Times have changed: Remote work has given people fewer reasons to leave their neighborhoods, which has driven retailers to test new formats such as smaller stores or mobile-first experiences that help them accommodate the various ways shoppers prefer to engage with retailers.
- Best Buy plans to open its first small-format store, which will feature a curated product selection, access to services such as Geek Squad, and new ways to pick up purchases, including pickup lockers.
- Sleep Number recently debuted a sustainability-focused store concept that showcases its new Sleep Number Climate360 bed, per Retail TouchPoints. The store uses technology to demonstrate how its products promote healthy sleeping habits, while also providing a place where shoppers can engage with associates. The retailer plans to open 16 such locations by the end of the year and eventually use the concept across its portfolio of over 650 stores.
- Nike recently debuted a new store format, Nike Style, that blends digital and physical experiences to maximize engagement and foot traffic. For example, QR codes throughout the store allow shoppers to open augmented reality experiences. The store also features a program that allows customers to personalize Nike products.
- Macy’s is opening more smaller-format stores as it adjusts its retail footprint away from malls to accommodate changing consumer behaviors.
The big takeaway: An extremely unusual set of circumstances spurred by the pandemic has created the current tight commercial real estate environment. The situation is unlikely to continue as inflationary pressures and costs cause challenges for nearly every retailer, including giants such as Walmart and Target. As the landscape grows even more difficult, some struggling retailers will shutter their stores (and may even file for bankruptcy).
- But even amid a slowing economy, retailers need to find new ways to leverage their physical presences to build relationships with consumers. That requires experimentation because what works for one merchant may not work for another.