The new brick-and-mortar- Micro-Concept

With only 500-3,000 square feet required, the concept is dramatically smaller than a typical full-line department store.

The focus is on service

Another big driver of smaller formats being circulated by major retailers is the desire to get closer to the customer. Smaller versions of traditional format stores like Nordstrom’s new “Local concept” allow the company to open many new locations at tolerable investments.

Micro-concepts I expect to see three things happen over the next year or two.

  • First, is a new concept testing from both start-ups and traditional companies. Small enables greater customer reach. Small makes more interesting site locations possible. Small lowers break-even sales volumes. Small blends the best of online and offline.

  • Second, will be the dramatic expansion of a few powerful formats where dozens, if not hundreds, of locations can be opened.

  • Lastly, we are also likely to see some big flame-outs, particularly among the online only players that never had a viable business model in the first place.

The new brick-and-mortar "micro-concept" is designed from a customer point of view and rooted in the understanding of the relationship of online and offline. There aren’t store customers or online customers—there are just customers who are more empowered than ever to shop on their terms. Physical stores drive online and online drives stores. Ultimately, the brands that win must create a highly remarkable and relevant experience that meets the customer where they are.

“Online” brands that move into physical retail are applying this thinking as well. Brands who initially believed they could build successful enterprises without brick-and-mortar locations, have come to realize that not only do many customers prefer to shop in actual stores, but also that physical locations bring many important economic advantages.

The beauty of starting with a blank sheet of paper when it comes to designing stores is you have the ability to pick the best locations and create a highly experiential and remarkable shopping experience that leverages the best of online and offline into a more relevant and well-balanced entity.

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