In any retail expansion project, the biggest risk usually starts before construction takes place. It happens during the stage when the store design is actually being converted into a final execution plan.
At first, retailers might not pay much attention to basic changes, like a slight change in the floor plan, a better material selection, or a late update in the electrical layout, as they might look small. However, we cannot ignore the fact that when too many changes, even though they are all small, take place at the same time, they lead to the development of a major problem called scope creep. This automatically indicates that the project requirements keep increasing slowly, unexpectedly, and regularly, further causing an increase in the overall budget, that too, even before the actual construction work starts.
Scope creep in retail is one of the biggest reasons that leads to both budget and timeline overruns. If retailers wish to avoid ending up in this situation, the best way they can adopt is to create and establish a clear handover parameter by designing a unified project model.
The Problem with Traditional Handovers
In a traditional retail setup, brands usually consider hiring retail design agencies to create the design and layout for a new outlet. Once the designs are finalized, they then hand over the project to another contractor for execution and launch.
This is exactly where the problem usually begins. Since the design and operations teams work separately and do not coordinate with each other, the most important details are often misunderstood or missed completely in many cases. The contractor might not have identified it initially, but may find later that some materials used in the design are not available easily in the market. Also, there is a high possibility that a few designs might not match with local building regulations.
When this happens, the entire retail project needs to be redesigned or corrected. This automatically leads to additional charges known as ‘change orders.’ These changes do not just increase the project cost but also lead to a delay in timelines. When retailers opt for this type of traditional system, they experience various issues that mainly arise due to communication gaps between designers and builders. As a result, they end up paying an extra amount for project completion.
Defining Handover Parameters: The Turnkey Solution
In order to avoid any unnecessary budget and timeline increases, it is extremely important for brands to remove confusion between designers and executors. This might seem like a tough task. However, brands can seamlessly achieve this by opting for turnkey project execution. They can simply consider hiring an agency like D’Art Private Limited that centralizes the design and execution work under a single system by handling every retail phase under one roof.
So what are these handover parameters?
If defined in simple and clear terms, handover parameters are fixed, clear, and concise guidelines that define when the project phase is completed and locked. They clearly mention what all is included in the project scope, what all is excluded, and who is actually responsible for costs at every individual phase.
When retail brands ditch traditional approaches and instead opt for turnkey project execution, these handover parameters help them protect the budget in many different ways. Some of the main ones are mentioned below:
1.) Budget Friendly Design from the Beginning
When there is complete coordination between the strategy, design, and execution teams, retailers can practice budget planning from day one of the retail project. In case the hired retail agency suggests an expensive design feature that will cost more initially but will give good returns and prove to be a sustainable choice, the costing team can immediately reconsider their budget and make the required and possible additions. Also, this will help ensure that the final design is not just practical but cost effective as well. Hence, it can be executed without any major changes later.
2.) Fixed and Locked Milestones
Clear handover parameters create strict deadlines due to which various parts of the project cannot be changed easily. For example, it could be clearly stated that once the layout is finalized and approved, neither the retail brand nor the agency will make structural changes without extra costs or penalties. This automatically encourages all teams, including marketing and operations, as well as the retail client, to finalize their requirements early and avoid any unnecessary changes in the middle of the project that lead to an increase in overall costs.
3.) Single Point Accountability
When we talk about traditional models, they seem more like a blame game. Different vendors like manufacturers, installers, electricians, etc., blame each other for any type of design mistakes or delays in store launches. This never gets resolved, as each one of them has some sort of proof that they did their work perfectly; some have screenshots, some have emails, and some show photographs to prove themselves right. This trap bleeds the retailer’s time and money.
On the other hand, when brands opt for turnkey project execution, they actually have a single/dedicated partner that is managing everything. Hence, in case of budget overruns, delay in store launch, or any other issues, they know who to catch. The hired professionals will handle and fix every issue that arises, that too, without playing a blame game or pushing additional responsibility on the retail client.
How Can Retail Brands Apply These Parameters in Their Next Project
If a retail organization wants to avoid any budget surprises in its next outlet expansion project, it is crucial for the project leaders, procurement heads, and operations teams to adequately treat the handover stage between design and execution as an important financial step and not just a routine process. They should start with establishing a clear and detailed scope of work (SOW) that properly explains what all the final operation should include. They should pay attention and invest some time to define concise milestones, finalize designs before the construction stage, and work with a reliable and experienced partner like D’Art Private Limited, which can manage the entire project lifecycle by itself.
By simply creating and establishing clarity before starting with the store execution phase, retail brands can experience various benefits, including better cost controls, a reduction in timeline delays, and complete their retail projects with great confidence and complete peace of mind.