ASG Welcomes Paul Hiers as New CFO
Asset Strategies Group (ASG) is pleased to announce Paul Hiers has rejoined ASG as its Chief Financial Officer. Paul is no stranger to ASG, having co-founded the company more than 25 years ago with Steve Morris. He helped develop the financial and business processes for ASG’s services and was integral to the startup and growth of our industry-leading outsourced lease management service.
“I am delighted that Paul has returned to the ASG family as our CFO,” said Carrie Barclay, ASG’s President. “His desire to re-join us and develop the business is a huge compliment to what we are building.”
“Paul is a good friend. I’m thrilled to have him re-join the team and value the leadership he has always demonstrated,” said Steve Morris, co-founder and CEO of ASG. “His dedication and commitment will be instrumental in helping us achieve our vision for ASG’s future.”
Steel gray pays homage to the brand’s stability as an industry leader for over 25 years, while a vivid reflex blue evokes the energy and optimism of a future-forward outlook. Together, the two primary colors represent a harmony of real-world practicality and possibility. Secondary brand colors, including magenta and red, support a vibrant visual energy and creative passion that drives the brand’s momentum.
“Our new branding reflects our connected services and represents our next stage of growth: delivering holistic real estate and design solutions for our retail customers.”- Steve Morris, Founder & CEO
Thank you to the team at Sketch Blue for their work helping us create this new identity.
Columbus based Asset Strategies Group Acquires Design Agency Chute Gerdeman to expand its retail real estate solutions business.
Asset Strategies Group (ASG) has cleared a path forward to strengthen its strategic real estate solutions business in the acquisition of the leading environmental design agency Chute Gerdeman.
ASG has a nearly two-decade history of providing an expanding portfolio of real estate services to retailers —improving all aspects of real estate decision making and performance. Through its five practice areas it has helped more than 125 specialty retailers strategically plan real estate investments, control costs, streamline business operations, and maximize profit potential.
ASG’s Co-Founder and CEO, Steve Morris said,
“This is the perfect pairing, strengthening our creative solutions with data-driven operational strategy and expanding our implementation practice to deliver everything from prototypes to full execution across a fleet of stores. We’re also happy to play a bigger role in our beloved Columbus community, once again.”
Chief Operating Officer, Wendy Johnson, added,
“This is the perfect pairing, strengthening our creative solutions with data-driven operational strategy and expanding our implementation practice to deliver everything from prototypes to full execution across a fleet of stores.”
ASG President, Carrie Barclay, said,
“Chute Gerdeman is at the forefront of that redefinition through consumer forward design. Combined with ASG’s real estate expertise, we see a clear picture of new retail evolution.”
Has there ever been a more challenging time for retail? Without the business disruption insurance that we lobbied for, we’re seeing more and more retailers forced into bankruptcy. And even as states are in the midst of phased reopenings, the ongoing civil unrest, however justifiable, has made it impossible for some retailers to open as planned. There are more unknowns than knowns – and there’s a lot to unpack. What has become clear, however, is that whatever role you play in retail, the one word you need to remember is flexibility.
Flexibility is our Mantra for 2020-2021
Retailers, landlords, lenders, and consumers – and all the organizations involved in keeping them up and running – must all embrace flexibility. But what does that really mean?
Retailers who survive need to throw their old models out the window. Consumers have changed. The economy has changed. We are not going to be able to predict everything that is going to happen (did you ever once think in January that this is where we’d be in June?).
For a retailer, this means flexibility in your location strategy: pop-ups, regionalization, localization, adapted design, modular design, movable walls to adjust to consumer and operational needs.
Leases and Lending
This also means flexible negotiations with landlords and lenders, because traditional, long-term, fixed deals are not and cannot be the future. While terms have been adapting over the last two years, even more change is going to be required for new retail players. Flexibility tied to performance and structure will be a mandate from those retailers expanding and moving forward.
Customer Service and Customer Experience
Flexibility in service to the customer, whether this means curbside delivery OR curbside return – yes, you read it here: curbside return – will be necessary. Providing delivery options is only one of the simple changes that retailers have to make. The long pole in the tent is a complete overhaul of old processes and procedures as well as systems and devices that both associates and customers use. Retailers have to pivot their strategies in order to address these new customer expectations. Rachel Williamson provides the best guidance here:
- Retailers must start with WHY. It has to be clear to your customers. Many businesses are focused on the WHAT and HOW. WHY is more important and draws customers to your brand.
- Create WOW experiences. While safety is top of mind (and should be for the time being), it cannot replace genuine customer engagement. Sanitizing, masks, and long lines to enter the store must be met with engaging associates who are making the customer feel glad they chose to shop in-store. The experience has to be tantalizing and connect the customer to the brand. The only way this happens is through really thorough training of the store teams. Shortcuts to training means shortcuts in delivery. The customers will feel it and may not come back to shop.
- Communicate to your customers regularly, reminding them about the safety protocols, but more importantly, about the different ways they can connect with your brand. Now more than ever, the online and offline experiences have to be seamless.
- Create a compelling reason for customers to come shopping and then continue to create reasons to return. Covid-19 created a supply chain disruption bigger than we have ever seen. Stores have few fixtures on the selling floor and even fewer products. Get creative on how to make the stores look and feel full.
Flexibility also means streamlining your company’s operations. Before COVID, removing ‘friction points’ was the focus. Now, the new processes designed to keep customers safe have created a new set of friction points for both store teams and customers. Every process that can be automated should be. Examples include labor scheduling, merchandise flow, and performance management, as well as sensor product in the DC or at the manufacturer. Take it off the list of things the stores have to do. The focus in-store must be on delivering customer experiences and exceeding their expectations if brick-and-mortar is to survive.
To be as nimble as possible, retailers should outsource everything that’s not part of the core business so that they can adjust more readily to changes. The future of retail belongs to the brands and companies willing to adapt to this constant state of flexibility – and there is a lot of market share up for grabs.
One of the core lessons learned during the pandemic is that force majeure did not save anyone but the landlords. Landlords – and the lenders behind them that often tie their hands – who refuse to renegotiate or provide any kind of flexibility will end up with empty buildings. The landlords who remain under-standing and flexible will be the landlords who win going forward. Retailers must be able to adjust lease terms to their needs. This can no longer be a negotiation to meet landlord demands. Retailers just can’t afford to do it anymore. Gone are the days of a 10-year, fixed-rate lease. Right now, retailers need leases that offer variable rents with more options; flexible terms are the new norm.
The biggest outgoing is often rent. A number of landlords and tenants have already agreed short-term arrangements, such as rent concessions and deferments to cover the lockdown period. But what happens after lockdown? In a retail landscape where some trading is possible, but not enough to sustain rents at their pre-Covid levels, landlords and tenants will need to collaborate in order for both to survive.
Store Construction and Design Flexibility
Retailers are going to need to be able to adjust locally and build in more regionalization and differentiation; so, there can be no more one-lease-to-fit-them-all or one size stores. National footprints won’t be normalized. Adding flexibility inside the spaces themselves will require flexibility with the landlord for things like movable walls to adjust backroom sizes and selling floor sizes as the stores or consumers demand, with multiple-size footprints and more showrooming for consumers.
“This is a retail renaissance not a retail apocalypse,” said Whitney Livingston, COO, Centennial Real Estate. “For anyone to succeed, all parties need to move out of their comfort zones, and compromise and partner. Companies that are willing to innovate and think outside of the box will help the industry reset and thrive post-pandemic.”
We’re spending all day every day in conversations with landlords. Landlords’ hands are sometimes tied as well. But without more flexibility from commercial lenders, we’re headed for a collapse that will make the housing crash of 2008 look like small beans. We’re already in a worse situation than we were then. It’s going to be ugly.
Final Thoughts on Post-Pandemic Retail Strategies
Consumers may spend less. But even if they spend more, their spending is likely to be different. It will take time to collect data and develop trends, and until then, you’ll need to be able to quickly pivot.
The way forward in 2020 and 2021 is going to require innovation, technology, and data.
Data will be crucial. To get some real perspective on how little retailers know and how crucial data will be for future decisions, read this deep dive, from Retail Dive, on the uncertainty retailers face. From managing cash flow to determining a reopening strategy to making the tough decisions about locations in the coming 6-18 months, you will need analytics more than ever.
“Retailers need to understand that their response to dynamic customer behavior starts and ends with data. We already have an endless supply of data but using it intelligently to make decisions on where and how to invest, and what the customer needs and values, is where we’ve seen traditional retailers struggle.” – Andy Halliwell, Senior director, retail, Publicis Sapient
The future is unknown. But we can begin to build new models now.
Asset Strategies Group (ASG) is pleased to announce the addition of Doug Tilson, who will lead Tenant Representation.
Mr. Tilson brings enormous experience in regional malls, off mall, flagship, and outlet venues in both re-structuring real estate portfolios and executing growth strategies. His in-depth experience in retail strategy will be a huge asset in helping ASG clients maximize the value of their real estate portfolios.
Numbers drive virtually everything, especially in real estate. And no investor wants to establish real estate property if the prospects of success are poor. Before committing to any property development, a real estate investor wants data on business growth rate, the resilience of the economy, population size, tax incentives, and other components that are a piece of any retail real estate lease or contract. However, as the landscape of consumer demands becomes more personal, as well as socially mindful, individual cities are now defining the retail real estate market.
Economic size is only one factor.
Global leaders, such as London, New York, and Tokyo, are noteworthy cities in which to invest. Their sheer size and booming economies result in ambitious growth, accounting for a sizable percentage of global real estate investments. However, the markets are known to be cyclical. It’s a fast-paced environment with a sink-or-swim mentality, and not every business is capable of thriving.
Individual cities have a unique competitive edge.
The cities that are most successful are those that have a distinctive reputation. Size does matter, but it certainly isn’t the only stimulus for achievement in retail. The enterprising mindset of the city itself, regardless of industry, will drive the innovation and unique experiences that consumers want. Peer groups have a significant influence on how a city grows and the retail that thrives, ranging from tourist hubs to entire neighborhoods driven by sustainability practices.
It can be challenging to balance efficiency and innovation, but different cities will demand completely different stores and retail strategies. What functions well in New York City is not guaranteed to launch similarly in Tokyo. A flagship store may do well in the suburbs of Chicago but sink completely in the neighborhoods of Toronto. The demographics of an area can be so specialized that two stores within the same city limits cannot market themselves the same way. Retail real estate must spend less time defining who they are and more time strategizing how they fit into a city’s existing strengths.