business news in context, analysis with attitude

by Kevin Coupe
National Real Estate Investor has a story about how more and more retailers are investing in smaller store formats.

Examples: Walmart, which “is building 3,000-sq.-ft. convenience stores with fuel pumps—called Walmart Fuel Station—in some parking lots of existing 180,000-sq.-ft. Walmart Supercenters that don’t already have gas pumps … Walmart continues to test other small-store formats as well. It launched a convenience/grocery pick-up store concept called Walmart Pickup With Fuel in 2016. It operates two 4,000-sq.-ft. locations in Colorado and Alabama. The stores include standard convenience store items, but also drive-throughs for picking up online grocery orders.”

Also mention in the piece are Kohl’s, which has partnered with both Amazon and Aldi as it looks for a more convenient format with broader consumer appeal; Target, which “is building smaller, more streamlined urban-format stores as it continues to adapt its brick-and-mortar strategy and reach consumers that may live far from traditional, suburban Target stores … By the end of 2019, Target plans to operate more than 130 small-format locations nationally”; Nordstrom, which is testing a Nordstrom Local format that is all-service and no in-stock clothes; and even Ikea, which “is testing smaller-urban format stores.”

In pretty much every case, these small store versions have some sort of integration of the companies’ online offerings. This isn’t just trying to cram 20 pounds of flour into a 10-pound bag, but rather represent attempts to rethink approaches and appeals. That’s smart.

Beyond the desire to find ways to come at the e-commerce challenge from a different angle, these moves also represent some sort of Eye-Opening understanding that demographics are changing - companies that operated big box stores in the suburbs that catered to families with houses and minivans have to recognize that as people get married later, have fewer children, decide to live in urban areas and may not even own a car, they’ll have different needs and with patronize stores that seem relevant to their lives.
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