RetailWire Discusses Our Take on Format Frenzy
Carol's latest article on emerging retail formats is featured today on RetailWire. Discussion in progress.
Some panelists see my third format category, localization, as perilous since “looking loyal or local to the community is a lot different than being a part of it.”
Retailers such as Walmart did make a lot of noise about localization (whatever happened to those stores of the community anyway?); they went as far as “looking” and stopped short of “being.” Perhaps their jump into my first format category (proliferation) via the just-accelerated Walmart Express concept is designed to accomplish proliferation and localization with one mega rollout. If so, Walmart will be satisfying its localization ambitions through location only -- it remains to be seen whether individual store assortments will vary significantly. Either way, extreme store design departures and engrossing community engagement aren't part of the current model.
As I mentioned in the article, Whole Foods is setting the standard in that regard. Immersive community involvement (prior to store openings and after stores are built) and local product sourcing are baked into Whole Foods' localization model. One panelist brought up PETCO’s Unleashed concept (“29 stores and growing” according to its website) which also builds communities around individual, small format stores.
A couple of panelists seemed to think that the whole concept of "formatitis" is overblown. To them, retailers have always “experimented” with new formats and it is an evolution rather than a revolution. One gentleman went so far as to say that, “With all of our data and analyses, we tend to label, quantify, qualify, justify, and speechify every little retail development.”
I don’t know how you can call the launch of potentially thousands of new stores in the U.S. after years of stagnant store growth a “little” development -- the numbers just don’t bear that out. Walmart alone has promised that “hundreds” of its Walmart Express stores will roll out within the next three years and J.C. Penney is planning over 300 Foundry Big & Tall stores within the next five. These and many other launches will take place in addition to each retailer’s ongoing core store openings.
Pop up stores were mentioned as a major format innovation. I left pop ups out of my article since I was focusing on the influx and impact of permanent locations; however, retailers such as Toys “R” Us have definitely raised the bar in terms of pop-up deployment (600+ stores last holiday). Pop ups have transformed from one-off marketing hype machines to market-share-grabbing surge tactics.
The same panelist predicted that, as online tax exemptions are overturned, more “local agents” will get involved with facilitating online purchases. I couldn’t agree more that that’s why we’ve made such a big deal about Sears’ and others' omni-channel moves. Having an online presence is now table stakes for any major brick and mortar retailer; soon, ties to terra firma will define e-tailer success. I predict that etailers will hook up with existing brick and mortar retailers in order to facilitate pick-up orders, more retailers will follow Athleta's lead and augment their e-tail models with physical stores, and inventory-less pick-up kiosks will crop up as yet another small format alternative.