3 x Ways brands are downsizing from flagships to small format stores

As consumers’ ever changing shopping habits shift away from traditional physical retail, we look at 3 examples of how small format stores can provide a better experience for the modern shopper.

1. IKEA – Inner City Stores   

For some time now the headlines have predicted that IKEA will experiment with inner city small format stores as the appeal of the out of town mega store wanes. And it appears the time has come - Copenhagen is earmarked for 2020.

But inner city collection-point stores and pop-up restaurants are just the start. We can already imagine IKEA showrooms on our high streets aimed at high value conversions such as kitchen and bedroom planning services. Here, the consumer doesn’t expect the immediate gratification of walking out with the product they went in for, but might make smaller secondary purchases that fit with their bigger purchase whilst they’re there.  

Many city dwellers would rather do without the car journey to and from the big box store and the challenge of getting said big boxes into their homes. We can even see IKEA stepping up its game in fulfillment of orders, perhaps with same day delivery becoming the default.  

They’re already testing sales through third party retailers, such as Amazon, so perhaps the new small format stores will be a catalyst to online sales from multiple platforms - not just ikea.com.

2. Tesla – Reinventing the Dealership  

Tesla was the first to disrupt the old edge-of-town car dealership model, cutting out the middle man to sell its vehicles directly to the consumer. They are leading by example, showing car dealerships what they need to become to meet the demands of the modern car buyer - posing many difficult questions for car brands with outdated business models.

For example, Tesla doesn’t hold inventory. Cars are made to order and the specification and customisation process is one of the joys of purchase.

Tesla therefore doesn’t need a huge forecourt to display its line-up, instead reinventing its consumer facing space to include a design studio, stripped down chassis that give an under-the-skin glimpse of their technology and digital demonstrations of how EV compares to traditional fuel in terms of cost. Educating consumers on Tesla and EV technology is the primary goal before the sales conversation can even begin.  

Tesla has taken its store, or ‘gallery’ as they call it, to where the footfall is - malls and city centres. Breaking down the barriers of initial interaction.

3. Sephora – Small Footprint, High Impact  

We always see Sephora experimenting at the edge of what is possible in retail. On one level they are known for pioneering the use of technology. Online purchase in their small format ‘flash’ stores for instance is via large touch screens. Here the store becomes a gateway to the more lucrative online portal. In both the Paris ‘flash’ concept and the Boston ‘Sephora Studio’ we see a glimpse of the future for their physical space. 

Smaller stores, in neighbourhood based convenient locations, are designed to meet the demands of the modern consumer. For example, offering personal makeover stations for those perhaps combining shopping with other activities such as a night out. Most interestingly, they are not shrunk down versions of the larger format stores - they are edited hybrids, more focused around consumers’ new shopping habits.  

These kinds of spaces mark a return to the store as a device to build stronger personal connections with an audience. This should make for a much more interesting and relevant high street.

This issue of SEEN has been compiled by LOVE’s Creative Director – 3D & Interiors, Russell Ashdown. If you’d like to say hello or ask any questions, then get in touch russellashdown@lovecreative.com.