Retailers Are Betting on Bricks-and-Mortar
New flagships, new concepts, new stores and new partnerships from Dollar General, Lidl, Target and more.
2020 has been a tough year. The global pandemic continues to rage. Shoppers have stayed home. Ecommerce volume has skyrocketed. Famous retail names have declared bankruptcy, among them Lord & Taylor, Century 21, Brooks Brothers, GNC and Neiman Marcus.
In other words, it doesn’t seem like a good time to be expanding a brand in a bricks-and-mortar environment. However, a number of retailers are doing just that.
While the categories, plans and activities of these retailers differ significantly, they seem to have one thing in common: They’re working hard to understand exactly what they expect from their stores in terms of performance, and also to understand — and strengthen — the ways online and bricks-and-mortar operations complement each other.
Concepts and openings
Not content to stay the course, several brands have opened new flagships. UGG just opened a store at 530 Fifth Avenue in the heart of midtown Manhattan’s shopping zone. The new 12,000-square-foot space aims to reflect the changes in UGG’s products over the years, from its classic fuzzy boot to clothing, accessories and home goods.
A little further south, Swiss running shoe brand On recently opened its first owned retail property in New York’s NoHo neighborhood. The store is built around a central thematic and technological concept: a wall fitted with hundreds of depth cameras and sensors that can accurately gauge a user’s running style and scan their foot shape.
In a somewhat similar vein, Men’s Wearhouse has unveiled a new store concept that features enhanced digital and interactive technology such as hands-free fitting and measurement. The new concept debuted in Shenandoah, Texas, north of Houston.
Foot Locker is expanding its community-based “power store” concept with two new Canadian locations, one in Vancouver and one in Toronto. The three-story Vancouver location features a second-floor dedicated space for local community events, pending health and safety restrictions.
Thousands of miles to the east, specialty foods and home goods producer Stonewall Kitchen has opened a store next door to the Boston Children’s Museum. The 3,000-square-foot location features a curated assortment of the brand’s offerings along with a PB&J Café.
In October, Dollar General announced a new concept called “Popshelf,” focused on seasonal, home décor and beauty products, as well as cleaning supplies and party goods; most products are $5 or less. Plans called for the retailer to open two stores under the concept this fall in Nashville, with some 30 more in the works by the end of 2021.
Earlier this year, German discount grocer Aldi announced plans to open 70 new stores this year in the United States. Aldi did not announce where the stores would be, except to say that it has now expanded into its 37th state, Arizona.
The company is also opening stores in the Gulf Coast area, to be serviced out of a new regional distribution center, in Loxley, Ala. In the ecommerce area, the company has expanded curbside grocery pickup service to nearly 700 stores, and has grocery delivery available in 10,000 ZIP codes.
Not to be outdone, archrival Lidl, also a German discount grocer, had eight new stores opening over two weeks in December. The stores are in Georgia, Maryland, New Jersey and Pennsylvania, furthering the grocer’s expansion along the East Coast.
Future plans and partnerships
In October, Kohl’s announced a new strategic corporate framework designed to increase gross volume through a focus on active and casual wear, increased personalization of its loyalty and rewards programs, and enhanced omnichannel capabilities.
One of these is leveraging the stores as part of Kohl’s omnichannel operation. Between ship-from-store and buy online, pick up in store, nearly 40 percent of the company’s digital sales are now fulfilled by its stores.
On December 1, Kohl’s and Sephora announced a long-term strategic partnership through which 2,500-square-foot “Sephora at Kohl’s” beauty departments will be placed at the front of selected Kohl’s stores. The first 200 locations are scheduled to open in fall 2021, expanding to at least 850 stores by 2023.
A similar arrangement has been announced by Target and Ulta Beauty. “Ulta Beauty at Target,” approximately 1,000 square feet next to the existing beauty department, will debut at over 100 Target stores in 2021, with plans to scale to hundreds more over time. Both of these agreements will be reflected not only in stores, but on each partner’s website.
All of these examples suggest that the announcements of the death of bricks-and-mortar have been somewhat exaggerated. But what isn’t exaggerated is that there’s no longer any separation between the ecommerce side of a retail business and the stores. It’s all one business.