No one will dispute that format management has historically been a central issue for retailers. Retailers continue to invest heavily to sustain and renew their formats, yet in many cases these efforts fail to deliver the required impact.

Diminishing Returns
Two main factors are causing traditional format renewal efforts to yield diminishing returns. First, like consumer products, retail formats have lifecycles that are largely driven by consumer behaviors and preferences. As consumers' tastes evolve more rapidly, these lifecycles are compressing. In fact, over the past two decades the average single-format lifecycle has fallen from 16 to six years.

Second, renewal costs are rising, due to higher remodel costs per store, increased frequency of remodeling efforts, and greater complexity associated with rolling out quickly across large, diverse networks.

Define, Design, Deliver
Our approach to format strategy and renewal combines new tools, processes, and insights tied to rigorous economics to help retailers reshape their formats based on customer insights, maximize the profitability and speed to market of their format investments, and sustain the lifecycles of their formats through continuous renewal.

Working alongside experts from our Customer Insights group, we use cutting-edge customer research tools and analyses to define which new formats would be most compelling to a retailer's target customers. Next, we help the retailer design the new format, translating consumer insights into all the tangible elements (e.g., assortment, marketing, in-store execution) that will make the format relevant and "shoppable" to drive basket size and conversion.

Finally, we work with the client to deliver the new format, using principles from world-class manufacturing to optimize return on invested capital, staging rollout based on client capabilities and customer acceptance, and hard-wiring organizational changes to drive continuous improvement.