| August 8-14, 2022
 We’ve seen several retailers recently announce smaller format stores, with curated inventory and an omni-channel connection. Best Buy announced a 5,000-square foot digital-first location, Abercrombie and Fitch announced a millennial and zillennial focused stores that prioritizes omni-channel shopping, Macy’s is investing in smaller locations outside of malls and Walmart announced a 75-square foot store targeting campers. While there are certainly marketing plays to these new formats, there are functional plays too, and we believe that more retailers will move toward smaller front-of-house footprints with either larger back-of-house footprints for fulfillment, or an off-site “back of house” (i.e. warehouses). This presents an opportunity for mall operators to better serve their retailers by making these new services available, and by providing on-site storage to act as micro-fulfillment hubs as new lease options. Curious how this could work for you? You know where to find us! (But in case you don’t, Twitter or LinkedIn is a good place to start.)
This week we also caught up on how shifting consumer behaviors are impacting retail disruptors, supply chain tech, and the restaurant industry. Enjoy this newsletter? Forward it to someone else you think might enjoy it and make sure they connect with us on social media.
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Digital Meets Physical
Retail disruptors are turning to layoffs to cut costs and restructure [RetailDive]
It’s not a great time to be a disruptor in retail. For new companies that hope to challenge big-name brands, a mix of high inflation and changing trends have upended many of the consumer patterns seen during the COVID-19 pandemic. E-commerce and tech retailers are in a particularly tight situation, as some consumers return to in-store shopping.
Walmart acquires merchandising technology provider [Chain Store Age]
Walmart is investing in its ability to anticipate customer demand. The discount giant is acquiring Volt Systems, a technology company that develops solutions designed to provide suppliers with enhanced on-demand visibility into merchandising resources. The Volt application delivers current store-level data, actionable analytics, and shelf intelligence for suppliers to use in planning, forecasting, and optimizing product assortment. |
Kohl’s rolls out self-service in-store pickup option ahead of the holiday shopping season [Chain Store Age]
Kohl’s shoppers picking up digital orders in-store can now skip the line at the customer service counter. The department store retailer has rolled out a self-pickup service for eligible Kohls.com orders at its more than 1,100 stores nationwide. Timed for the start of the 2022 holiday shopping season, the service, which has been in a test mode, is designed to offer a faster, more convenient in-store pickup experience for online customers.
Best Buy is testing a tiny digital-first store that opens its doors Tuesday [The Verge]
Best Buy is opening a digital-first, small-format store in Monroe, North Carolina, that takes a very different approach than most of its “big box” retail locations. The 5,000-square-foot location is only about 15 percent as big as the typical 35- to 40,000-square-foot Best Buy location and is even smaller than many smaller Apple Stores, which are typically between 6,000 to 8,500 square feet. |
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Micro & Last Mile Fulfillment
Direct-to-Consumer Sales Are Fueling Supply-Chain Tech Growth [The Wall Street Journal]
The push by consumer-goods suppliers to sell directly to consumers is giving a boost to technology companies that help untangle the complexities of retail supply chains. Footwear, apparel and electronics manufacturers are among the sectors that have been stepping up direct-to-consumer business, a trend that has accelerated during the Covid-19 pandemic as shopping at bricks-and-mortar stores crumbled and suppliers sought new paths online to reach customers. |
The Body Shop builds on same-day delivery offering [Chain Store Age]
The Body Shop is expanding on a pilot with a well-known online delivery platform. The global beauty brand is partnering with Uber Technologies Inc. to include almost all of its retail stores across the U.S. on the Uber Eats delivery platform. This expansion brings new locations to the Uber service and allows consumers in new cities in states including Illinois, Nevada, Georgia, Pennsylvania, Alaska, and Hawaii, to shop for The Body Shop products through Uber Eats. |
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Is retail now facing a warehouse crisis? [RetailWire]
Efforts to quickly add warehouses could face challenges due to shortages of steel and other construction materials, higher land costs and interest rate hikes.Retail options to avoid paying for a warehouse premium include using stores as mini-fulfillment centers, although costs and executional challenges have to be overcome. Retailers are also exploring flexible or alternative warehousing, such as using vacant stores. |
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Restaurants & Ghost Kitchens
Wendy’s to slash at least 550 units from Reef pipeline [RestaurantDive]
Wendy’s and Reef are slashing the number of restaurants they plan to open together by 2025, from an initial estimate of 700 announced last year to between 100 and 150 units. Wendy’s attributed the pipeline reduction to low unit volumes among the company’s mobile food vessels in the U.S. The planned Reef units will be concentrated primarily in the U.K. and Canada. |
Restaurant mogul Danny Meyer says inflation is ending the Great Resignation in the hospitality industry [Fortune]
As everything from food to energy gets more expensive, restaurant goers are also tipping their waiters more—making the historically high-turnover sector a bit more attractive for employees. |
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Mall Talk
Placer.ai: July was ‘far more positive’ than expected for malls [Chain Store Age]
Given all the challenges, July was a fairly good month for the nation’s shopping centers. Visits to malls (includes indoor malls, open-air lifestyle centers and outlet malls) were down year-over-year, but given inflation, gas prices, and the iffy condition of the economy, the numbers were “far more positive than expected,” according to a report by foot traffic analytics firm Placer.ai.
Abercrombie & Fitch launches ‘getaway’ store design concept [RetailDive]
Abercrombie & Fitch on Monday announced a new getaway-themed store concept. The aesthetic is a “nod to a chic hotel lobby” and prioritizes omnichannel shopping, per the release. The concept debuted at the Del Amo Fashion Center in Los Angeles and in the Il Centro Shopping Center outside of Milan. Abercrombie will open multiple getaway-concept stores this year and in 2023. |
Walmart goes tiny to reach nature-loving vacationers [RetailWire]
Walmart has partnered with Getaway, known for its quaint cabins across the U.S., to open a 75-square foot “The General Store by Walmart” store concept on wheels at select Getaway “Outposts.” Walmart’s “mini-retail experience” will stock FujiFilm cameras, Lodge Cast Iron Skillets, Pendleton Outdoor Blankets, Burt’s Bees lip balms as well as books, games, toiletries and other items for hiking and leisure activities.
Macy’s, Nordstrom, and other legacy brands are all trying to reinvent themselves. Will it work, or are department stores doomed? [katiecouric.com]
“Almost every established retailer in America that’s been around a while would say, ‘Every store I have is too damn big,’” says Jan Kniffen, a leading retail analyst and former exec at May Department Stores. The obvious reason? So many of their sales are now made online. |
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