Is brick and mortar retail really dying? Perhaps it is simply evolving in the age of Millennial shopping. Trends in the retail sector show that major players are looking toward a future where in-store and online shopping coexist peacefully. But the days of the big box store and the giant shopping mall may indeed be numbered.
Big Box Becomes Small Box
According to a recent Washington Post article, smaller format stores are projected to grow almost 4% annually from now through 2022. That’s more than four times as fast as projected sales growth for the big box sector. In response to changes in how consumers shop, formerly spacious retailers like Sears are downsizing their mall presence as well. One location in Virginia did away with its second floor altogether—focusing the remaining space on appliances and mattresses (two big-ticket items consumers still like to see in person to gauge quality).
Target is moving away from its superstore push and intends to focus on building out small format stores. By the end of 2019, there should be more than 130 of these diminutive retail locations across the U.S. In reporting from Footwear News, “(Target) continues to put investments behind making its stores operate as online fulfillment centers, cutting out shipping costs and providing shoppers with incentives to visit physical locations and make incremental purchases.”
The Birth of the Concept Store
Companies that formerly operated solely online are also beginning to make their presence felt in the “real world”—with the help of experienced retailers. For example, Jet.com (owned by Wal-Mart), recently purchased ModCloth. The company’s first permanent “showroom” opened in Texas earlier this year.
What is a showroom store? According to RetailDive, unlike a traditional retail location, a concept store or showroom isn’t designed to move a lot of merchandise from the floor. In fact, shoppers are expected to leave empty handed much of the time. The showroom provides a setting for consumers to feel and test out merchandise and ask experienced sales staff questions as part of their decision-making process. It’s understood that customers will then complete their purchase online (often before leaving the store) and simply have the items delivered at home. Customers can still have the option to handle returns and exchanges in store if desired. In fact, this trend is all about giving consumers more choices in how they engage with retailers.
Advantages of the Showroom Trend
From the standpoint of being cost-effective and responsive, small concept stores make a lot of sense.
- They allow retailers to open low-cost locations in high-cost urban areas within easy travel distance of consumers.
- Locations can have much smaller square footage since less merchandise is kept on site for restocking.
- Companies that want to maintain brand awareness can ensure a physical presence to stay “top of mind” for shoppers.
- By accepting the reality that consumers will complete transactions online, retailers can focus on improving the total shopping experience to drive loyalty.
Fast, Low Cost Construction Fits the Trend
As retailers continue to adapt rapidly to emerging trends, they need a way to build out physical stores on demand. Prefabricated steel fits the bill perfectly by lowering the total cost of materials and increasing the speed of construction. And, since metal buildings can easily be reconfigured, they can change with the times. To explore Peak Steel’s retail projects, visit our gallery.