey, Savannah and Charleston. Retailers, with only West Coast operations, will bring in cargo earlier than usual in an effort to minimize supply chain disruptions. It is important to have distribution centers (DCs) in the right location to meet the ever-increasing and more aggressive delivery demands.

Alternative distribution locations lurk beyond the coasts. With more than 60 tenants currently seeking big box DCs of one million square feet or more nationwide, space is at a premium and demand is outweighing immediate, available buildings and sites by nearly three to one. Furthermore, the supply of distribution space is not rising as fast as in previous ‘boom’ cycles. Approximately 171 million square feet of new industrial space is expected to be completed nationwide this year. However, these new deliveries represent the highest level in seven years, but still fall below the 40-year average of 178 million square feet delivered annually. As an alternative to coastal port locations, for example, one major retailer decided to build a fulfillment center in Indianapolis in close proximity to a new CN and Indiana Rail Road intermodal terminal. The Indianapolis fulfillment center will leverage a one-day drive time to 50 percent of the US population, including a reasonable drive time to Chicago, and close proximity to FedEx’s second largest ground and air cargo hub at Indianapolis International Airport.

  • Secondary markets aren’t so secondary anymore. Leasing space in secondary and tertiary markets is a way to avoid the competition for highly coveted real estate in close proximity to ports. These markets offer tax incentives and improved, entitled land sites for new construction giving retailers options to pursue and reap the benefits of modern space ready at a lower price. Locations such as Indianapolis, Phoenix and Kansas City continue to benefit from these alternative market strategies.  
  • Smart supply chains follow smart negotiations. Know your options and cost trade-offs before going into negotiation for lease terms and conditions. With transportation and inventory being the largest costs, smart clients are widening their search areas by diversifying transportation and inventory deployment strategies for each new location.  With constrained real estate supply, this year is a landlord favorable market. So, a flexible supply chain strategy means you’re not locked into a set location, which can give you flexibility for getting the best deal with the right real estate and workforce solution. Given that the labor markets are tightening faster than the real estate markets, you may consider paying more for the fixed cost of real estate rather than paying a premium on the ongoing, variable cost of your workforce. This is typically a submarket (side of town) decision within a larger market. It is critical to consider all costs and qualitative factors in a holistic, integrated manner.
  • Seasonal space is at a premium. For seasonal space, you need to start today not only to understand the real estate options in the desired market but also lay some relationship ground work for in the long-term. For short-term deals, consider executing a temporary use agreement instead of a real estate lease, or negotiate a contract across multiple locations with a national or global landlord. You can also offer to pay the entire gross rental amount up front in exchange for a discount. For your potential long-term real estate needs, perhaps a pre-commit with a preferred landlord will unlock seasonal space today.
  • Lines are blurred between stores and distribution facilities. On the store front (excuse the pun!), retailers are rapidly turning to their physical locations for “last mile” fulfillment and delivery.  In fact, we believe that in the near future, about 30 percent of a retailer store footprints will be converted to mini-fulfillment operations for e-commerce purchases. “Ship from Store” delivery strategies take advantage of stores to reach customers more rapidly, providing package pick-up and ship-from-store services.  This strategy helps retailers with both the when and where of delivery. Additionally, some locations that might otherwise have been stores can act as non-customer-facing DCs or ‘dark stores’. Dark stores are often retail facilities that were underperforming stores and have been converted in to small DCs. The strategic location of dark stores allows the retailer to house goods near customers to fulfill online purchases and delivery in a shorter time frame than their closest distribution center hubs.

It’s never too early for retailers to start planning their distribution real estate strategy for the holiday season or the future especially when the location of fulfillment centers can make or break delivery commitments to customers and help shape the overall customer experience.

Kris Bjorson is international director, head of retail/e-commerce distribution, JLL

Consumers Pave the Way Toward Sustainability – Can Retailers Keep Up?

Guest Blog by Leela Rao-Kataria

The global movement toward sustainability went full-throttle in April. Earth Day fell on April 22nd, just prior to the two-year anniversary of the Rana Plaza factory collapse. This was followed shortly after by the earthquake in Nepal. The combination of these events created more discussion around sourcing, forcing people to take a closer look at the repercussions of manufacturing products abroad.

As the public was bombarded across channels – from social media to commercials, articles and celebrity activism – it got me thinking: Have you ever heard the expression “it takes 1,000 whispers to make a shout”? Well these 1,000 statements caused a collective moment toward awareness around ethical sourcing. There were several dialogues that set-off the wave of conversation in April. Here’s what came out of them:

Patagonia Takes a Stand on Earth Day
No one goes against the tide more than the founder of Patagonia, Yvon Chouinard. In honor of Earth Day, Chouinard took out a full page ad in the New York Times that said, “Don’t Buy Our Clothes!”1 This promotion caused quite the stir and set the stage for Patagonia’s refined version of the pop-up store, called Worn Wear Wagon. The wagon is a mobile garment shop that will make its way throughout the country, stitching, mending and fixing any clothing previously purchased from the brand. Chouinard believes this initiative is what separates Patagonia from other brands in that the retailer is actually living the values it preaches to reuse and recycle. “I’ve always felt guilty about making consumer things. So I have a sense that it’s my responsibility to help people wear them as long as possible,” Chouinard stated in an interview with the Today Show following the release of the ad.

Other retailers made waves on Earth Day, too. ModCloth launched its eco-friendly style collection, which minimizes waste through repurposing fabric and highlights the fair wage and comfortable work environment of their Balinese sourcing.2 L’Oreal was featured in Green Retail Decisions for lowering its CO2 emissions by 57%, the majority of which was achieved using renewable energy in facilities.3

Fashion Revolution Day Emerges
Fashion Revolution Day revolution emerged in response to the tragic Bangladesh factory collapse in 2013. Fashion Revolution Day4 occurred on April 24th, marking the two year anniversary of the disaster. Consumers were asked to wear their clothes inside out on that day in order to make the labels visible. The nonprofit organization behind the awareness movement stated, “Social and environment catastrophes in our fashion supply chains continue. Fashion Revolution says enough is enough.” The organization emphasizes the need to value people and the environment, accomplishing this through transparency and education. The day was accompanied by a notable social media push to promote the hashtag #whomademyclothes5.  Retailers who implement practices aligned with this thinking were promoted on the Fashion Revolution website.


John Oliver Takes Aim at the Apparel Industry

Millions tuned in to watch John Oliver berate the current state of consumerism specific to the apparel industry. Oliver claimed that people are interested in only shopping for the lowest prices possible, willing to sacrifice ethical work conditions and fair trade wages for apparel manufactured abroad. However, he failed to mention the steps that several retailers are taking to achieve greater visibility into their sourcing and to ensure that labor practices are ethical. This is an issue retailers have faced for some time, and will continue to face for the foreseeable future.

Getting insight into what’s happening at the factory level has been a priority for many retailers who understand that consumers won’t support brands that don’t practice ethical treatment of their employees. Oliver didn’t showcase the retailers that are prioritizing the manufacturers, including brands like Everlane whose value proposition is that true costs are revealed to customers using transparent sourcing. Photos of factories, as well as the stories of employees, are featured on their website, along with clear diagrams of the price their consumers pay for the material, production, etc. and how that contributes to the final price. Activists like Angelina Jolie support the brand and wear its products frequently.6

Levi Strauss & Company7 is another brand that had made strides on this front. Levi’s has partnered with the World Bank Group’s International Finance Corporation (IFC) to secure better interest rates for its manufacturers. This allows them to purchase raw materials without the burden that comes from bank loans with exorbitant interest rates. Suppliers are rewarded with better rates based on a responsibility score card. Levi’s features this partnership on its website as a “shared prosperity,” with a mutual belief that suppliers should be rewarded for doing the right thing.

The consumer movement toward ethics and sustainability is in full force. How fast retailers will be able to respond to the demands of the public is still to be seen and will depend on their ability to prioritize investment around these initiatives. Retailers like Patagonia and Levi’s that are ahead of the game in this regard are finding their investments to already be paying off. Those that have fallen behind and fail to create a transparent sourcing model for their consumers will be left behind, as millennials continue to lead the charge toward a new model for apparel manufacturers.

Leela Rao-Kataria is Retail Marketing Manager for GT Nexus