Honey, I shrunk the store

Until Amazon–and a handful of other pure-play concepts–emerged as power-house brands, a retail growth strategy largely consisted of two major components: build bigger stores and create a bigger retail footprint.

Whether you were Walmart, Office Depot, Coach or Lowe’s, your strategy was mostly about pushing the limits of market dominance: expanding your assortments to cover every related purchase occasion and expanding locations to cover every trade area perceived to be viable.

Then digital happened, and if a large part of your product offering could be delivered without the need of a physical location (think Best Buy, Blockbuster or Borders–and that’s just the “B’s”) this has proved to be a big problem indeed.

And show-rooming happened, and if you were in categories where the consumer likes the research service found in a brick and mortar location, but ultimately buys on price, you were losing a lot of business to direct-to-consumer players not burdened by your overhead structure.

Then there’s the emergence of omni-channel retailing, and if you aren’t making it frictionless for your customer to shop anytime, anywhere, anyway, you were losing share to those who have truly embraced customer-centric retailing.

Last, but not least, the recession happened, and many of the consumers you were counting on–you know, the ones that had become weapons of massive consumption fueled by easy credit–suddenly pulled back big time, and many of the locations you opened in the last five years or so are dead in the water.

So for most, it’s time to shrink.

Fewer, more productive stores. New, smaller formats that resonate more strongly with today’s blended channel realities and that can work in different kinds of trade areas.

But if you think getting smaller is just about physical space, think again.

When you think smaller, think more intimate. Become more personalized, more intensely relevant. Treat different customers differently.

In the future the customer shouldn’t walk away from interacting with your brand thinking that you have down-sized. They should feel that you know them, you get them and that your brand was built with them at the center of all that you do.

6 thoughts on “Honey, I shrunk the store

  1. Hi

    Like this! Have you written anything on ways you feel most effective to personalise the customer relationship? http://www.lilygardner.com. We have one retail outlet and wholesale and website ( about to be pulled apart and restructured to do just what you are talking about). Any ideas or articles would be very interesting. Thank you.Lily Gardner

  2. Dennis – this is so true. I think so many of the big stores where consumers “showroom” could eliminate the showroom if they made the experience better. For instance, one of the big box CE retailers we all know could re-train their salespeople, focus on customer care, encourage folks to shop prices on their phones and then offer us some price matching and sell us reasonable accessories/delivery/etc. and make money on service. One of the reasons I quit shopping there was becuase they always wanted to sell me a $69 HDMI cable. I’m smart enough to know that an expensive cable i short links doesn’t beat a cheap cable. When they try to sell me an expensive cable, I don’t trust them anymore. Lose my trust and you lose my business.

  3. Pingback: In Retail…Bigger Isn’t Always Better « Buxton Analytics – Using Customer Analytics in Real World Strategies

  4. Pingback: Becoming Intensely Relevant | MINDING SHOP

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