RNG S3 Small Store Summit

Future of Small Format Retailing
Pre-Event Webinar
RetailNet Group
Know Tomorrow Today

www.ret...
Bring the Future to the Present

Know Tomorrow Today

www.retailnetgroup.com
External Drivers Shape The Retail Future
Macro-Economic

Political

Societal

Retail Future
2020
Industry

Technology

Kno...
Today’s Agenda

RNG’s Small
Format Channel
Outlook

Winning Small
Format
Characteristics

Future Vendor
Value
Proposition ...
Over Half of Store Based Retail Sales Growth
2014E-2017E Coming From Stores <35K Sq. Ft.

Source: RetailNet Group database...
Discounters, Drug & Small Category Specialists
Driving Small Box Sales Growth

Source: RetailNet Group database

Know Tomo...
Consistent Small Box Story with Category Specialists

Source: RetailNet Group database

Know Tomorrow Today

www.retailnet...
95% of Store Based Retail Stores Growth 2014E-2017E
Coming From Stores <35K Sq. Ft.

Source: RetailNet Group database

Kno...
QSR, Convenience, Discounter and Health & Beauty
Channels Lead Stores Growth

Source: RetailNet Group database

Know Tomor...
9 of Top 10 Store Growth Segments Are
Small Boxes <10K Sq. Ft. on Average

*Supercenter Data Not Shown
2009 – 180,873 / 20...
Supercenters Shrinking Avg. Store Size

Source: RetailNet Group database

Know Tomorrow Today

www.retailnetgroup.com
Key STEIP Drivers of Small Stores
Constrained
Consumer Liquidity

Source: RetailNet Group research

Urbanization &
Ex-urba...
Small Box Landscape Summary
• 50% of Sales Growth, 95% of Stores Growth 14E17E Coming from Stores with avg. 35K sq. ft. or...
Today’s Agenda

RNG’s Small
Format Channel
Outlook

Winning Small
Format
Characteristics

Future Vendor
Value
Proposition ...
Small Box
Food Relevant

Optimizing Store Network & Versioning
Next Step: TargetExpress

Key Attributes to Note:
•
•

Firs...
Small Box
Food Relevant

Walmart Downsizing to Express Formats
Key Attributes to Note:
•
•
•

•

•
•

•
•

Source: RetailN...
Store & Network
Renewal

Source: American City Business Journals

Walgreens Store Renewal Process –
Re-Configured Checkout...
Store & Network
Renewal

Remerchandised Center Store in Small Box
Fresh Grocery with Extreme Value in Produce

Source: Spr...
Store & Network
Renewal

Source: RetailNet Group store visits

Increasing Community Space
Esp. Category Specialists

Know ...
Localized to the Neighborhood –
Assortment, Services

Localism

Source: Walmart Investor Relations,
RetailNet Group store ...
Today’s Agenda

RNG’s Small
Format Channel
Outlook

Winning Small
Format
Characteristics

Future Vendor
Value
Proposition ...
2020 Supplier Value Proposition
Supplier Customer Development Process

Brand Offer

Retailer
Economics

Capabilities
Suppl...
Today’s Agenda

RNG’s Small
Format Channel
Outlook

Winning Small
Format
Characteristics

Future Vendor
Value
Proposition ...
Small Stores – What Do You Need to Solve For?
• Brands
–
–
–
–

Retailer’s Segmentation Strategy
Occasion Based Strategy
F...
S3 – RNG’s Small Store Summit
April 8th – 9th – Dallas, TX
•

Dates:
– April 8th – Guided Store Tours
•

Food & Non-Food R...
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RNG Small Store Summit Content Preview

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A preview of the content that will be shared at RetailNet Group's first Small Store Summit, April 8th-9th in Dallas, TX. As more big box retailers explore smaller stores and incumbent small box leaders plan to expand store networks, the question of how to win in an increasingly competitive small store world is forefront for both retailers and brands. At RNG's Small Store Summit in Dallas on April 8th - 9th, you'll hear from experienced analysts and operators on what is driving the growth, who will win and lose, and how to maximize profitable growth in these growing formats.

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RNG Small Store Summit Content Preview

  1. 1. RNG S3 Small Store Summit Future of Small Format Retailing Pre-Event Webinar RetailNet Group Know Tomorrow Today www.retailnetgroup.com
  2. 2. Bring the Future to the Present Know Tomorrow Today www.retailnetgroup.com
  3. 3. External Drivers Shape The Retail Future Macro-Economic Political Societal Retail Future 2020 Industry Technology Know Tomorrow Today www.retailnetgroup.com
  4. 4. Today’s Agenda RNG’s Small Format Channel Outlook Winning Small Format Characteristics Future Vendor Value Proposition in Small Stores Know Tomorrow Today www.retailnetgroup.com
  5. 5. Over Half of Store Based Retail Sales Growth 2014E-2017E Coming From Stores <35K Sq. Ft. Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  6. 6. Discounters, Drug & Small Category Specialists Driving Small Box Sales Growth Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  7. 7. Consistent Small Box Story with Category Specialists Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  8. 8. 95% of Store Based Retail Stores Growth 2014E-2017E Coming From Stores <35K Sq. Ft. Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  9. 9. QSR, Convenience, Discounter and Health & Beauty Channels Lead Stores Growth Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  10. 10. 9 of Top 10 Store Growth Segments Are Small Boxes <10K Sq. Ft. on Average *Supercenter Data Not Shown 2009 – 180,873 / 2014E – 165,055 Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  11. 11. Supercenters Shrinking Avg. Store Size Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  12. 12. Key STEIP Drivers of Small Stores Constrained Consumer Liquidity Source: RetailNet Group research Urbanization & Ex-urbanization Aging Population Digital Retail Know Tomorrow Today www.retailnetgroup.com
  13. 13. Small Box Landscape Summary • 50% of Sales Growth, 95% of Stores Growth 14E17E Coming from Stores with avg. 35K sq. ft. or less • 9 of Top 10 Store Growth Segments are Small Boxes (Avg. Sq. Ft. / Store for Segment <10K) • Bifurcation – Low Cost & Differentiated – E.g. Discounters, Fresh Grocery • Increased Competition for Share of Household Spend – Shopper Retention • Downsizing both to new formats and within banners Source: RetailNet Group database, research Know Tomorrow Today www.retailnetgroup.com
  14. 14. Today’s Agenda RNG’s Small Format Channel Outlook Winning Small Format Characteristics Future Vendor Value Proposition in Small Stores Know Tomorrow Today www.retailnetgroup.com
  15. 15. Small Box Food Relevant Optimizing Store Network & Versioning Next Step: TargetExpress Key Attributes to Note: • • First TargetExpress to Open in July 2014 in Minneapolis Location – – • • • Pilot store will be 20K sq. ft. Test & Learn  Key Retailer Initiative for this format before further expansion Key Departments – – • • Located in bottom of apartment complex & near University of Minnesota Located near HQ Will include pharmacy  Trip driver Expanded grab & go food assortment Reconfigured Checkout  Optimized for higher traffic, smaller baskets Maintains treasure hunt experience Source: Target Investor Relations, RetailNet Group research Know Tomorrow Today www.retailnetgroup.com
  16. 16. Small Box Food Relevant Walmart Downsizing to Express Formats Key Attributes to Note: • • • • • • • • Source: RetailNet Group research Walmart currently operates 20 Express locations, majority in NC as a part of pilot Price points – no convenience premium Category and department representation - Fresh foods at a savings vs. local supermarket competition Store locations in areas with limited access to fresh produce / groceries at low prices regardless of urban or rural real estate Broad assortments - can do full grocery shop “To go” foods – Catering to time and money compressed shoppers, can also serve fill-in or meal occasions trips Pharmacy present – Driving trips and capturing spend with recent healthcare changes Gasoline (in some locations) – Traffic driver and one-stop-shop Know Tomorrow Today www.retailnetgroup.com
  17. 17. Store & Network Renewal Source: American City Business Journals Walgreens Store Renewal Process – Re-Configured Checkout Know Tomorrow Today www.retailnetgroup.com
  18. 18. Store & Network Renewal Remerchandised Center Store in Small Box Fresh Grocery with Extreme Value in Produce Source: Sprouts Investor Relations, RetailNet Group store visits Know Tomorrow Today www.retailnetgroup.com
  19. 19. Store & Network Renewal Source: RetailNet Group store visits Increasing Community Space Esp. Category Specialists Know Tomorrow Today www.retailnetgroup.com
  20. 20. Localized to the Neighborhood – Assortment, Services Localism Source: Walmart Investor Relations, RetailNet Group store visits Know Tomorrow Today www.retailnetgroup.com
  21. 21. Today’s Agenda RNG’s Small Format Channel Outlook Winning Small Format Characteristics Future Vendor Value Proposition in Small Stores Know Tomorrow Today www.retailnetgroup.com
  22. 22. 2020 Supplier Value Proposition Supplier Customer Development Process Brand Offer Retailer Economics Capabilities Supply Chain Capabilities Demand Chain Insights & Analytics Source: RetailNet Group research Know Tomorrow Today www.retailnetgroup.com
  23. 23. Today’s Agenda RNG’s Small Format Channel Outlook Winning Small Format Characteristics Future Vendor Value Proposition in Small Stores Know Tomorrow Today www.retailnetgroup.com
  24. 24. Small Stores – What Do You Need to Solve For? • Brands – – – – Retailer’s Segmentation Strategy Occasion Based Strategy Further space compression Scale and profitably execute shopper marketing in a small store environment • Retailer – Shopper experience & retention – Merchandising to drive up basket in an in-fill / convenience trip – Profitably managing a far more complex environment Source: RetailNet Group research Know Tomorrow Today www.retailnetgroup.com
  25. 25. S3 – RNG’s Small Store Summit April 8th – 9th – Dallas, TX • Dates: – April 8th – Guided Store Tours • Food & Non-Food Route – April 9th – Conference • • • • • • Morning: General Session Afternoon: Food & Non-Food Breakout Location: Hilton DFW Lakes Executive Center Register at: Events.RetailNetGroup.com Early Bird Savings Deadline: Feb. 7th RNG Hotel Rate Deadline: March 17th Full Agenda: Events.RetailNetGroup.com Questions: Email Sales@Retailnetgroup.com Know Tomorrow Today www.retailnetgroup.com

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