Photo: Jerry Azarkman, president of Star World
A new retailer aims to blend physical retailing with e-commerce — and to do it with Latin flair. Star World made its debut in October, opening a two-level 30,000-sq.-ft. store in Huntington Park, California. The new concept is the brainchild of veteran retailer Jerry Azarkman, formerly with (and co-founder of) Curacao, a Los Angeles-based department store targeting Hispanics.
Designed to offer the convenience and selection of online retail in a physical environment, Star World caters to the Latino market. It combines a futuristic environment with a high-tech business model that digitally extends its aisles into the warehouses of its suppliers via interactive in-store kiosks. It’s a model that translates into low overhead for the fledging enterprise.
The merchandise mix is heavy on consumer electronics, furniture and appliances, and includes packages that combine items, such as a sofa and television. The store also carries cosmetics, fragrances, jewelry, watches, sunglasses and seasonal items. Although the company intends to start slow out of the gate, it has plans to ramp up significantly once it gets going.
Chain Store Age editor Marianne Wilson spoke with Azarkman, president of Star World, about his new retail concept.
[quote-from-article] How did Star World originate?
The concept originated from my 38 years experience in retail seeing the shopping trends first hand over the last few years. I could see the challenges coming from ecommerce, smart phones and acculturation, so I set out to build a retail concept that would take these factors into consideration.
We’ve established a new model that reduces the cost of doing business. It utilizes technology to meet the price levels of ecommerce. In some ways, our model mirrors ecommerce but it also keeps the excitement and fun of visiting a retail store and window shopping.
Star World is a hybrid of brick-and-mortar and e-commerce with Latino sensitivity.
Star World is divided into three basic areas: technology, home, and fashion. Is the store space equally divided among the three?
The store space is distributed into departments displaying furniture, home group appliances which due to their larger size take up more space, as well as space for small and medium appliances. Our technology department includes TVs, audio, computers, cameras, and electronic games. Less space but with lots of variety, since they are smaller in size, are departments that feature cosmetics jewelry, watches, and gifts. We also include a section for seasonal merchandise.
How would you describe the overall price points?
We are lowest in the market because we keep our overhead low by integrating lots of technology into our inventory, sales and delivery process. Our “World of Click” kiosks offer a hybrid shopping experience. Shoppers can make purchases via the kiosks that connect directly to vendors. We save because we do not have warehousing costs and the consumer can get their merchandise faster.
Approximately how many skus are physically on display?
I would say about 10,000. But there over 500,000 via our “World of Click” kiosks.
Who is your main competition?
We believe we are the first retailer with this concept in our space. Nobody else that I know of offers this concept in retail technology. I think I read that Wal-Mart is gearing up something similar for 2019. Right now we can show a tremendous variety of product, 500,000 skus, with more than 2 million skus by end of year in small 30,000 sq. ft. store.
Approximately how many kiosks are in the store?
We currently offer 16 kiosks in the store where shoppers can view and browse merchandise from any store department, not only the one in which they are in.
Are the kiosks located in all departments and do they display items for all merchandise categories or only select ones?
Yes, and they can view merchandise from any store department. Additionally we will offer international purchases within a couple of months offering shoppers the service to send merchandise to other countries including Mexico and Central America. Star World will be able to arrange direct delivery in those countries. We are also partnering with UPS for shipping of smaller items and shoppers will be able to see shipping charges at the point of purchase.
In total, about how many skus can be accessed through the kiosks?
By the end of January, 500,000. And by the end of the year, 2 million.
How does the kiosk technology work? Can the customer make the sale at a kiosk?
Customers may browse any department on the kiosks and have the option of using their own email to create an account. Once they have added items to their shopping cart, a sales associate with a portable device will enter the customer’s email into the device and all the info pops up to either complete the sale or make a credit application.
How is Star World targeting the Hispanic market?
With our intimate knowledge or this market, we are strategically using a number of channels to reach and engage our target audience through advertising on TV, radio, print, direct mail, cell phone marketing, and social media, including Facebook, YouTube, Instagram and more.
Do Star World’s credit options differ from most other retailers?
Star World’s has developed its own credit scoring system in order to charge the lowest rates. Our experience in this market permits us to be more tolerant and offer flexible options.
What are the company’s expansion plans?
For 2016, we are working on a 30,000-sq.-ft. store in Oxnard, California, and we are looking for locations for additional stores in area cities. We are also looking for retail spaces in the 5,000-10,000 sq.-ft. size because our “World of Click” kiosks will provide the same vast selection as 30,000 sq. ft. store.
Do you intend to target markets outside of California?
In the future, we plan to target markets outside of California. However, currently we have identified the potential for 160 locations in California
Will Star World have an online commerce component?
Yes, the kiosks will make it easier to go to e-commerce and customers will have the options of sending their purchases to their homes or the store for pick up.