Experts say that the newest trend in brick-and-mortar locations is smaller stores with tech-savvy elements.
In an attempt to reinspire consumers to shop in person, giant enterprises are investing in personalized shopping experiences over traditional big box stores that lack ambiance. COVID has caused an identity crisis in the retail industry due to socially-distanced methods of buying such as curbside pickup and online shopping. As a result, retailers are looking to redefine what shopping means. And stores such as Target and Macy's are shrinking their new locations to fit the small store craze.
Large corporations see small stores as an opportunity to reach new customers more methodically. More than 96% of Target locations opened in the past year have been smaller locations, or tiny Targets, in urban areas and on college campuses. These stores are, on average, around 40,000 square feet, but some are as small as 13,000 feet – the average full-size Target is 130,000 square feet. A Target representative told CNBC that these stores are twice as productive as larger stores, and consumers tend to visit smaller stores more frequently than larger ones. Macy's is also looking into the small location trend, which attracts more foot traffic and focuses on needs such as in-store pickups or returns.
This new market movement towards smaller stores is, in some ways, about reminding consumers that an in-person shopping experience is still worthwhile. Club Monaco Chief Executive Officer Francis Pierrel says that the retail market is trending towards a boutique climate that leverages technology to provide customers with a more "magical" retail adventure. To Pierrel, the future of retail isn't just about providing a deliberate, consumer-centered encounter in a more intimate setting; it’s also about effective tech that creates streamlined checkouts or advanced inventory monitoring systems.
"It's like if you put Chanel N°5 in a plastic bottle," he said. “You've lost the magic. It's about the bottle. It's about the packaging. It's about experience."