Big names in retail have been struggling with traditional formats. Too much space can be an economic drag on a location, making the attainment of profitability a challenge. Rethinking the format of stores into smaller locations can reduce expenses while concentrating sales more efficiently.

Moody's Analytics CRE looked at some examples. Macy's announced a new strategy called "Bold New Chapter" after a 5.5% fall in annual sales. The company will close 30% of its "unproductive" stores by 2026.

"As part of the plan, Macy's will open at least 30 Bluemercury stores, the company's smaller footprint luxury beauty retailer, as well as roughly 15 Bloomingdale's, a luxury retail brand that also operates in smaller stores than typical Macy's locations," they wrote. "Macy's strategy entails not only a pivot from its middle-class target customers to its luxury brand and higher income demographics, but it's also a downscale from a massive department store format to something that can fit into a community or even neighborhood center."