Smaller stores have become increasingly popular with retailers as many retail stores have had to permanently close their doors, while many others have struggled with reduced traffic, lower sales and layoffs.
Microbusinesses have also found space for their wares through holiday markets and other marketplaces. These smaller retailers are finding a way to thrive amid the changes brought on by the pandemic and the convenience of online shopping.
Placer, which provides location intelligence and footfall insights, released a report on how smaller stores can help retailers target specific audiences, experiment with new brand concepts and maximize reach while minimizing overhead.
Let’s take a look at the retailers who are succeeding with small stores and the lessons learned from the report published by Placer.
smaller and smarter
Smaller store locations mean lower rents, fewer employees, and less inventory—and overall, that means lower overhead.
With the right in-store product mix, smaller stores often mean more effective merchandising strategies. Even with a smaller footprint, the store brings the same brand recognition to the community, offers customers the convenience of buying online and picking up in-store, a return location with no shipping fees, and offers a personalized in-person shopping experience. These stores can often open in areas that otherwise wouldn’t be able to, were it not for downsizing.
retailer opens small store
DSW typically has stores of about 25,000 square feet, but in May 2022 the retailer opened a smaller 15,000-square-foot store in Houston, Texas, and saw significantly higher visits per square foot for the new concept store .
Barnes and Noble is also experimenting with smaller stores and seeing similar results. The bookstore opened 16 new stores this year and plans to open 30 more in the new year.
Earlier this year, retail giant Walmart announced they were also entering the small store business, opening a new store called General Store by Walmart.
Walmart is partnering with cabin vacation company Getaway to open these small grocery stores in select popular tourist spots across the country, starting with its first store near Austin, Texas. The new store is a true microstore, measuring only 75 square feet.
Carlos Becil, Chief Experience Officer, said: “By partnering with Walmart, we are able to expand our efforts to reach a larger audience and give our guests more free time to prepare for their stay and enjoy nature upon arrival. comfort.” or Getaway.
Target has been operating small stores for years, opening stores as small as 13,000 square feet over the past decade — a fraction of the size of a typical store of about 130,000 square feet. Their smaller store targets college students and sells age-appropriate merchandise like dorm furniture, school supplies, toiletries like everyday items, and grab-and-go groceries. Catering to the right target audience has paid off. Smaller Target stores saw higher year-over-year store traffic growth than their larger locations. This achievement is no small feat, there are already larger Target stores in the area and seeing the growth of their new smaller stores speaks volumes about the planning and execution of new store launches.
Placer’s report outlines four main points:
- Smaller stores allow for increased visitor density, which improves efficiency in areas where a larger store would not be suitable or cost prohibitive.
- Retailers can use smaller stores to cater to key demographic segments.
- Smaller stores can offer more experiential retail possibilities by focusing on specific audiences.
- Companies can take advantage of smaller stores for added convenience.
These smaller stores are relocating to residential areas or occupying smaller vacant storefronts to serve urban areas that cannot accommodate traditionally sized stores. In doing so, they are creating a niche market that provides operational efficiencies and convenience to local customers, while also generating returns for retailers.