One Store Size Doesn’t Rule Them All
Since the mid-20th century, retailers’ consumer shopping strategy was promoting the convenience of shopping at large stores, which had all they needed. Although convenience is still of primary importance to consumers, more of them want a personalized shopping experience.
Now, personalization has been extended to the size of a store and its inventory. Many major retailers are discovering small-format stores offer opportunities not to be found in superstores. Retailers can target a specific audience, locate a store in an urban area for the first time while avoiding a costly lease for a typical space and fulfill online orders and accept returns.
Target has been one of the leaders in this trend, having opened its first small-format store during 2012. Part of Target’s strategy is to locate its small stores near college campuses. Of the more than 150 small-format stores it operates, approximately 25 are within walking distance for many students. Target can stock these stores with products more likely on college students’ shopping lists, at prices that fit their budgets and where students can pick up their online orders.
According to data from Placer.ai, visits to Target’s college-campus stores during Q3 2022 increased 35.7% YOY, compared to 15.1% for all Targets in the US.
Macy’s is a newer player in the small-format store, with its first Market by Macy’s opened during 2020 and a total of eight planned by the end of 2022. Macy’s strategy is hyper-convenient shopping, a quick trip where consumers can easily find the products they want and then can be on their way. Macy’s has found Gen Xers have become a major demographic of some of its small-format stores. Like with Target, recent monthly visits at Market by Macy’s significantly exceeded its traditional stores in the same market areas.
The small-format store trend is an opportunity for media sales reps, especially those who act more as a consultant. The reach of broadcast can still help to target the narrow demographics of a small-format store when it is paired with direct mail, email marketing and social media.
