Will eCommerce Bring Small Retail Full Circle?

Civic-minded locals from Anytown USA might rail against the incursion of malls 50 years ago. They’d see chain stores and big retailers outpricing the Main Street shops their friends ran. With eCommerce now threatening the mall, will we see a return of small retail?

Trends suggest an opportunity for retail to win by going small. And this is not without a touch of irony.

First, big retail saw an end to many small stores that could not compete on price and selection. Then, eCommerce came along to pressure big retail and malls on price, convenience, and fulfillment.

Small Retail as Out-of-the-Big-Box Thinking

Customers express a devotion to small and local shops.

Shoppers continually look for unique products and experiences. And they want to shop small retail in order to support the local economy.

According to a Deloitte Consulting survey, more than 70% of consumers said they looked for new stores or online retailers during the 2016 holiday season. And 66% of those shoppers expressed a preference for local stores.

As if retail conformed to the “nature abhors a vacuum” truism, we read reports of small retailers filling gaps left by downsizing chains. Mall operators, in turn, have reconfigured their spaces to accommodate small retail and pop-up stores.

And at least one large retailer, Target, will test the benefits of small retail later this year. The small-format store will be located near Macy’s famous historic flagship branch in the center of New York City.

Granted, a 43,000-sq. -ft brand-name shop in a high-visibility, high-traffic zone will never be confused with the mom-and-pop shop. But, for a big chain like Target, it recognizes the perils of going big in the age of Amazon. Too much retail space comes down to too much inventory and too much overhead.

Big may have been better for retail ages gone by. But, the ongoing reshuffle of brick-and-mortar and the devotion of consumers to small retail means physical retail will maintain its place in the overall ecosystem. This means companies with a retail channel strategy can still find the opportunity to showcase products, provide unique customer experience, and grow increase their profitsr.