As Omni-channel Gets Bigger, Store Sizes Get Smaller
By Hannah Ash, contributing writer
Big Boxes Expand Online Channels And Reduce Store Footprints
While omni-channel retailing has changed the way shoppers find, buy, and receive the products they want, it is also changing the very foundation of big box stores. Evidence of these fundamental changes can be found in the recent trend of big stores getting smaller (at least in terms of physical space they occupy). In the coming year, the world’s leading retailer Walmart plans to open twice as many small-concept stores as it will supercenters. Target, meanwhile, is experimenting with mid-sized and smaller stores as well.
As online shopping and same-day pick up initiatives reduce the need for showroom square footage, the big-box stores are not looking quite so big anymore. Walmart announced it will accelerate its growth plans for smaller-format stores and is looking to open between 270 to 350 new smaller-sized Neighborhood Markets (a grocery model) and Walmart Express (a convenience model). Target, which began opening the mid-sized City Target in more urban areas, has unveiled plans to open stores that are 15 percent the size of the traditional Target size. The first Target Express will open in July of this year and the retailer will plan its expansion of these smaller footprint stores based upon how the initial outlets perform. Staples, which does 50 percent of its sales online, announced last month that it would be closing up to 225 stores over the next two years while streamlining the products offered by its brick and mortar arm.
Centralized inventory, same-day pick up, same-day delivery, mobile purchasing, and reduced foot traffic to malls (as a result of online shopping) are ways in which omni-channel is changing the size of the American storefront. As Walmart U.S. President and CEO Bill Simon states, “our small store expansion...will help us usher in the next generation of retail. This will combine thousands of points of physical access with digital retail experiences that include initiatives such as Site to Store and Pay with Cash.” As digital and omni-channel retail expands, the brick and mortar store is likely to continue to shrink (in size).