The idea of the one-stop-shop is certainly not a new concept. For many, it’s their preferred way of shopping, but over the years we’ve seen consumer habits evolve and a willingness to go to multiple stores to get exactly what they’re looking for become not just acceptable but, expected. Personal preference as a driver for our shopping trips was on par with convenience, if not trumping it in certain instances. That has all changed and consumers are looking for ways to make their trips outside the home as clean, efficient, and successful as possible; while minimizing exposure and risk.
Yes, brands like Target, Walmart, and Kroger are poised to win based on the reemergence of the one-stop-shop game. However, because these big box retailers are also seen as a significant risk for exposure, it’s important for specialty retailers/restaurants to consider ideas that could maximize service and offerings to their shoppers. We believe retailers and restaurants can evolve to help relieve shopping fatigue and reduce stress even long after stores return to normal—altering their experience and offering to become essential in the long term.
With that in mind we looked at three specific opportunities for evolution as shoppers begin to return and the new reality of retail takes shape.
New format strategies were already underway before the pandemic took hold and we believe this will become even more important as we emerge from the crisis. Smaller formats and relevant stores dedicated to serve consumers in a localized manner will become more desirable.
Target, for example, announced in early March that they’ll be opening a location roughly the size of a convenience store, clocking in at a mere 6,000 square feet. This Micro-Target is currently slated to welcome the public in 2021 and appears it won’t be the only smaller store that will be added to their fleet. Although the crisis has scaled back their aggressive growth plans, they are still planning for 15-20 new small format stores in 2021 (down from 36 originally) ranging in size from 13,000 sq. ft. to 40,000 sq. ft— exploring locations as diverse as college campuses and the Las Vegas strip.
Target’s push to develop stores to offer a small and less intimidating environment, that are easy to shop, and have a locally relevant and tailored location-based assortment is incredibly smart. It’s a leading example of what we’ve seen in recent years—that smaller formats have become a preferred way of shopping and we believe even in the new reality; this will still remain.
Moving to a smaller format doesn’t always need to be in the form of a store that has a permanent brick-and-mortar address. During the lockdown, and in light of the heightened concerns around safety and social-distancing, we’ve seen the emergence of unmanned mobile stores that are focused on essentials with extra small assortments. These mobile stores are meeting the customers where they are and capitalizing on a desire for self-service until health concerns ease to some degree.
China has proven to be the source of leading illustrations of exactly this type of thinking. Alibaba, for example, teamed up with Zhongbai and in just 5 hours, built a grocery store outside of one of Wuhan’s key hospitals to address the needs of front-line healthcare workers. In its first day alone, it had over 200 customer visits.
Unity Drive Innovation, in eastern China, have autonomous, self-driving vans that deliver fresh food to checkpoint workers during the lockdown in an effort to reduce person-to-person contact. Imagine being able to pop down to the ground floor of your residential building and buy your groceries right there without having to ever leave the property. That’s exactly what Russian grocer Vkusvill has done with their supermarket vending machines in Moscow and St. Petersburg. They’re all great examples of the type of creative thinking regarding the format of your store that the new retail landscape will require.