Modern retail is mining for growth. While the industry is seeing itself in a mixed bag of new outlets springing up, and sale going on round the clock, retailers are revisiting their current strategies.

Retail stores today have become a part of the customers shopping experience. A crucial factor influencing the customers feelings is the retail space itself. Earlier, retailers developed their own models based on their retail expansion or contraction strategies. Decisions were mainly influenced by their belief on increase in the floor space results in the increase in sales volume. Their chase for space consequently ended up in a distortion. Retailers see themselves in a Catch-22 situation. Customers prefer small stores while they demand variety merchandise, good prices, and convenience in shopping which chain stores or big malls offer.

Physical retail stores need to compete with the emergence of online and multichannel retailing. With a wake of such an onslaught, retailers are focusing more on resetting their store portfolios. They are either downsizing or right sizing. Though, it has been in practice for a long time, the strategy has picked up pace recently.

C:\Documents and Settings\megha\Desktop\untitled1.jpgBe they, big or small, right sizing a retail outlet is a major challenge for all retailers. Displaying maximum merchandise in the store, without creating a crowded look is a hard nut to crack. Retailers also need to consider the rental, and other operating costs which make the job of the manager and the visual merchandiser a tough one. Generally, apparel retail outlets display clothing in all designs, colors, and available sizes. But it would be better if the shopper sees all available choices, and then asks the retailer for a particular size. This will help the customer to make a right choice, as removing much of the clothing would free u a lot of space.

Getting the perfect to-be portfolio:

Getting the appropriate size and shape of the store portfolio needs an understanding of how an ideal retail footprint should look. This footprint tends to change frequently, in the consumer driven market. Retailers need to be flexible enough to adapt to the changes and determine how to migrate to the new environment. Considering of expanding the present retail store size is also constrained by the traditional lease structures.

Key factors in determining the store size:

*    Appropriate information about the market size, target customers, their preferences, and knowing about their shopping trends, and patterns facilitate the retailer to predict the demand for his merchandise. Along with this information, the considering the geodemography of the region, the retailer can decide about the store size and location.

*    The total number of, and the marketing strategies adopted by the competitors stores in the region of the retail outlet plays a major role in manipulating the customers behavior.

*    They need to go for a logical extension, and strategic diversification of the store.

*   An in-depth analysis and comparison of the current store setting, and the ideal to-be portfolio will provide information regarding the rightsizing strategy. Retailers need to have a clear vision of the available opportunities months prior to the setting of their store.

C:\Documents and Settings\megha\Desktop\untitled2.jpgBenefits of adopting appropriate right sizing strategies are immense. It enables much space saving which is critical in providing an enhanced shopping experience to the customer, ultimately resulting in increased sales. Flexible rightsizing can even be a cost-effective alternative to layoffs as the retailer is able to restrict his expenses by deciding on the right size of his outlet.

Reconfiguring and improving the efficiency of the retail store is a major makeover for a retail outlet. With the drastically changing business environment, retailers need to incessantly test and change the size, shape, and purpose of their outlets to make sure they are in par with the changing retail landscape. Retailers need to practice a multi-disciplinary approach to define the right strategies in coming up with the ideal size of the store. Once the strategy is appropriately defined, implementation is easy to understand and monitor.


  1. The changing face of retail, right sizing the retail estate,