- Compared to most other retail products candy is a low-ticket item, often selling for just a few quarters. In-line store spaces in well-trafficked regional shopping centers were leasing at the time for $ 80.00 to $ 120.00 per square foot, including mall maintenance and marketing fees which were obligatory for all tenants. This meant that the lease agreement alone could cost some $ 500K to $ 800K over the typical lease term of 8 years. Of course, personally guaranteed by the lessee to the lessor. And they don’t come cheaper today.
- Such high-value obligations could only be amortized with high sales volumes that had an unusually low cost of goods, by controlled leasing and operating costs and by realistic leasehold improvements. Lease and operating expenses were already established by free market forces and could not be manipulated downwards too much, if at all. However, sales volume, cost of goods and leasehold improvements [store construction], and especially the latter, could be favorably affected by efficient and creative store design, merchandising and management.
- Petersen drew focused inspiration from a famous phrase which had been professionally practiced and popularized by the German-American architect and visionary of minimalist design, Ludwig Mies von der Rohe: “Less Is More”. Mies, as he was called, was one of the pioneering masters of modern architecture and design who enjoyed worldwide renown.
- “Less Is More”, in terms of its retail challenge, meant to generate as much repeat and sustainably increasing people traffic, revenue and profit within a consumer-friendly and inviting brick-and-mortar environment which, on one hand, could accommodate the desired consumer traffic but which, at the same time, limited costs of leasehold improvements and rent obligations.
- The idea was simple while challenging: Customer self-service of a large variety of candy, novelty and gift products merchandised in a modular, stackable and highly space-efficient dispensing system which allowed for the largest count of stock-keeping units, SKU, was the conceptual answer. But could Petersen realize this conceptually and financially? More soon …
Be Unique. Read Sweetique!