Jumbo's shopping spree

Cencosud S.A. builds on a big scale. The Buenos Aires, Argentina-based company develops malls anchored by its own chain stores, including the appropriately named Jumbo, which operates in Argentina and Chile. The super-sized hypermarkets, known for their elephant mascot, average 125,000 sq. ft. to 160,000 sq. ft. in size. The Jumbo hypermarket integrates a supermarket with a warehouse store carrying a wide range of hard and soft lines, from hardware to apparel.

When Cencosud was ready to redesign Jumbo, it turned to another giant—Toronto-based Watt, a large retail-oriented brand strategy and design company. Cencosud had previously worked with International Design Group (IDG), which was acquired by Watt. From there, it was a natural transition to bring on Watt designers. "The prime focus for us is the U.S. market, but electronics allow us to work anywhere in the world," says Niels Bjerno, vice president, retail client services.

The Watt team flew to Jumbo headquarters in Buenos Aires for two meetings before signing a contract, discussing how to add value in repositioning the chain's business for success. "We developed an observations and opportunity report," says Bjerno. "Then they signed a contract with us for development of an ideal model concept showing how to redefine their experience for the customer." Jumbo commissioned research from a local company, and Watt then funneled the information into creating a strategic plan. "We wanted to expand their customer base at the top and bottom ends, to make them a little more attractive to a higher-income customer as well as younger families just starting out," says Bjerno.

The Watt designers had intense working days while visiting Argentina. "We had daily meetings with their designers that would go on for 10 to 12 hours," says Richard Garvin, vice president, retail creative. "That's typical down there." The South Americans were eager to learn. "Clients want to know everything and they love the information we can offer," adds Lou Ceccato, creative director, graphics. "They gave me a barrage of questions. They don't have the money to travel, so we were a link to the outside world for them."

To survey Jumbo's competitors, the Watt team visited hypermarkets in Buenos Aires, which helped them gain a solid understanding of the market. "We remarked on how wide the aisles were—at least 12 ft. wide," says Ceccato. "At first we went during off-peak hours, and we didn't understand the need. Then we went during busy hours and saw the stores packed with customers. When a family goes to shop, it's the whole extended family. The store is pumping Ricky Martin music at full blast, and the energy is high. Some stores average 50 to 70 checkout lanes and every checkout is working." Watt went across the Atlantic to complete its research. Upon learning that Carrefour was planning to introduce a new prototype in South America, Watt sent staff from its Stockholm office to visit a Carrefour facility in southern France.

As a chain belonging to a major developer, Jumbo has a full design and construction department in-house employing several architects. Watt worked with this team, but first started at the top. "At the beginning of the project when we were developing strategy, we worked with the general manager of Jumbo, Stephan Krause, who runs operations on both sides of the Andes," says Bjerno. "What we typically find in repositioning is that we need to get the most senior people to buy in and align the organization. Once we got past that, we worked with the operational people, with the key person being the architect Juan Sieburger."

Jumbo decided to implement the new design in a store at Mendoza in the wine region of Argentina. "That condensed our timeline in getting a new store completed," says Bjerno. "The project was under construction when we joined it. All the architectural drawings were done and approved. Footings were going in when I first visited." The Mendoza store has a total area of 142,500 sq. ft. and a sales floor measuring 100,000 sq. ft. "Unfortunately, we couldn't effect change to the floor plan and the back room adjacencies," says Garvin.

Watt designed the interior layout to engage the customer first in the higher-margin products and continue to pull them through the entire store. "You engage the customer to expose them to as much of your product offering as you can," says Bjerno. "As they shop for food, you're going to take them back into health and beauty, and that takes them back into fashion."

Fixtures and materials in the store are designed to withstand the punishment of much heavier levels of traffic than American retailers experience. "We use stone agglomerate floor tile to stand up to huge amounts of population pushing carts," says Garvin. "The traffic is staggering. Predominately throughout the store we use a steel gondola racking system with some wood fixturing in home décor. In cosmetics, the fixturing goes to a heightened level of taste." For fixtures, Jumbo prefers the styling offered by European vendors. Nothing specified for the store was sourced from North America—everything came from European or South American vendors.

A new tag line for Jumbo emerged from the repositioning effort: "Más de la mejor por menos," or "More of the best for less." For the Mendoza store, the tag line and department identifying names were emblazoned in a unified type style on signs in a variety of bright colors.

Large-scale photos are used on the interior signage to heighten interest in departments. "We had priced out the environmental photography," says Bjerno. "At the eleventh hour Mr. Krause decided he didn't want to pay for stock, so Lou went down to shoot." The photo shoot was unconventional by North American standards. "I got a flight to Santiago, Chile and shot 32 photographs in three days," says Ceccato. "I had a crew of people running around in a converted garage with five sets going at once and only one camera. For the final shot, I had to go to the airport, and we only had time to clear the floor, throw crushed ice on the cement, put fish on it and shoot it from a ladder."

The Mendoza store was completed at a cost of $30 per sq. ft. "As a business it has succeeded," says Bjerno. "They've increased their sales by getting more income from the existing customer profile, attracting people to shop longer and buy more things. They have also increased the breadth of who they can attract, including the well-heeled customer and the younger family that aspires to shop at Jumbo." The features seen at Mendoza have been rolled out without change in two additional stores, with a third store currently under construction.