Large retailers turn to specialized stores

The retail landscape continues to evolve: big retailers are simultaneously expanding and contracting, and malls are examining their place among consumers. 

Somewhat paradoxically, customers seem to be gravitating toward smaller, more curated experiences from well known and respected names.

Operational shifts and expansion like this requires flexibility and a broad network from a point of sale software system.

Retail Pro is an ideal partner for such moves, with Retail Pro Prism‘s flexibility and partners spanning the US as well as across the world through its extensive partner network.

While a significant, and growing, number of sales are made online, brick-and-mortar shopping continues to appeal to shoppers, especially those who have immediate needs, or want to inspect a product before buying.

If high-end retailers can accurately predict what their targer customers want in-store, trending data seems to indicate that’s a recipe for bottomline success.

One big question facing these large, established brand is, how can they attract shoppers who seemingly have adopted a more cautious attitude toward discretionary purchase?

análisis retailers

Specialized format stores have a greater impact on large retailers 

Some retailers, such as US department store chain Macy’s and electronics retailer Best Buy, are considering building smaller stores with strong integration between online and offline channels.

Retail Pro Prism is a great omnichannel retail POS software because it connects all your data for insights and operations that help you create better retail experiences.

These strategies help marketers better target specific customer or demographic needs.

They can offer a careful selection of products tailored to the local market, which can attract customers looking for a more personalized shopping experience.

Such strategies are easier said than done, especially for a large retail chain with a flagship store in New York’s Harold Square that boasts more than 92,000 square meters of retail space.

Macy’s CEO said during a recent earnings call that the department store will focus on creating “better stores, not more stores”.

In fact, while Macy’s has announced that it will close 150 underperforming stores over the next three years, it has also announced that it will invest more in its small-format retail brands, Market by Macy’s and Bloomie’s. The company reportedly plans to add 30 nonmall stores by the end of 2025.

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Evolution of shopping centers and their traditional retailers

Macy’s is joining the trend of other major retailers with affluent clientele leaving the confines of traditional malls and suburban shopping centers, where they have long been coveted as “anchors.

Many major U.S. retailers, from Nieman Marcus to Sears, have faced severe economic difficulties and have abandoned shopping centers, forcing property managers to reevaluate the need to attract other businesses to fill the vacant spaces in their retail locations.

As a result, many malls are experiencing a renaissance by adding new retail options such as bowling alleys, miniature golf, fitness centers and even apartments.

This type of planning benefits merchants who remain in the malls by increasing foot traffic within the downtown arcades. 

Best Buy is also testing a “special selection” of products, services, Geek Squad and in-store shopping features with home delivery.

Best Buy tested this concept in late 2022 with a 464-square-meters store in Charlotte, North Carolina. 

Nordstrom, a U.S. luxury department store chain, has successfully implemented a strategy to create a more personalized and curated customer experience outside of the mall through its Nordstrom Local brand.

One of the main reasons for the popularity of these rooms is convenience.

Customers can easily return and pick up their orders online.

In addition, customers tend to buy more when they are physically in the store.

According to Nordstrom research, the average Local brand customer spends 2.5 times more than a regular Nordstrom customer.

Changing the nature of a retailer’s physical presence is easier when it uses flexible retail point-of-sale software, especially on the back end.

Retail Pro Prism’s architecture allows for the independent and simple management of new store openings around the world, as well as simplifying any other set of issues that arise from this type of change in operations.

Nordstrom’s in-depth customer analysis allows it to offer specific services that it knows its customers value.

Services offered at Nordstrom Local stores include professional stylists, online order pickup and return, alterations, gift wrapping, dry cleaning and complimentary refreshments. 

These advantages illustrate the importance of knowing your customers to attract and retain them, in addition to the store merchandise itself.

To succeed in this new paradigm, it is critical to continue to exceed customer expectations in both product inventory and experience.

That’s a lot to ask of a small company. To respond successfully, you need to know and understand your customers’ needs and be able to meet not only today’s, but also tomorrow’s business requirements.

 

Retail Pro Prism gives your business the flexibility you need across multiple locations, centralizing information and giving you total control over all your operations. For more information, contact our team of experts who can help you throughout your omnichannel journey.