Gone are the days when every company in the retail industry aimed at opening a chain of big-box stores with a space of 110,000 plus sq. ft. offering a wide range of products cheaper than other retail stores, aimed at providing a one-stop shopping experience to the consumers and encouraging them to purchase in bulk to save money. The big-wigs of retail and consumer packaged goods (CPG) industry such as Target, Wal-Mart, and Best Buy are now taking the path less trodden, literally. These players have joined the latest trend that has taken the retail industry by storm, everyone’s going small – it’s the new big.
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The “Smaller is Better” Philosophy
The idea of a giant big-box retail industry foraying into the small format stores was something that no one predicted, but today, retailers have begun devising new strategies owing to the ever-changing preferences and shopping habits of consumers. “Why go Small?”, You ask. Here’s why,
Small format stores help the retail industry venture into space-constrained and overly populated urban areas with little or no competition and
It helps the retail industry tackle the online competition on various facets such as product assortment and variety, convenience, and delivery time.
Smaller stores are also expected to yield higher sales per sq. ft. and an increased footfall.
These stores can be used to mirror the local needs of customers, with product range and assortment tailored specifically to the demographics of that area.
Small Stores – What’s in it For You?
For decades, the retail scenario in the Americas has been dominated by big-box store giants, but there has been a slow and gradual shift towards the so-called smaller footprint stores. For the consumers, this reeks of higher ‘convenience’ and ‘accessibility. It means more locations closer to where the consumers are present, thereby translating into a much faster and convenient shopping experience for all. The small-store format is a promise of a quick and easy experience to cajole the consumers to actually make an effort to visit a physical store.
The Big and Small of Everything: Retail Industry Driven by Data
In nearly a decade from now, customers will outgrow the ‘one-size-fits-all’ approach of mass and big-box retail and gradually start seeking smaller stores that will cater to their individual needs. Thereby making data and insights the secret ingredient for retail success. In order to know their customers and deliver a unique and worthy shopping experience, the retail industry needs to make use of market and customer intelligence that will help them to tackle challenges and achieve growth, innovation, and operational efficiency. The retail industry needs to assess the competitive landscape and identify the most profitable customer segments and demographics in order to take the big plunge.
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