Designing and Building a Retail Store for a Professional Sports Team
By Jeff Grant, GRANT Display Owner, President
Since 1990 I’ve been involved in the design and construction of retail team shops, in-line stands and portable cart/kiosks for a variety of teams in both arena and stadium locations. Typically the process of creating the new shop starts with a phone call to our office from the team’s merchandising manager retail director or the concession company running the venue’s retail. In most cases the team either has a store that is under performing or is interested in creating a store for a new facility. Invariably I am asked many of the same questions by each team and the purpose of this article is to familiarize the reader with the process involved in designing and building a new team shop. Here are the most frequently asked questions:
1. Should we build a shop in our arena or just stick with souvenir stands and carts? In my experience a combination of well-placed souvenir stands and a large arena shop will maximize retail sales. In many cases the retail shops/stands in existing arenas aren’t managed by retail pros and, as a result, display and merchandising creativity is either lacking or spotty, store and lighting design is minimal and vendor partnerships are non-existent. When a retailer with experience takes control of the stores they tend to have a better appearance, committed sales help, cutting-edge product lines, and a continuous marketing program that includes player and vendor participation. The bottom line: Hire a retail pro to run the store and sales will increase. So the answer to this question is: Build the shop in conjunction with a series of in-line stands and portable carts, just make sure that whoever runs the retail operation, whether it’s the team or a private vendor, is extremely accountable for the shop’s design, appearance, sales people, product, and profitability.
2. Where should the retail shop be located? Location, location, location is a given in traditional retail planning and an arena or stadium store should take that same advice. In most cases the shops should be adjacent to the primary entryway into the arena. Catch the customer when they enter the arena and when they leave. For instance the Suns, Pistons, Kings, and Mighty Ducks follow this format. In some cases the arena shop may be a little more remote. The Seattle Sonics 3500 square foot store is over 100 feet from the main arena and in inclement weather is reached via a tunnel. With this type of location the merchandise manager simply has to work a little harder to let people know where the shop is. If possible, build the store in the most obvious spot possible and then build drama around the entry with signage and window display.
3. Is the location of the shop’s entrance and exit important? Increasingly I’m finding store lay-outs that have been planned with little thought given to game-day ingress/egress issues. The crowds on game day can be overwhelming and to maximize sales your guests must be able to enter the shop from the concourse and to exit after check out without fighting their way through incoming customers. That requires a well-thought-out traffic plan that covers both game and non-game day operations. The location of the shop and the entrance/exit controls should be determined with the help of both the retail planner and the building architect.
4. How big should the shop be? Most arena shops average about 2500 square feet although the trend is toward larger shops. The Sonics arena shop is about 3500. The Suns have one of the most successful stores in the league and the current shop has grown from 1500 to 3000 to 4500 sq. ft. The Diamondbacks stadium store is 6000 square feet and the Minneapolis Wild store is about 3500. I believe that a profitable arena shop should range from 3000-3500 square feet and a stadium store from 4500-6000. Stores in that size range will allow you enough room to handle traffic flow and feature a merchandise mix that is deep enough to create interest, excitement, and profits.
5. How much will the store cost? There are really three issues involved in costing the store out:
a) The first is construction. What are the costs of the basic systems necessary to provide walls, floor, ceiling, power, lights, heating and air conditioning, sprinklers, plumbing, glazing, etc. The “vanilla shell” that the store fits in to. These prices will vary based on local conditions and pricing, however, a good national rule of thumb is approximately $100-150 per square foot
b) The pricing on the fixtures can also vary widely depending on finish, size, complexity, etc. The basic fixtures will include several counters, wall merchandising systems, and floor display fixtures and racks. These can be purchased via catalogs as off-the-shelf fixtures at very reasonable prices or customized and provided by either local millwork suppliers or national fixture builders. Most of the teams we deal with are investing in a new arena and cannot afford to use “low end” store fixtures, The displays must tie in to the arena from both a finish stand point and a quality level, so typically the fixtures are “custom” built. That doesn’t mean that economies can’t be realized through value engineering; however, it does mean you have to be careful how the fixtures are designed so that prices can be kept in line.
Typical pricing to outfit a 3500 square foot store with good quality fixtures will range from $75$150 per square foot of shop space. The high end of that range has much to do with complexity of the design, overall quality, higher local pricing and smaller shops costing more per foot (the front counters are expensive and amortize out on larger shops).
c) The fluff can add more to costs then anything else. Video walls, sound, props, graphics, neon, signage, signed memorabilia, interactive displays, all the fun exciting, interesting things that make the store a “must stop” place to visit can impact the bottom line cost more then any of the other build-out or fixture elements. They also will do more to extend your guests’ experience and increase sales then any of the first two elements. Pricing will vary widely from vendor to vendor so any of the larger display elements should be shopped carefully. Costs can be reduced by structuring partnerships with sponsors who can provide many of the graphic and audio/video components. Without sponsors it is very easy to spend anywhere from $50,000 - $150,000 on the “fluff” portion of the shop.
Keep in mind that the regional nature of labor costs may impact all of your projections. Further, perceived team “deep pockets,” union labor and shortened time lines can be a issue and in some cases we’ve seen prices as much as 33% higher in certain regions as a result of these factors alone.
I encourage my clients to get the basic shell costs quantified very early in the game so that a reasonable budget can be given to the designer for fixtures and “fluff.” Once the shell costs are defined the designer can work with the team to define the cost/sales/fixture/fluff relationship so that a budget can be set.
How important is it to add ”high end excitement”? Frankly, I’m not convinced that extensive bells and whistles are necessary within the store. My experience has been that a well merchandised store with attractive, flexible fixtures and interesting graphics coupled with a few props and a reasonable amount of audio video is more then enough to generate interest and sales.
7. How do you get the most bang for our buck? Whether your budget is $200 per square foot or something much less, to maximize the store’s potential you should:
a. Work with experienced store designers who have built stores before. Bring them in to the process early in the game and have meetings early on between the architect, the general contractor, the owner’s representative and the merchandise managers. It’s important that the owner’s vision of the store is realized and that the budget allocation for the vision is All the players will have to be on the same page to accomplish that goal.
b. Simplify the decision making process early in the game. Numerous meetings and a tedious approvals process will slow the project down and add costs.
c. Work very closely with a millwork and fixture supplier on price, design and value engineering. Further, it may be advantageous to pull those elements out of the General Contractors scope. The contractor will add 10-15% on to the price of these items and you will save a like amount if you deal direct.
d. If you are creating an arena shop, hit your vendors and sponsors hard. The major sporting goods manufacturers have money set aside for retail support. Trade in-store vendor graphics for both merchandise and construction dollars.
e. Try to get the design process finished early in the game so that bids can get out early. The major variable in the costs involved in building the store will be the fixtures and fluff. Bidding these items carefully can take several weeks. If you have to rush the process your vendors will tend to err on the “high” side in their price quotes.
f. Have an experienced store planner/builder review the pricing on every element. They should have enough history to understand, prices, timing, quality and “apples to apples” bids.
g. Don’t select a contractor or fixture supplier based solely on price. Look for experience and check references.
8. How much will the design fee be? In most cases there are two facets to the fee. First is the store designer who actually conceptualizes the store, the displays, the colors, finishes, lighting, merchandising format, etc. Second is the architect who creates the working drawings. In most cases involving a new venue the designer simply works in concert with the existing building architect as part of a collaborative process that converts the designer’s drawings into a bidable plan set that “synchs” easily with the overall building plans. As a rule of thumb a retail designer will bill out at around $150 per hour and an architect at $125-$175. For a 3000 square foot team shop that costs $250,000 -$350,000 to build, a competent designer will charge from $25,000-$35,000 as a design fee. The architectural fees for drafting the plans will range from $20,000 to $30,000 depending on the amount of detail required by the facility and by the drawings being produced by the designer. Typically the larger the store, the higher the budget and the more “fluff” and graphics involved, the higher the designers fee will be. Further, if project management and/or quality control is passed to the designer the pricing can increase significantly. It’s important to clarify the scope of the architect and the designer very early in the game to prevent overlap and to avoid over billing.
9. How long will it take? Several years ago we helped design and build an arena shop for the Utah Jazz in four weeks because they had to get open and they were able to make decisions very quickly. Most retail planning and construction projects are a little more protracted however, as long as everyone moves forward without dragging their feet, the process should look something like this:
Week 1-2 Interview and hire a store designer Interview and hire an architect to draft the blue lines
3 Establish a budget for design and construction and set up the basic criteria for the shops look, feel and merchandise.
4-7 Create and gain approval on the shops design
8-11 Draft millwork drawings and graphics/Draft architectural blue prints
12-14 Submit plans for permits, let plans out for bid, select the contractor
15-21 Build the store shell
21-22 Install the millwork, graphics, fixtures, props
23 Merchandise the store
Can all this happen more quickly? Of course, however, the more complicated the store, the longer it will take to design and build. To finish the store on time we suggest you set guidelines early for drawing due dates and get drawing approvals promptly so the designers and architects can move forward.
10. Will we make money? Yes, if you do everything right. I’ve been involved in store design and construction since 1981, and the elements I see that are necessary for retail success include the following:
1. The right concept: You can’t be just like everyone else. Create a special store.
2. The right owners: Interested, enthusiastic, visionary.
3. Enough money: It’s hard to be successful on a shoestring.
4. A great location: Pick a winning spot.
5. Great product: Current, innovative, exciting, different!
6. Great sales people: Enthusiastic, knowledgeable, sports oriented, team players
7. Competitive prices: You don’t need to be a discounter. Just be competitive.
8. Consistent and creative advertising and PR: Never stop promoting the store.
9. A well designed, constantly evolving shop: Start with a great design, keep the store changing.
If you follow these rules, and if your team is appreciated by the fans, (read: “Winning games.”) then, yes, your shops will make money.
One thing further: Get all the experienced help you can find. Shanghai managers from local sport shops. (Particularly chain stores with management training programs.) Hire retail operations consultants if you need help with buying and administering the stores. If you don’t have experience in retail, you may not know what you don’t know and the learning curve tends to be very steep (and expensive). Finally, and most important, strive to make your store something special. A favorite experience for your customers and an essential element in promoting your team.