design:retail - April 2017 - 38

shopping with paco

038

Supply Chain
Reinvention

PACO UNDERHILL
CEO & FOUNDER
ENVIROSELL

p.underhill@envirosell.com

H

OW DID WE GET ourselves into
such a retail train wreck? Whole
Foods, Macy's, The Limited, Wet
Seal, BCBG-the litany of retail
bad news seems endless. We need
change, and much of American retail senior
management seems unwilling to face the future. The talk about technology and in-store
experience is getting tiring. How much of it
is relevant to someone trying to run fleets of
the stores? Sell lipstick where margins can be
more than 3,000 percent of manufacturing
cost and you can afford to do things differently.
But if you sell laundry soap, bottled water, underwear or lunch boxes, well then you've got
to be more creative. What luxury can afford
to try and what mainstream merchants can
implement are different.
Engineering cost out of the supply chain has
been a major factor in retail's ability to overcome the negative income growth of middle
class Americans over the past 15 years. Shifting production to lower-cost suppliers, better
distribution and inventory control systems
have all been critical to controlling retail costs.
The one place where cost cutting has not won
victories has been on the floor of the store itself.
Stocking shelves is still a 19th-century job. The
union of product, shelf, fixture and physical environment is crying for reinvention. What the über
discounters (and the only U.S. merchants with expansion plans) have done is shorten the distance
and cost from the back of the truck to the floor of
the store. Their primary tool? A box cutter. I slice
the box; the box goes on the floor. Brown cardboard animated by faux hand-lettered signage.
ALDI and Lidl have adapted. In 2017, we need to
examine how goods are packaged and sent, and rethink that packaging: can it have a secondary use?
What if goods came on a shelf rather than a box?
The shelf could be hung and then recycled back for

APRIL/MAY 2017

DESIGNRETAILONLINE.COM

restocking. With a tilt, cans, boxes and goods could
slide into position.
Years ago, I visited one of America's largest
co-packers in Charlotte, N.C. It was six football
fields under one roof, and the owner made his
way around his expansive shop on a Schwinn bicycle. What is a co-packer? It is a business that sits
between the consumer goods manufacturer and
retailer. How does it work? A battery company,
for example, takes an order from Walmart for
$50 million in batteries. The battery company puts
out those batteries of various sizes in a limited
number of pack sizes. The packages are designed
to fit on the shelf, or be hung on a peg wall. But
Walmart wants them in 18, 24 and 36 packs, and
they want them integrated into display units that

GLOBALSHOP.ORG

they can take off the back of truck with a forklift and place on the floor-and since there are
12 pricing zones across the country, the pricing
on each unit has to match the zone. The display is shrink-wrapped and, once placed on
the floor, opened with a box cutter. The beauty
of the co-packing factory is that it's built to
produce displays that fit on a pallet. It is specialized and generalized at the same time. How
much of the store could be based on palletized
display units? Can you see the connection?
Speed and ease are the beauty of the modern
pop-up store. Getting to that simplicity of component parts has driven not only pop-ups, but
also the explosion of tradeshow booth design.
A modern tradeshow booth is designed to last
two years and maybe be put up and knocked
down a dozen times. It is discarded less based
on wear and tear than the need for something
new and different. Pop-ups and tradeshow
booths all travel in easy-to-assemble pieces,
and are transported in the back of a truck.
Modern retail is ripe for breakouts. The silos of package/fixture/store design need to get
broken up or better integrated, or matters will
continue to get worse. How does design fit into an
operating culture? Whether it's shelf stocking, or
simply the ease of keeping the store clean, we can
surmise that this integration may be technologically
driven, but as a means, not as an end. The answer
isn't the gizmos we have on the floor, but the gizmos
that get us to the floor in the first place. It is a form
of reverse engineering, where we start at the point
of sale and move down the supply chain rather than
up. This magazine's readers and advertisers sit at the
epicenter of the problem-it is ours to solve.
PACO UNDERHILL IS THE FOUNDER OF ENVIROSELL AND AUTHOR OF
THE BOOKS "WHY WE BUY" AND "WHAT WOMEN WANT." HE SHARES
HIS RETAIL AND CONSUMER INSIGHTS WITH DESIGN:RETAIL IN THIS
BI-ISSUE COLUMN.

Illustration by WEB ICON/SHUTTERSTOCK


http://www.DESIGNRETAILONLINE.COM http://www.GLOBALSHOP.ORG

Table of Contents for the Digital Edition of design:retail - April 2017

design:retail - April 2017
Contents
Editor’s Note
On Trend
We Love This!
Designer Picks
Clicks & Mortar
Mingle
Have You Heard?
Ask Judy
Shopping with Paco
2017 Markopoulos Award Winner
40 Under 40
Foot Locker
GlobalShop 2017 Roundup
ICFF Products
Backstory
design:retail - April 2017 - Intro
design:retail - April 2017 - CT1
design:retail - April 2017 - CT2
design:retail - April 2017 - design:retail - April 2017
design:retail - April 2017 - Cover2
design:retail - April 2017 - 1
design:retail - April 2017 - Contents
design:retail - April 2017 - 3
design:retail - April 2017 - 4
design:retail - April 2017 - 5
design:retail - April 2017 - Editor’s Note
design:retail - April 2017 - 7
design:retail - April 2017 - On Trend
design:retail - April 2017 - 9
design:retail - April 2017 - 10
design:retail - April 2017 - 11
design:retail - April 2017 - 12
design:retail - April 2017 - 13
design:retail - April 2017 - 14
design:retail - April 2017 - 15
design:retail - April 2017 - We Love This!
design:retail - April 2017 - 17
design:retail - April 2017 - 18
design:retail - April 2017 - 19
design:retail - April 2017 - Designer Picks
design:retail - April 2017 - 21
design:retail - April 2017 - Clicks & Mortar
design:retail - April 2017 - 23
design:retail - April 2017 - Mingle
design:retail - April 2017 - 25
design:retail - April 2017 - 26
design:retail - April 2017 - 27
design:retail - April 2017 - 28
design:retail - April 2017 - 29
design:retail - April 2017 - Have You Heard?
design:retail - April 2017 - 31
design:retail - April 2017 - 32
design:retail - April 2017 - 33
design:retail - April 2017 - Ask Judy
design:retail - April 2017 - 35
design:retail - April 2017 - 36
design:retail - April 2017 - 37
design:retail - April 2017 - Shopping with Paco
design:retail - April 2017 - 39
design:retail - April 2017 - 2017 Markopoulos Award Winner
design:retail - April 2017 - 41
design:retail - April 2017 - 42
design:retail - April 2017 - 43
design:retail - April 2017 - 44
design:retail - April 2017 - 45
design:retail - April 2017 - 40 Under 40
design:retail - April 2017 - 47
design:retail - April 2017 - 48
design:retail - April 2017 - 49
design:retail - April 2017 - 50
design:retail - April 2017 - 51
design:retail - April 2017 - 52
design:retail - April 2017 - 53
design:retail - April 2017 - 54
design:retail - April 2017 - 55
design:retail - April 2017 - Foot Locker
design:retail - April 2017 - 57
design:retail - April 2017 - 58
design:retail - April 2017 - OICover1
design:retail - April 2017 - OICover2
design:retail - April 2017 - OI1
design:retail - April 2017 - OI2
design:retail - April 2017 - OI3
design:retail - April 2017 - OI4
design:retail - April 2017 - OI5
design:retail - April 2017 - OI6
design:retail - April 2017 - OI7
design:retail - April 2017 - OI8
design:retail - April 2017 - OI9
design:retail - April 2017 - OI10
design:retail - April 2017 - OI11
design:retail - April 2017 - OI12
design:retail - April 2017 - OI13
design:retail - April 2017 - OICover4
design:retail - April 2017 - 59
design:retail - April 2017 - 60
design:retail - April 2017 - 61
design:retail - April 2017 - GlobalShop 2017 Roundup
design:retail - April 2017 - 63
design:retail - April 2017 - 64
design:retail - April 2017 - 65
design:retail - April 2017 - 66
design:retail - April 2017 - 67
design:retail - April 2017 - 68
design:retail - April 2017 - 69
design:retail - April 2017 - 70
design:retail - April 2017 - 71
design:retail - April 2017 - 72
design:retail - April 2017 - 73
design:retail - April 2017 - 74
design:retail - April 2017 - 75
design:retail - April 2017 - ICFF Products
design:retail - April 2017 - 77
design:retail - April 2017 - 78
design:retail - April 2017 - 79
design:retail - April 2017 - Backstory
design:retail - April 2017 - Cover3
design:retail - April 2017 - Cover4
https://www.nxtbook.com/nxtbooks/designretail/20200708
https://www.nxtbook.com/nxtbooks/designretail/20200506
https://www.nxtbook.com/nxtbooks/designretail/20200304
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https://www.nxtbook.com/nxtbooks/designretail/20191112
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https://www.nxtbook.com/nxtbooks/designretail/20161112
https://www.nxtbook.com/nxtbooks/designretail/201610
https://www.nxtbook.com/nxtbooks/designretail/201609
https://www.nxtbook.com/nxtbooks/designretail/201608
https://www.nxtbook.com/nxtbooks/designretail/201607
https://www.nxtbook.com/nxtbooks/designretail/201606
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https://www.nxtbook.com/nxtbooks/designretail/201603
https://www.nxtbook.com/nxtbooks/designretail/201602
https://www.nxtbook.com/nxtbooks/designretail/201601
https://www.nxtbook.com/nxtbooks/designretail/20151112
https://www.nxtbook.com/nxtbooks/designretail/201510
https://www.nxtbook.com/nxtbooks/designretail/201509
https://www.nxtbook.com/nxtbooks/designretail/201508
https://www.nxtbook.com/nxtbooks/designretail/201507
https://www.nxtbook.com/nxtbooks/designretail/201506
https://www.nxtbook.com/nxtbooks/designretail/20150405
https://www.nxtbook.com/nxtbooks/designretail/201503
https://www.nxtbook.com/nxtbooks/designretail/201502
https://www.nxtbook.com/nxtbooks/designretail/201501
https://www.nxtbook.com/nxtbooks/designretail/20141112
https://www.nxtbook.com/nxtbooks/designretail/201410
https://www.nxtbook.com/nxtbooks/designretail/201409
https://www.nxtbook.com/nxtbooks/designretail/201408
https://www.nxtbook.com/nxtbooks/designretail/201407
https://www.nxtbook.com/nxtbooks/designretail/201406
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https://www.nxtbook.com/nxtbooks/designretail/201403
https://www.nxtbook.com/nxtbooks/designretail/201402
https://www.nxtbook.com/nxtbooks/nielsen/designretail_201401
https://www.nxtbook.com/nxtbooks/nielsen/ddi_20131112
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201310
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201309
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201308
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https://www.nxtbook.com/nxtbooks/nielsen/ddi_20130203
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https://www.nxtbook.com/nxtbooks/nielsen/ddi_20121112
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201210
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201209
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https://www.nxtbook.com/nxtbooks/nielsen/ddi_201110
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201110v2
https://www.nxtbook.com/nxtbooks/nielsen/ddi_201109_v2
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