According to retail interior environments manufacturers and industry observers, the post-2008 downturn was a steep slope for some, but eventually a measured, steady recovery fed off a Darwinistic business climate where the strong interior commercial fixture producers only became more robust, thanks to creative agility, new materials integration, and flexible manufacturing processes.

And, in general, manufacturers and others tied to the industry are saying graphic designers and product developers are becoming more in tune with the manufacturing processes and more tightly linked with all phases of meeting unique customer needs.

Todd Dittman, executive director of the Association of Retail Environments (A.R.E.) says the future looks bright for retail environments manufacturers who embraced new design concepts, new manufacturing technology and newly-introduced materials.

Since the 2008 economic downturn, A.R.E. members have moved forward through a variety of means, Dittman said.

“A.R.E. represents a variety of suppliers, so our members responded in a variety of ways,” he said. “Some members expanded their customer target base, going into new retail segments that were not as heavily hit by the recession, such as grocery, restaurants and institutional segments.

“To support cash flow, others also expanded services, such as handling transportation and logistics. Some manufacturing members responded by taking cost cutting measures, including reducing headcounts, leaving vacant positions unfilled, and eliminating shifts.

“There also were several consolidations during that time. Because of these actions, many of our members emerged from the recession financially stronger and more responsive to customers’ needs.”

Gaining a competitive edge

But, the emergence of new market opportunities has also played a major role in manufacturers’ gaining competitive advantages since 2008 and after, Dittman says.       

“Consolidation in the banking and cellular industries over the past few years has provided opportunities for member companies to get involved in rebranding projects,” says Dittman. “We also are seeing members become more involved in the hospitality sector. In addition, fixture companies started competing for POP business with brands, and the burgeoning pop-up shop has provided a new avenue for business.”

“I can’t speculate on the long-term future in retail. But, for the near term, where there is a store, there will be a need for store fixtures. Retail as we’ve known it is in a rapid state of change. With online and mobile growth, brick and mortar stores are becoming destinations for experiencing brands in a way they can’t online.”

At the same time, the shopper is much more tech-savvy and expects a quick and easy shopping experience in the store. A.R.E. members are looking at ways technology can enhance their fixtures and other in-store elements.

New technology, creativity

Dittman also sees the infusion of more supplier companies with expertise in new technologies as a plus for retail environments manufacturers.

“We expect to see more technology companies joining A.R.E. as well as partnering with our existing members,” he says. “Members who can provide products that help brands connect with their customers, regardless of how or where they shop, will be successful.”

Dittman adds that keeping current with a rapidly changing retail environment sector is an over–arching challenge for manufacturers. What is trending today, may not be tomorrow, he says.

“The rapid pace of change in retail, technology and demographics, along with numerous sources of information make it hard to stay on top of trends. A.R.E. launched a new benefit this year aimed at helping educate our members on significant trends that are likely to impact the retail industry,” he says.

“The members-only quarterly A.R.E. Trend Report focuses on seven areas: macro, technology, demographics, design, brand strategies, visual and business. It’s a data-driven report sharing cultural shifts and innovation, and is developed using data and information from A.R.E.’s partners and other media sources. The goal is to provide our members with a powerful resource to guide clients through the changing retail environment.”

Chandler, Inc., adjusting, growing

One leading edge manufacturer whose company culture embraces these progressive concepts is Chandler, Inc., an Afton, Minnesota, retail, corporate and branded environments producer. The company works with customers from concept, design and fabrication, offering design conception, 3D modeling, engineering, manufacturing, program management and logistics.

Recent clients include Under Armour, Sony, Home Depot, Andersen Windows, Target and Whole Foods. More than 30 years ago, Harvey Chandler, a  draftsman, illustrator and product designer, founded Chandler Inc. Today, Harvey’s two sons, John and Curt, continue to maintain their father’s core philosophy at Chandler.

Michael Epsky, account executive with Chandler, was asked about how his company has dealt with the every-changing retail interiors market and what steps his company has taken to address some specific challenges and opportunities.

“For Chandler, the store fixture market is thriving since we directly work with our clients to plan and budget efficient fixture spends each year,” Epsky said. “More than ever, our clients are relying on hard data to help them allocate funds for fixture budgets. From our vantage point, successful companies are using intelligent fixture spends to drive dollars to the bottom line.”

Cost efficient materials remain at the core of fixture design today, Epsky said. MDF and melamine cabinetry are still at the core of what Chandler does. As stores work to elevate their brand, creative uses of reclaimed lumber and materials are very popular and unique ways to create attractive, natural, and organic surfaces.

“Touch screen technology, prevalent in so many areas of our lives today, is woven into fixture manufacturing more than ever,” Epsky said. “LED lighting is now the only option, especially when one considers the importance of maintaining fixtures once they are installed.”

Engineered-core materials are helping to reduce waste, lower costs, and present opportunities to recycle materials, adding an important green element to many projects.

Chandler has also invested in technology. “As our business continues to grow in this thriving market, we’ve invested money to keep our company up to date with the latest software, specifically a new cloud-based CRM, and the latest 3D modeling software,” Epsky said.

Equipment investments have included the addition of metal fabricating capabilities, to more easily integrate wood and lightweight aluminum tubing into store fixtures as well as additional pallet racking and material moving equipment to maximize space.

As Chandler seeks to streamline and fast track the development of new fixtures, 3-D printing has had a tremendous impact on how fast and relatively inexpensive small prototype parts can be produced.

Fixture producers are becoming more flexible in materials used, processes employed and service provided.

 

 

A.R.E. president sees room for growth, here and internationally

 

 

Bob Rosean, CEO of TJ. Hale, Inc., a Menomonee Falls, Wisconsin, retail environments manufacturer, is president of the Association of Retail Environments. He recently spoke with FDMC about his association and the industry he serves.

FDMC: What successful strategies were used by those who managed to grow and prosper after the 2008 recession?

Rosean: Critical to those who thrived after 2008 was who you did business with. In other words, if you were either extremely selective with the retailer you worked with (working on those retailers with successful strategies for growth – e.g. Panera Bread, Buffalo Wild Wings, H & M, etc.) or extremely lucky to have worked with these retailers – you saw success.

The flip side of this is, if you were hooked onto the wagon of a retailer who was not prepared for post 2008, you had difficulty – no matter how successful a supplier you were (e.g. Sears, Gap, Cold Water Creek, etc.). 

As a more strategic answer to your question, the best suppliers in our industry have balance in their client portfolio. The best suppliers are also well supported on their balance sheet – they are prudent when it comes to cash management. Finally, the best suppliers in our industry have the best people – period. At the end of the day, our industry is about client management – service, quality of product and engineering prowess. Clients value these skills in the long run.

FDMC: What might we see in the next ten years as far as new markets for A.R.E. members and the retail environments sector?

Rosean: New markets will certainly come from Europeans and Asians making their way into the U.S. market. We’re the envy of the world in terms of retail consumer scale and dollar value. We’re the most stable country with the most sophisticated retail system. 

I also believe there is opportunity to expand geographic reach – as more and more CPG’s (Consumer Product Groups) and retailers look to drive seamless brand identity globally with partners that understand intimately what is needed to make that a reality. Finally, I believe those suppliers that either: a) focus on doing what they do in a world class way (lowest cost, most flexibility, most options of an item; or b) expand their vocabulary of services and products for their clients will have the greatest success. 

FDMC: If a cabinetmaker or millworker were considering entering the retail environments arena, what advice would you give them?

Rosean: My advice to anyone looking to get into this industry is to first head to Global Shop (March 23-25, 2016 in Las Vegas) to get the best look at what we do – and to listen to the excellent presentations being made there. In addition, I’d contact A.R.E. (www.retailenvironments.org) and try to have a chat with one of our members about what its like being a member of A.R.E. It is also a huge advantage to be a member of A.R.E. We have profit and compensation surveys, a magazine, networking and supplier website searches for retailers.

Lastly, look at your talent pool – and make sure you have folks that can engineer and manage the extreme volatility of this industry. Retail moves very fast and changes on the dime – your ability to understand this and to manage this as an organization every time is key to success.

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