Size Isn't Everything

October 31, 2010  by in UnCategorized   

By Home Furnishings Business in on November 1, 2010

Smaller furniture stores can serve as satellites to augment the furniture retailer€™s main store (with a broader inventory) and use technology to show expanded choices.

Retailers are increasingly finding that size isn€™t everything. The trend toward smaller stores is a natural outgrowth of consumer-centric retailing€”a philosophy focused on targeting specific consumer groups and refining your store to reflect their needs and wants.

To cite one mega-sized example, Walmart, the world€™s largest retailer, is scaling down stores€”the largest of which now cover as much as three football fields.

Target, The Gap (and Old Navy) and Ashley Furniture are also finding that stores focused on their best customers can be more productive than locations that try to appeal to many disparate groups€”by providing enormous selection. All three of those chains have announced new formats that favor shopper convenience and trim the wide selection that consumers tell us can be more confusing than helpful.

Large-format retailers are finally listening to all the busy moms who begin each shopping trip by unbuckling a child from a car seat, unfurling a stroller and packing it with the diaper bag, toys and other items her child needs for any store visit lasting more than a few minutes.

So, at a time when tiny Minis have replaced massive Hummers as the coolest car of the day, Target has cut store sizes to as little as 60,000 square feet (from what€™s typically 128,000 square feet) as it focuses growth on more urban locations. The Gap, responding to a 40 percent drop in sales per square foot from 1999 to 2009, has found it can trim store sizes from 18,000 square feet to 8,000 square feet and remain almost as productive, according to published reports.

In our industry, Ashley has been even more aggressive with its smaller-is-better strategy with its announced plans to franchise a new format with stores of about 5,000 square feet, a fraction the size of its fast-growing Ashley HomeStores. Also, Ethan Allen€™s newest store in Kentucky is about 6,000 square feet, significantly slimmed down from its 30,000-square-foot space in Manhattan.

My firm currently has several smaller-sized locations in development. One we recently finished also argues in favor of the smaller-is-better approach. When originally built in 2006, the Dwellings store in St. Michael, Barbados, was a concise 6,500 square feet€”offering everything from furniture to tabletop goods and kitchenware. This year, it was more than doubled to 15,000 square feet by expanding showroom space to the second floor, where owners Luis Carrillo and Gael Alluard added a customer resource center for custom orders and a bed-and-bath section.

A fraction of the size of many of the full-line furniture stores here in the U.S., Dwellings is open, inviting and easy to shop. It has made good use of technology by installing large-screen displays in its customer resource center that can be used to show additional items in a collection the customer likes, but the store doesn€™t have space to stock all the time. With high-resolution images, Dwellings€™ shoppers can have confidence about the decisions they make when ordering add-on items or customized goods, including upholstery or case goods offered in a variety of finishes.

Another aspect of Dwellings is that its designers are focused on serving clients with in-home visits. Many of the store€™s high-end customers in the resort community have new seasonal condos or year-round homes, and they need to furnish several rooms or the whole space. In short, in-home consultations are the best way to serve these customers, and Dwellings€™ designers are well-equipped to draw on the resource center€™s tools on an in-home visit by connecting to store servers (and vendors) via the Internet.

Also, with Dwellings€™ carefully chosen selection of cash-and-carry tabletop items and home goods, shoppers return frequently to purchase gifts or an item like a bedspread that caught their eye on an earlier visit.

In the next few years, as chains like Target and The Gap focus on smaller stores, it€™s likely that some furniture chains will also be favoring scaled-down locations in high-traffic (high-rent) shopping centers. In some cases, those smaller furniture stores can serve as satellites to augment the furniture retailer€™s main store (with a broader inventory) and use technology to show expanded choices and make in-home consultations more compelling.

As those trends develop, you€™ll also see more furniture retailers follow the lead of furniture chains that have already taken steps to make large stores seem smaller. For example, one trend is to create a separate mattress shop entrance and a store-within-a-store for shoppers who want the best selection, but don€™t want to negotiate through 60,000 square feet of furniture to find the mattress department. New, separately branded entrances work with all sorts of categories, including sofas and office/home office furniture. HFB