Threatened by online shopping, large retail stores are attempting to change their image and downsize their facilities. Sears, Macy’s, Target, Walmart, etc. are opting for smaller, focused stores with fewer product lines, fewer brands, and contained layouts.
Lower real estate costs are an obvious benefit, but the challenges of meeting customers’ existing expectations and needs for variety are daunting. Sears is experimenting with a combination of reduced product offerings on its premises and access to an expanded inventory via computer kiosks throughout the store.
This post is based on the Boston Globe article, Can the Rapidly Shrinking Store Save Legacy Retailers?, by A. Bhattarai, December 26, 2017.
1. What are the external factors that have led large retailers to downsize their brick-and-mortar stores?
Guidance: Factors include fierce online competition forcing cost reductions, changing markets (demographics, location, and preferences), and new technologies to display products within the store.
2. Many large retailers need to attract customers with a large variety of products and low costs. Are there trade-offs?
Guidance: On one hand, smaller facilities enable legacy retailers to cut costs and be more competitive; on the other, they limit the number of brands and product lines Continue reading