Making Rollouts Successful
Retailers gain competitive edge by looking beyond bricks and mortar with general contractors.
Steve Smith

Steve Smith

Successful retail rollout campaigns, also known as prototype programs, result in considerable efficiency and economic benefits; however, the raised interest in such programs means it’s increasingly difficult to gain a competitive edge by being faster, smarter and cheaper — the goal of every retailer.

In today’s competitive retail construction environment, the success of a rollout campaign is more than just bricks and mortar. Success depends on a retailer’s ability to balance budgetary constraints with intangible factors — such as speed to market, depth of experience, reputation and process — that differentiate the lowest bidder from the best bidder. Selecting the best rollout project team is essential as the contractor will play a critical role in generating significant short and long term savings for the retailer.

Trader Joe’s sought Leopardo’s rollout expertise for 11 stores in Illinois and Michigan.

Process

General contractors do much more than just build the store. By partnering with a general contractor early, the retailer will reduce in-house coordination and administration, and will be able to minimize staffing and redirect resources to other essential retail business functions. Additionally, teaming up early with the contractor will prove positive on the front-end economics of the rollout as the construction experts can assist the retailer in evaluating the cost and schedule-related implications of future sites.

Leopardo delivered Apple stores in Michigan, Minnesota, Indiana, Illinois and Missouri.

In larger rollout campaigns, it’s critical to anticipate potential road blocks such as special-use permits, utility connections, and equipment/material with long lead times. There should be dedicated pre-construction teams that pinpoint those items early in the rollout process, submitting the applications and orders early to avoid waiting or delays. The contractor will take a lead role in expediting the submittal of permit applications, utility agreements and procuring long lead items in order to maintain the overall schedule.

Experienced rollout contractors will have a seasoned team of rollout-proficient project managers, estimators, superintendents and subcontractors. Project managers and estimators are well-versed in managing multiple locations while superintendents and subcontractors roll from one store to another with the enhanced ability to understand and communicate with the team the sensitivities that are unique to the rollout project. The team becomes intimately familiar with the client’s needs and the “group mind” results in a successful rollout road map. Superintendents schooled in the art of rollouts will provide valuable feedback and solutions to address the challenges that will inevitably surface on every construction project and eliminate bumps in the road for a smoother and ultimately expedited completion of projects. They naturally push an accelerated schedule, ensure the highest quality and play an integral role in meeting and exceeding retailer expectations.

Prototype programs also require effective communication and extremely good organizational capabilities. A well-structured systematic process helps eliminate opportunities for errors and keeps project tracking reliable for real-time retailer updates.

Materials

Leopardo built 17 CVS/pharmacy’s throughout the Chicagoland area.

Material availability and costs are even more important today for several reasons, including large-scale natural disasters in America and abroad, war, soaring oil prices, and foreign growth and demand in countries like China, India and Mexico. Many construction materials, including steel, petroleum-based products, gypsum, copper, aluminum and concrete have seen substantial double digit increases over the last 12 months and some industry economists anticipate greater spikes throughout the remainder of the year and into 2007. As a result, lead times for many of these materials have been significantly affected.

With all stores in a rollout program designed and built with the same materials, general contractors quickly develop a familiarity with the construction products, which saves time and translates to faster schedules and cost savings. They are also able to determine comprehensive costs and usage figures and, with the contractor’s proper planning and negotiating, retailers will benefit from bulk and wholesale pricing.

A general contractor’s intimate knowledge of today’s construction marketplace will optimize material and labor line items, and practically eliminate usual delivery delays and short staffing of projects.

Relationships

Healthy on-the-ground relationships are essential for successful retail rollouts. Relationships with employees, clients, subcontractors, municipalities, vendors and suppliers are all important.

Leopardo Construction helped Washington Mutual build 80 banks within 2 years.

Additionally, retailers often bring their own service vendors to the table for tasks like installing phone, security, POS and data systems. While this is not necessarily part of the construction, it requires careful coordination by the contractor on the front end in order to provide a seamless transition to installing the final product.

Smart contractors are in tune with all the intangibles that play a critical role in successful construction, whether it is rollout related or not. Retailers will benefit significantly from contractors who have established professional working relationships and a reputation of providing quality work with building inspectors and code enforcement officials.

When dealing with local economic development zones, such as enterprise zones and TIF districts, knowing the document requirements and protocol at the appropriate government agencies can greatly benefit the retailer.

Additionally, maintaining relationships with key suppliers will help prevent retailers from suffering through supply shortages and also identify cost fluctuations. Plus, suppliers are more likely to go the extra mile for those contractors with which they have long-standing professional relationships.

The same principal applies to labor and subcontractors. Contractors with depth in the market will have a much easier time obtaining and retaining high quality labor. And while contractors manage a portfolio of dozens of subcontractors, most that specialize in rollouts have a shortlist of players who have proven they have the right stuff for rollout projects. By packaging contracts and awarding multiple locations, loyal subcontractor teams will give the general contractor and retailer the best possible pricing and scheduling. Furthermore, they will have additional incentive to provide their best work and service as they will want to secure their role for future projects.

Placing a high priority on building relationships gives the contractor the ability to consistently deliver the highest quality construction while gracefully navigating aggressive schedules and budgetary constraints. For rollout programs, this ability can often be a major determining factor in a successful campaign and help give the retailer an upper hand.

There are thousands of components to a successful retail rollout, but retailers who pay close attention to the construction elements of process, materials and relationships, and recognize the valuable role of the general contractor partnership will gain a competitive edge in a crowded market.

Steve Smith is vice president of the retail group at Leopardo Construction, a construction services firm with 20 years of rollout construction experience. The company has done rollout programs for Apple, CVS, National City Bank, Trader Joe’s and Washington Mutual.