Small Format Is King
Monday, July 20th, 2020
COVID-19 continues to rock our world with so many uncertainties. What does our future look like? When will there be a vaccine? How long will we live in fear? For those of us in retail marketing, what does the future of physical stores and commerce look like? Even with all the current uncertainties we can count on retail orthodoxies being challenged, and that retail will never be the same.
As COVID-19 continues to sweep the nation, consumer behaviors and tendencies have shifted and are still evolving. For the first time, health and safety expectations are defining consumer/retailer interactions. Demands for convenience are driving even more contactless transactions. As a result, physical retailers are forced to reinvent their strategy to stay relevant or face inevitable extinction.
Over the past several weeks, numerous retailers have been investing in small-format to meet this demand for convenience and contactless transactions.
- Starbucks is closing 400 locations in North America but opening 300 new small-format stores in 2020 as they shift the stores from places to work and socialize to mini-fulfillment centers and pickup points.
- Nike is planning to open between 150 and 200 new smaller footprint stores in North America, Europe, the Middle East and Africa, modeled after the Nike Live concept it’s been testing for the last few years.
- Wegmans is permanently closing The Pub, its in-store bar/restaurant, refocusing their efforts on applying their culinary expertise to the increasing demand for fast, casual meal solutions available in-store for pickup and through delivery.
Dine-in experiences and retailers are pivoting, turning into mini-fulfillment centers and pickup points. There is an apparent need for retailers to innovate their physical space to give shoppers a reason to visit and visit more frequently. So, what should be done now? Consider these three takeaways during your next planning session for 2021:
- Reimagine your space – smaller/more personalized formats and solutions are the key to shopper happiness and the ideal inventory mix
- Localize your strategy to build meaningfulness with your shoppers
- Challenge what you’ve “always done” to meet new consumer health and convenience demands
No matter what stage of COVID-19 we are in, these implications are likely permanent.
Submitted by: Brooke Hollander, Senior Strategist, Integer Los Angeles
Image Source: Unsplash