business news in context, analysis with attitude

The New York Times reports this morning that as some consumer suffer from big-store fatigue, big box retailers are opening smaller versions of the stores that made them successful.

It isn’t just Wal-Mart with its Neighborhood Markets, though that is the most notable example. Companies like Home Depot, Staples, Toys R Us are designing units to be “smaller, cozier and more intimate, qualities the big-box format was supposed to displace.”

The same strategy is being employed by stores like Dollar General, which has thrived in the shadow of bigger, stronger competition.

In addition, according to the NYT, “being small can also give stores a toehold in cities or towns where real estate is in short supply, or where the store would not appear to have a huge natural customer base.”
KC's View:
No kidding.

The challenge for the competition to these stores is to figure out what elements these “smaller, cozier and more intimate” stores aren’t offering, and exploit them -- ruthlessly, relentlessly, and flexibly, knowing that the moving target is much harder to hit.

Big retailers may be thinking small. But smaller retailers have to think big…not in terms of real estate, but in terms of service, innovation, product selection and consumer priorities.