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 …

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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  • 1. RNG S3 Small Store Summit Future of Small Format Retailing Pre-Event Webinar RetailNet Group Know Tomorrow Today www.retailnetgroup.com
  • 2. Bring the Future to the Present Know Tomorrow Today www.retailnetgroup.com
  • 3. External Drivers Shape The Retail Future Macro-Economic Political Societal Retail Future 2020 Industry Technology Know Tomorrow Today www.retailnetgroup.com
  • 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. 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. Discounters, Drug & Small Category Specialists Driving Small Box Sales Growth Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  • 7. Consistent Small Box Story with Category Specialists Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  • 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. QSR, Convenience, Discounter and Health & Beauty Channels Lead Stores Growth Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  • 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. Supercenters Shrinking Avg. Store Size Source: RetailNet Group database Know Tomorrow Today www.retailnetgroup.com
  • 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. 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. 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. 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. 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. Store & Network Renewal Source: American City Business Journals Walgreens Store Renewal Process – Re-Configured Checkout Know Tomorrow Today www.retailnetgroup.com
  • 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. Store & Network Renewal Source: RetailNet Group store visits Increasing Community Space Esp. Category Specialists Know Tomorrow Today www.retailnetgroup.com
  • 20. Localized to the Neighborhood – Assortment, Services Localism Source: Walmart Investor Relations, RetailNet Group store visits Know Tomorrow Today www.retailnetgroup.com
  • 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. 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. 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. 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. 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