We’ve said goodbye to generic-driven big box stores, but what’s the way forward for retail?
The retail sector has been put to the test for years now as e-commerce and other new developments sparked a lasting disruption of shopping culture. All the while, everyone is wondering what the 5, 10, and even 20-year retail outlook will look like.
Since last year, NAI Global has been tracking the direction of retail. Small scale retail movements have been emerging as a winning trend in bricks and mortar shopping. Small footprint retail offers brands the benefits of increased productivity and business optimisation.
Here’s how this emerging trend offers a way forward:
1. Digital Integration
One of the largest motivators to downsize was to make room for the emergence of online shopping.
As more people opted for one-click purchases versus the traditional physical store visit, global brands decided to reduce their number of storefronts and invest in their digital presence. On the other end, fully online brands seeking to dip their toes into the brick and mortar arena are choosing to go small.
As a result, retail has been busy establishing robust digital infrastructures for their brands. With stores present in both the digital and physical worlds, smaller footprint outlets provide an experientially-rooted edge that motivates shoppers to visit.
2. Socially Distant Shopping
The recent pandemic has created new benefits for small format shopping. Whether it’s a small business or pop-up shop, smaller physical spaces make it easier to reduce occupancy rates to accommodate social distancing protocols.
Small footprints offer contemporary shoppers the opportunity to freely engage with the store with very few other shoppers in the space. Smaller stores are also easier to clean and sanitise, which is top of mind for post-Covid-19 consumers.
Looking ahead, a smaller establishment is likely to be better suited to making shoppers feel comfortable and less at risk.
3. Profiting From Experiences
Many retailers decided to shrink their store footprints in an effort to hone their specialty experiences.
Fewer locations make every storefront exponentially more valuable. It becomes a destination, not just an errand stop. Smaller retailers can invest more in each store instead of spreading their spend across many locations.
This elevates the brand’s legacy and provides a more engaging shopping experience – all of which put retailers in favour with today’s consumers.
4. Click and Collect Capabilities
Another flow on effect of the global pandemic was a substantial resurgence in the Click and Collect model. Buying online and picking up in-store offered a strong solution that enabled nearly-instant gratification and offset the need to enter crowded stores.
Small footprint stores powered by a strong network of e-commerce support can further capitalise on the Click and Collect strategy by using their stores as packaging and pick-up stations. Small stores can fulfill the role of mini-warehouses in the case of potential market closures or lockdown orders – factors that suddenly became a major concern for brick and mortar businesses.
As we consider what the future may hold, small scale retailers are proving to be more resilient than multi -location mega brands.