October 2023 Media Group Online, Inc. Newsletter

Prepare for a New Age of Retail

As with all business sectors, retail took a beating from the pandemic: long-term closures, inventory and labor issues and adjusting to new consumer shopping and spending habits were just a few. Generally, the recovery is complete and the retail sector is concentrated on reinventing itself for a brighter future.

Colliers’ Fall 2023 Retail Report reveals retailers are definitely looking forward as 49% expect to enlarge their stores during the next few years versus 28.5% who were planning to shrink their stores’ space. Among the six retail sectors highlighted in the report, 84.2% of grocery retailers expected to enlarge their stores while 42.1% of drug and beauty retailers were reducing store space.

Of the top two reasons, home products retailers were first at 91.7% “to increase geographic reach.” Apparel was first at 91.7% “to attract new customers.” More home product stores want “to drive online sales” at 66.7%.

Interestingly, grocery retailers want to expand more than the other sectors in the report, more of them (57.9%) said they would not be testing any new store formats. Apparel retailers at 53.6% and home-products retailers at 47.8% were the top two sectors with store-format testing in their business plans.

The Collier report also cited which new formats retailers are contemplating, with omnichannel stores first at 68.1%, followed by stores with more fulfillment space at 58.3% and stores in different locations at 52.8%.

More grocery retailers said they wanted those first two new formats but 62.5% wanted smaller stores. Mass merchants at 85.7% were wanting stores in different locations as well as 71.4% of home-products stores. These results indicate more retailers understand a physical store must provide that seamless interaction that shoppers want whether they’re shopping in-store or online.

Bob Sillick, senior researcher, report writer and content manager