30 Aug, 2017

Why Are Small-Box Retail Stores On The Rise?


Who said bigger was better?

Apparently not some brick and mortar stores, who are transforming their usual big box stores to become smaller.

Small-box stores have many benefits, like convenience, and the ability to customize merchandise, depending on the store’s customer geographic.

“Small retailers often offer valued-added services, customized product solutions and other customer-centered business activities that big-box stores don’t consistently offer.” Chron reports. 

Both retail giants Sephora and Target have adopted this trend into their business strategies. Let’s take a look.

Target Goes Smaller

Target has gained its popularity for its large space of 135,000 square feet, offering products such as clothing, grocery, and even technology. These stores have been around for 50 years, and continue to dominate the retail industry.

Now, Target is aiming to open up small format stores, ranging from 17,000 to 50,000 square feet, in areas like college campuses, urban centers, and suburban areas, in hopes to attract a younger demographic.

Target CEO Brian Cornell is aiming to open 30 more by the end of this year. This is part of a $7 billion investment that will ultimately reinvent Target’s store strategy.

These stores will offer personalized experiences for each location. One store has already been launched on the University of Minnesota’s campus in 2014, and 9 followed after.

The goal of these smaller stores is to offer targeted products to meet the needs of the customer demographic. For example, college students are usually on the go and constantly budgeting.

“Perhaps one of the greatest feats for any retailer is to gain a comprehensive understanding of how each store can best serve its customers — and that means adjusting the assortment and services to fit regional and demographic needs.” Retaildive reports. 

Opening a store that adjusts its merchandise to meet these needs is crucial for gaining, and maintaining, popularity among millennials and gen z customers.

Target is pinpointing trends among millennial shoppers by analyzing purchase data and customer feedback. This gives insight into what key categories should be prioritized in the store.

Convenience is also a huge factor that plays a role in Target’s smaller stores. Because of its size, Target can offer a convenient grab and go concept to its shoppers.

“These customers don’t need the full breadth of assortment on physical shelves in front of them. Younger consumers like stores, they just need them to be more convenient. As Welker explains, the new Target stores are all about “putting the guest first in design.”  Retaildive reports.

Integrating a grab and go approach in stores, as well as an in-store pick up, creates an omnichannel experience for shoppers, which has been proven to be successful, especially with younger shoppers.

Sephora Downsizes To Upgrade Technology

Sephora is a cosmetic empire that offers over 300 brands, and a personal label to its customer base. It has gained a positive reputation among shoppers who seek makeup, fragrance, cosmetics, skincare, haircare and even nail color products

This retail giant has made a huge impact in the industry, opening nearly 706 stores across the United States alone.

“Along with Ulta, Sephora has disrupted the beauty counter — a department store mainstay — with a more streamlined presentation of beauty products, self-service sampling and helpful staff. Sephora is becoming a pretty extensive case study for how to introduce new technology online, on mobile and in stores” Retaildive reports.

This summer, Sephora announced that a small format store will hit the streets of Boston, on Newbury Street. “Sephora Studio” will be only 2,000 square feet, much like its boutique stores that are featured in 300 J.C. Penney’s nationwide.

The difference between these two small stores is that Sephora Studio will stand alone, and offer up to date technology that creates an omnichannel experience for shoppers.

Sephora Studio will offer digital tools like order in store and same day pickup. This store will also provide customers with touchscreens that will help customers customize makeup, along with beauty consulting services.

Sephora hopes to create personalized experiences with the always changing customer, by providing a customized approach to beauty.

Both retail giants are moving toward an omnichannel experience to offer customers top notch experiences. So, how can you provide your customers with an omnichannel experience? Find out at Digital Retail Transformation Assembly.


North America’s most prominent digital, marketing, technology, and business leaders from the Retail Industry are coming together October 19-20, 2017 at the Grand America Hotel in Salt Lake City, UT, for the Digital Retail Transformation Assembly.

Our agendas and attendee lists are for events attendees only. Apply to attend here!


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