Brick-and-Mortar Retail and Its 2023 ‘Evolution’
Emerging retail formats are helping merchants boost business, malls boost traffic.
Shifts in the size, number, and type of retail stores are among the trends to watch for in 2023, according to Placer.ai.
Smaller stores. A smaller store can offer a more curated selection of items and not be as overwhelming to its shoppers – not to mention a cost-saver for the merchant when it comes to overhead.
Target has made this work with its smaller locations in college towns that stock campus and dorm essentials.
Fewer stores. Reducing the portfolio can help retailers avoid “cannibalization of visits” and increase the most out of every location.
For CVS, fewer, but strategically placed locations, support its new healthcare-focused initiatives while increasing efficiency and foot traffic allocation.
Store inside a store. The shop-in-shop retail format – where specialty brands open a branded “shop” in a larger department or big-box store – helps the bigger retailer broaden its product selection, differentiate itself from competitors, and increase engagement.
The specialty brand can reach more potential customers by leveraging the bigger retailer’s online ordering and distribution system.
The Kohl’s and Sephora shop-in-shop partnership launched in 2021 continues to demonstrate the retail format’s ability to drive foot traffic.
Digital brands add brick-and-mortar stores. For digitally native brands (DNBs), such as Allbirds, adding physical stores can help it to streamline its order fulfillment and build brand awareness for a traditional online retailer.
Like other DNB brands, Allbirds “engages visitors in a natural and un-designed space that provides a sensory encounter with Allbirds’ proprietary fabrics,” for example, according to Placer.ai blogger Ezra Carmel.
Pop-Up stores. This format provides an opportunity for brands “to create buzz and test new markets and store layouts without a long-term lease commitment,” Carmel writes.
Given the “limited-time engagements” they feature, they can be a boon to foot traffic at their mall location.
Examples include temporary art exhibits or the case of a Stranger Things pop-up store that opened to promote the new season of the hit Netflix show.