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Shrinking: A Long-standing Experiment for Big-Box Retailers


As shoppers seek deals during the holiday season, retailers are embracing smaller store formats to attract more customers. Ikea, known for large stores, opened smaller stores in Maryland, Georgia, and North Carolina to reach more customers. Target is also opening both larger and smaller stores to cater to different markets. The trend of smaller stores started in 2011 with Walmart Express stores, and is now accelerating due to the shift to online shopping.

Retail experts suggest that smaller stores can help maximize revenue per square foot, as larger stores have areas that do not directly generate revenue. Consumers have mixed opinions on smaller stores, with some appreciating the convenience while others prefer the selection of larger stores. Department stores like Macy’s are also exploring smaller formats outside of malls to attract customers.

Data from Placer.ai shows that smaller stores can be more attractive to consumers in suburban and rural markets. Retail consultants suggest that offering a variety of formats is essential to meet consumer demands for a personalized shopping experience. Retailers like Ikea are using smaller stores to cater to different customer preferences and provide more localized delivery options.

Ultimately, the shift towards smaller store formats is a response to changing consumer behavior and the need to adapt to an increasingly digital retail environment. Retailers are using smaller stores to increase revenue, reach more customers, and offer a more personalized shopping experience.

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www.nbcnews.com

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